March 21, 2013 by Stefan Dubowski
Now real-time policy change is here. Last April, insurance-technology provider Brovada Technologies Inc. claimed to be the first to unveil a system affording real-time policy change. And last October, BMS provider Keal Technology, middleware software provider iter8 Inc., and tech-savvy carrier Unica Insurance announced a real-time policy change solution.
According to the technology’s providers and early users, the solution paves the way for improved back-office workflows, lower operating costs and better customer service.
Ultimately, people implementing real-time policy change expect it will improve brokers’ chances of winning customers away from the directs.
“That’s a big hill for brokers to climb,” says Katherine Evans, vice-president and CFO at Unica.
Two carriers—SGI and Grenville Mutual Insurance Co.—use Brovada’s technology to enable real-time policy change for brokers. Other insurers have also signed on to use the solution, although Karl Greenlaw, Brovada’s CEO, isn’t naming names at this point.
He explains that Brovada’s NexExchange “once and done” portal, which brokers access through Brovada’s NexCenter integration software (or through other CSIO standards-based software), enables multiple policy changes at once, so brokers waste little time on data entry. The Brovada solution also integrates with most BMSes, so the vast majority of brokers using BMSes can access real-time policy change.
“We’re getting transaction times as low as 10 seconds now,” Greenlaw says. “There’s not only time saved, but also protection from possible errors and omissions issues.”
The Keal-iter8-Unica solution is accessed through Keal’s sigXP BMS. Personal-lines policy changes entered into the BMS are sent to the carrier’s policy administration system immediately, explains Patrick Durepos, Keal’s president.
(How timely is “real time?” See “Quantifying Real Time” sidebar.)
Unica is the first carrier to offer the Keal-iter8 solution. Brokers working with Unica can enact practically any sort of policy change, including policyholder information, vehicle details and property details.
Normally, brokers have to enter policy-change information twice: once in the BMS for their own records and once in the carrier’s portal to authorize the amendment. Whereas brokers typically wait a day or two for confirmation from the carrier that the change had been finalized, real-time policy change updates records instantly, so brokers can verify the information quickly and tell policyholders that the changes are in effect, subject to underwriter review as needed.
Vin Mac, vice-president of Acumen Insurance Group in Hamilton, Ont., explains that once his company starts using real-time policy change—as it plans to do—the brokerage expects to reduce the amount of time that staff members have to enter customer data into the BMS and the carrier’s portal. Acumen currently employs technical service representatives (TSRs) who support customer service representatives (CSRs): the CSRs hand the work of inputting changes into carrier portals to the TSRs, so the CSRs can focus on serving customers. When Acumen is up and running with real-time policy change, client-facing CSRs won’t need the TSRs for portal input. The CSRs will be able to take the details they obtain from clients and input changes into the BMS; the amendments will be updated on the carrier’s back-end infrastructure instantly.
Now that CSRs no longer need the TSRs to complete policy changes, does that mean the TSRs may lose their jobs? Not necessarily. “I still need them for other tasks,” Mac says. He notes that Acumen will fill its two full-time and one part-time TSRs’ time with tasks such as invoicing and following up on eDocs renewals.
Bigger brokerages, however, might find it’s time to reduce the TSR count. “Will they still need six TSRs? They may need two or three only,” Mac estimates.
Sean Graham, principal at online brokerage KTX Insurance Brokers Ltd. in Toronto, expects faster turnaround times and enhanced accuracy from real-time policy change. For one thing, it will mean no longer having to input information in two places—a notorious source of errors and delays.
What’s more, real-time policy change gives brokers the correct information, faster. For instance, “immediately we’ll know the price and we’ll be able to give the client information over the phone about future payments,” Graham says. “In the past, we would use a rating system to give the client an approximate number.”
This speed of information will work particularly well when paired with the electronic document delivery system eDocs, whereby electronic documents are downloaded directly into the BMS.
“These real-time endorsements, when coupled with eDocs, get us on the path towards both real-time service and a paperless brokerage,” Graham says.
Attacking the Directs
By reducing the number of steps and dramatically reducing turnaround time, real-time policy change helps give brokers and carriers a fighting chance against direct-to-customer providers. Directs have an advantage in that their customer-service systems and back-end servers are all parts of one platform. In effect, real-time policy change is already a reality for them.
“They have more standardization,” Evans says. Standardization means efficiency.
“Anything brokers can do to speed the process time helps reduce their costs and focus their CSRs on generating more revenue,” notes Greenlaw from Brovada.
But levelling the playing field depends on numerous carriers offering real-time policy change. Evans does not see that as a major problem. She points out that once one carrier begins offering a new feature, others usually follow suit, worried that if they don’t, they might lose brokers—and customers.
The year 2012 may well mark the tipping point for real-time policy change, but this isn’t the first time the solution has come to the market. For instance, Durepos says Keal worked with AXA Canada Inc. on similar functionality for commercial lines. After Intact Financial Corp. acquired AXA in 2011, however, Intact transitioned AXA onto the Intact commercial lines system. Real-time functionality through the BMS no longer applied.
If real-time policy change were applied to commercial, it would speak to auto and package policies particularly, where standardization simplifies development. “You have a standard form to work with,” Durepos says. “And auto is highly regulated, so policies are similar from insurer to insurer.”
Greenlaw says real-time policy change technology would work fine for commercial, but its usefulness depends on convincing brokers to employ their BMSes more thoroughly. In many cases, he explains, brokers keep customer data somewhere other than in the BMS—in an Excel file or a Word document, for instance. If the information doesn’t reside in the BMS, a broker can’t benefit from real-time policy change; for one thing, the broker would have to enter the data into the BMS in the first place, and that would wipe out the reduced input time that real-time policy change is supposed to afford.
In any case, real-time policy change addresses challenges on the personal lines side more than the commercial side, Durepos says. Brokers face more of a threat from the directs on the personal lines side of their business due to the directs’ perceived advantages in the area of serving customers through technology. Second, brokers generally face more changes for personal policyholders—particularly auto, as customers buy new cars, change locations and experience other adjustments in their lives.
Impact on Carriers
Brokers indicate that carriers that deploy real-time policy change will likely win more customers—and probably keep more current clients—by jumping ahead.
“We can provide better service with this company than we could with other carriers that don’t offer real-time policy change,” says Mac from Acumen.
Will all brokers sign on to use real-time policy change? KTX’s Graham is skeptical.
“I don’t think everyone’s going to adopt it,” he says, predicting that just 40% of brokers will do so. “We’ve seem similar adoption levels with others offering advanced technologies.”
Even though carriers have been waiting a while for real-time policy change to become a reality, Evans notes that it will take time for brokers to embrace the technology.
“Brokers are busy servicing their clients and even welcome system improvements can be viewed as a distraction,” she says. “In the case of automated policy change, we hope for full uptake by the end of Q1.”
Quantifying Real Time
Real-time policy change is now a reality, but just how fast is it? Ask the companies behind this new system and brokers about to use it, and you’ll hear:
Copyright 2013 Rogers Publishing Ltd. This article first appeared in the February 2013 edition of Canadian Insurance Top Broker magazine.
This story was originally published by Canadian Insurance Top Broker.