SEMCI Standards

Considering the wide gap between broker management systems (BMS) and insurance company back-end technology infrastructure, the property and casualty industry has had to rely on a variety of applications to create electronic data exchange. These have involved company portals, broker middleware and data scraping, to name a few. The techniques represent necessary building blocks on the path to SEMCI. But many brokers and increasingly insurance carriers now recognize some of their long-term limitations.

The Challenge

These initial attempts at SEMCI addressed a very real challenge facing the broker distribution channel. Brokers and insurance companies have their own perspectives on the data they need to collect and store for transactions. They organize their own data in sometimes subtly different ways. This lack of validation and standardization makes the integration of data between systems more complex and prone to errors and re-inputs. In this environment, real-time electronic data exchange is difficult, if not impossible.

Increasingly, the P&C industry is realizing the shortcomings of early data exchange projects and moving away from short-term solutions. A big part of that move is the guiding set of principles advocated by the Insurance Brokers Association of Canada (IBAC) for real-time data exchange between brokers and insurers. These guidelines clearly state:

• transactions must originate from and return to a broker’s management system;
• all data transmissions must strictly adhere to Centre for Study of Insurance Operations (CSIO) XML standards;
• variations dictated by any unique characteristics of individual insurer systems are to be addressed on the insurer’s side of transmissions, rather than programmed into broker management software.

While IBAC is testing out these principles in a data exchange project currently underway with multiple BMS vendors and insurance companies, it is not necessarily pursuing an industry-wide SEMCI “solution.” IBAC has rightly outlined the parameters for how broker-carrier communications should be streamlined, leaving the vendor marketplace to deliver real-world applications that work.

This is the direction SEMCI is heading and productive individual solutions are starting to emerge. And these are coming to market. In fact, some are in place right now.

Real-World SEMCI

York Fire & Casualty is one example of an insurance company that can communicate and integrate directly with a BMS without any middleware or third party software required by the broker. Brokers using Keal’s sigXP BMS are able to perform inquiry and new business upload for auto and property directly with York.

Keal Connect uses a connectivity solution provided by iter8, called communic8, that integrates data with insurance company policy administration, staging areas or support systems. This eliminates the need for any broker-required middleware or third party software. Brokers can work in their BMS and focus on their own business without worrying about data translation or exchange problems. This greatly reduces duplicate data entry, overlapping broker-company workflow and resultant
inefficiencies.

The next big opportunity is policy change and endorsements. This is a complex area for many reasons, and has long been a thorn in the tail of brokers seeking efficiencies in routine but data-intensive transactions. The fact is, however, that modern technology solutions can overcome this hurdle. A sharp focus is required on coordination between BMS and carrier systems, process orchestration and implementation. Progress in policy change is imminent in a matter of months.

It is important for brokers to test any purported SEMCI solution against the principles enunciated by IBAC. The Keal Connect service sends CSIO XML data in real-time from the BMS directly to York’s broker support systems. The transaction starts and ends in the BMS, with no additional broker software or middleware necessary. The workflow is the same for the broker. Data integrity is maintained at both ends of the transaction process through close adherence to standardized data elements and fields. Most importantly, the broker experiences increased efficiencies in the form of reduced data entry and less “clicks and screens.”

SEMCI’s Efficincies

The last point is key and, in fact, measurable. Keal has studied the amount of time it takes a broker’s office using Keal Connect to complete a transaction versus a broker using regular methods (i.e. traditional duplicate entry portal or middleware). It takes a customer service representative (CSR) 2.5 minutes to complete a transaction with Keal Connect versus nine minutes for regular methods. That 6.5-minute – or 70% less – time difference may seem relatively minor in isolation. But when you multiply that by dozens or hundreds of CSRs and thousands of transactions, you can see the potential for vast efficiency improvements. In the broker’s office, every click represents money.

Measured in another way, we clocked how much longer it would take a CSR without a true interface like Keal Connect to complete the same amount of transactions as a CSR with the interface in a given day. We estimate that, on average, it would take an extra one hour and 43 minutes for the CSR without the interface to do the same amount of work. Again, multiplied across all staff, that is a potentially huge time and cost saving (or burden) for brokers.

These efficiencies are clearly beneficial for brokers. But what about insurance carriers? The obvious advantage for insurance companies is the integrity of the data. Through Keal Connect, insurers receive accurate information that can be integrated directly into their operating systems, with greatly reduced data entry or corrections. The company’s brokers have much greater ease of use in conducting routine transactions such as inquiry, new business and endorsements. That means less time spent on manual intervention.

The reality is that for brokers and companies to truly interface and share information, there must be data integrity. Data that has integrity is identically maintained during any operation such as transfer, storage or retrieval. Put simply in business terms, data integrity is the assurance that data is consistent, certified and can be reconciled. It also means that any true real-time data exchange solution has to benefit both the broker and the insurance company. There are no shortcuts to SEMCI.

York is one example of an insurance carrier demonstrating tangible commitment to the independent broker distribution channel. It was able to bring the Keal Connect integration project for policy inquiry and new business to brokers in less than two months. The same potential exists for virtually any carrier in the Canadian P&C marketplace.

The big-picture advantage of true SEMCI solutions for insurance companies is that enhanced broker efficiency means a stronger distribution channel. Those carriers committed to independent brokers should regard working, functional real-time data exchange solutions as a weapon in their ability to compete with banks and direct writers. It’s time to move from shortcuts to investments in real-world SEMCI solutions.