Broker-Carrier Connectivity

Kimberly Harris-Ferrante of IT research firm Gartner, speaking at the Insurance-Canada.ca Technology Conference in Toronto, February 28, 2011.

The 2011 Insurance-Canada.ca Technology Conference focused on how brokers and insurers must work together using modern technology, social media and business intelligence. The event was held on February 28, 2011, at the Sheraton Centre Toronto Hotel.

The morning kicked off with a leadership panel. Senior executives discussed major technology drivers and what the insurance industry needs to do to stay competitive.

Jack Ott, senior vice president and CIO at Intact Insurance Financial Corporation stated that the industry as a whole has done well with the business of insurance and developing great products and technologies.

However, now it is up to the key players to implement technology in business.

Rick Orr, president-elect for the Insurance Brokers Association of Ontario (IBAO) agreed with this statement and elaborated that there seem to be two islands inhabited by the insurers and brokers. He said there needs to be a better connection between the two, otherwise the systems that are being created (for example, broker management systems) are wasted.

“Without the brokers out there selling insurance, there isn’t a lot of point having any of the systems out there,” he added. “You need to be selling insurance in order to sustain the industry. So we need to better connect the two islands and build the bridge.”

Orr also pointed to the importance of technology in making market decisions.

“When a broker sits down and makes strategic decisions on what markets they’re going to deal with as they move forward, then certainly if they’re having to handwrite paper applications for one versus uploading directly to another [it makes a difference].”

The morning session, “Enhancing Customer Communications With Analytics: Study,” touched on many of the same issues–brokers and insurers need to look at how to collaborate more effectively, and use technology to benefit customers.

An IBM-sponsored study revealed that both insurers and brokers feel that through data and analytics, they share market information but not customer information.

“The key to the future is looking at how to make data and analytics more efficient,” said Mark Breading of SMA Strategy Meets Action. “Insurers and brokers must share data and work together.”

Breading stated that based on the study, it was time for a call to action for both parties. “Insurers must improve data and analytics and provide more customer service insights to brokers. Brokers must capitalize more on the wealth of customer data they process. The bottom line is a stronger partnership is needed.”

Making Technology Work For You
Another morning session, “Technologies That Make a Difference in Insurance,” focused on how web 2.0, mobile devices, social media and business intelligence can help improve business.

“In order to be successful, it’s critical that they’re all driven based on business need,” said Christina Colby, vice president and global business intelligence leader for insurance at Capgemini. “If this is just technology for technology’s sake, it will never work.”

For example, the majority of insurers state that 60% of inquiries to claims call centres are simply clients checking on the status of a claim, she said. Insurers should evaluate how to use web 2.0 to move claims to lowercost channels, such as creating automated systems, or getting clients to go online. This takes the focus off claims handlers and empowers customers at the same time, she said.

“It’s really about developing a commensurate value exchange; where all of the parties involved in an interaction are getting the full value out of that interaction,” she said.

Colby added the P&C industry needs to cut through the hype and noise of social media, and instead put it to action.

For example, many people are posting comments about their travel experiences on tripadvisor.com. Those that are getting ready to plan a trip are checking the website for advice, such as which hotels are the most comfortable.

“Pretty soon, people are going to make that leap for their financial services products,” she said.

In an afternoon session, “Software Selection: A Best Practice Approach,” Bill Garvey, principal at Eastern Shore Consulting, said that an insurer’s search for new software is similar to the search for new staff. Make sure to ask yourself why you are searching for operational software and what you want to accomplish, he advised.

Other tips when navigating through the surplus of software vendors include using the term RFP (request for proposal) and not RFI (request for information) because it carries more weight, looking at as many vendors as possible, and using consistent decision-making criteria at each step of the process to eliminate bias.

“If you buy a software application, you’re going to be married to this company,” said Garvey. “As important as the technology and the functionality is, a business decision criteria should be, ‘Do I want to do business with these people?'”

Garvey also advised giving vendors no more than two weeks to come back with a demo of their product based on your requirements. If they don’t come back to you with more questions in that timeframe, then it could spell trouble because they may not understand your requirements, he said.

The Conference wrapped with a keynote presentation by Kimberly Harris-Ferrante of Gartner, who once again confirmed that insurers must build stronger relationships with brokers in order to improve transaction capabilities.

“[Insurers] have to love the broker,” she said. “Know what’s important to them to keep your relationship. Know their value for new performance metrics and segmentation, and focus beyond just straight-through processing.”

In order to succeed in a changing industry, both parties must get to know their target customer’s lifestyle (e.g. they use handheld devices), instead of simply focusing on demographics (e.g. gender and age), she said.

“You have to ensure your customer channels are in line with the [changing customer] expectations. That means new devices and new touch points in personal lines communications,” Harris-Ferrante stated.

Additionally, the industry must focus on operational efficiency and organizational effectiveness, including Business Process Management (BPM) that can reduce manual work and costs, and improve employee productivity and data quality, stated Harris-Ferrante.

A recent Gartner Canada Survey asked 42 insurance brokers and 53 insurance companies, “How are BPM solutions currently being used in your organization today to support core business processes?”

The top response for insurers was to automate manual tasks (49%), and for brokers was to help with workload management for employees by providing more information at their fingertips (48%).

“This gives you a highlight that BPM is not a one size fits all,” said Harris-Ferrante. “There’s a lot of things you can do with BPM from empowering the knowledge worker to automation, so you need to be embracing all that BPM can offer you.”

And, in order to deal with the influx of information that comes with using technology, insurers and brokers must leverage data management and business intelligence (BI), said Harris-Ferrante.

According to the Gartner Canada Survey, 40% of insurers are investing in BI tools, and 10% of brokers are investing in BI tools.

To see a gallery of photos from the Conference, click here.

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Copyright 2011 Rogers Publishing Ltd. This article first appeared in the March 2011 edition of Canadian Insurance Top Broker magazine.

This story was originally published by Canadian Insurance Top Broker.