Connecting with Consumers

For years, brokers’ associations have been toiling with the question of how best to approach the escalating incursion of direct writers into the distribution channel. Association-driven attempts at the development and launch of a SEMCI (single-entry, multiple-carrier interface) solution have been unsuccessful thus far– the Quebec broker association, the Regroupement des Cabinets de Courtage d’Assurance du Quebec (RCCAQ), recently laid to rest its RCCAQ Central project, which in turn developed based on the wind-up in late 2005 of the multi-million-dollar CSIO Portal.

Carriers, brokers and vendors alike often cite political reasons as a primary source of failure. For example, it is often asserted that in order to create a SEMCI solution, carriers would have to give up proprietary information that might represent the source of their business advantage over competitors, and brokers would all have to put themselves on the same level of the technological playing field — irrespective of the level of their previous investments in technology — in order for it to work.

In the meantime, while debate about SEMCI solutions rages on, brokers still have to compete with direct writers who do not need access to multiple carriers in order to provide online insurance quotes to consumers.

So, what’s a broker association to do?

Develop a different form of technology for the purpose of online quoting — technology that doesn’t require industry-wide consensus or a treasure chest of cash to produce. In this spirit, during this past spring, the Insurance Brokers Association of Ontario (IBAO) partnered with

Compu-Quote to create MyInsuranceShopper.ca, an online resource that allows brokers to provide consumers with fast and easy online quotations from a variety of carriers.

The online shopper Web site is modelled on a different kind of technology than a SEMCI portal, which is a business-to-business application. The Web site “allows the brokers association to bring its brokers under one umbrella [and provide] an opportunity to present themselves to the consuming public,” says Compu-Quote president John Savage. “The difference with what the CSIO and RCCAQ were doing was they were building an application that would work between the insurance brokers and the insurance companies. That’s another world.”

NUTS AND BOLTS

The technology upon which MyInsuranceShopper.ca is based is not earth-shattering, Savage says. In fact, it’s a tweak on what’s been available on the market for more than a decade now.

The Web site employs a quotation tool that Compu-Quote built for the IBAO — a tool that’s very similar to products and applications already used by brokers. After quotations are generated, consumers are able to pass them along to brokers they have selected through the Web site. The broker receives the information within their rating application.

All of Compu-Quote’s applications have a rating service application, even though brokers have only local applications installed on their desktop, Brian Schwab, executive vice president of Compu-Quote, says. The broker’s local application calls through the Internet to Compu-Quote’s rating engine, which generates almost 1 million quotes in any given month, no matter how many carriers brokers represent.

Compu-Quote has developed a technology that allows business rules to be built into the rating application, says Savage. “Those business rules can look at all of the variables that are sent to the engine and evaluate those variables and do the looking up of the rates, etc.,” says Schwab. “Essentially, it sits as a Web service and is called by the various applications. So MyInsuranceShopper.ca calls the same engine that our rating applications in the brokers’ offices do. It sends a secure XML data stream to the rating engine that receives it, it evaluates the data and sends it back in XML to the calling machine.”

THE NEXT STEP

Savage predicts partnerships between software vendors and associations will likely strengthen in the future. And the focus of future technological solutions will not be so heavily dependent upon developing business-to-business technology, he believes, but rather on developing more consumer-centric products such as online policy issuance.

Of course, even to explore the possibility of online policy issuance, carriers will need to be on board and work with brokers, Savage notes.

“I think you’ll see a growth in the consumer’s desire to do business on the Internet,” says Savage. “And the success of the IBAO’s site and consumers will start the drive to provide increasing opportunity to provide issuance of the policy….I think that as consumers get more comfortable with transacting insurance policies and quotations, they will want to take that next step [towards online policy issuance].”

Schwab agrees. He points to what’s happening online in other industries as a sign of what’s to come in the area of insurance. “When you book a flight, do you do it over the Web, or do you still walk down and see your travel agent?” he asks. “I think we’ll see consumers moving in that direction. But for consumers, the broker’s role of providing advice and advocacy will be maintained.”

Schwab believes there’s been a cultural shift, with brokers of all stripes now focusing more heavily on the sales process itself. “The direct writers have taken market share, not because in our opinion they do any better job of servicing, but they are more focused on the sales process itself,” he suggests. “We see brokers looking to level that playing field.” Schwab sees the IBAO taking on projects like MyInsuranceShopper.ca as a means for independent brokers to rival direct writers, some of which have advertising budgets that individual brokers can’t match.

“The IBAO has looked at the collective group of brokers in Ontario, and if each contributes to the platform in marketing, advertising and technology, [independent brokers] can compete on a level playing field with the direct writers,” Schwab says. “Now we see the next step of that evolution: brokers will become more focused on the sales process itself and we’re building tools to help them achieve that.”

Both Savage and Schwab say they’re very pleased with the relationships they’ve developed with the associations. “Ultimately our customers are their members,” says Schwab. “Anything we can do to help them take back some market share, without being completely altruistic about it, makes good business sense for the both of us.”