SEMCI: The alternative to herding cats

It has been 11 years since the start of the ‘CSIO Portal’ project and more than six years since it was officially terminated. Its goal was to provide a standard medium through which all insurance-related transactions would flow, adding value to company and broker workflows alike. After five years of toil, the project was shelved and now serves as a cautionary tale to those looking to implement industry-wide solutions. So what went wrong? Was it the lofty scope or the closed-door politics that sealed the fate of something that sounded so good on paper? What happened to the SEMCI (Single Entry Multiple Company Interface) dream?

A good place to start is to understand how things may have played out if the project had not been cancelled. If the CSIO Portal project succeeded, would today’s landscape be different? The answer is a definitive ‘Yes.’ Brokers would have the efficiencies and real-time access to data required to compete with the direct writers. Brokerages’ operating expenses would be reduced: there would be no need for a separate quoting solution. In fact, one natural evolution of the CSIO Portal could have been the introduction of real-time interface feeds allowing brokers to capture and send data using Customer Relationship Management (CRM) and accounting systems. Systems such as Salesforce.com or Microsoft’s Dynamics CRM would have provided the more tech-savvy brokers with the ability to circumvent the need for a traditional broker management system (BMS) and leverage mainstream software packages that are less expensive and more functional. Insurers would still need to compete on price, but the true differentiator would be on the quality of service and highly influenced by the ability to handle claims effectively. The insurers and brokers who initially decided not to participate in the CSIO Portal would either have to succumb to the Portal’s benefits or risk losing their competitiveness to participating companies. Direct writers may still have gained ground but not at the pace or to the extent that exists today.

So here’s the problem: if there was so much merit in having a SEMCI-based portal, why did it fail? Perhaps it was because of the dependency on an industry-wide technical adoption of its use. This commitment was surmountable from a technical perspective, but the political implications of the project were too hard to overcome. The triumph of the participating brokers would have meant the demise of many of the vendors in the marketplace, ranging from broker management systems to quoting solutions. Fierce competition among the insurers – which for the most part are heavily-focused, ‘for-profit’ organizations – would have made the creation of a level playing field almost impossible. Shareholders looking for a return on investment would still want differentiation, thus adding to the political pressure of maintaining as much competitive advantage as possible. The fact that the CSIO Portal initiative survived as long as it did is an impressive feat and a testament to its proponents. Unfortunately, given the lack of a ‘critical mass’ adoption, the Portal couldn’t build the momentum it needed to navigate the political obstacles in its path.

Is there a way of making SEMCI a reality? The answer is again a definitive ‘Yes.’ But let us be clear as to what SEMCI is (and, for that matter, what it isn’t). SEMCI as a single solution will not work. But constantly striving for such an end goal will begin to deliver on the solution’s promised efficiencies, and yet retain flexibility of implementation. No all-encompassing solution demanding total assimilation will have the political support required to generate a ‘critical mass’ of adoption. SEMCI is not a piece of software; rather, it’s a mindset and approach to achieving the ‘start-and-finish-in-the BMS’ workflows.

So how do we get there? Given the increased competition between direct writers and the broker channel, coupled with the constantly evolving technical landscape, how do we as an industry work towards the SEMCI goal? Brokers are adamant that insurer portals are taking them in the wrong direction. Even though companies have made significant advancements to minimize the impediment of portals, brokers say they are still saddled with the burden of duplicate entry and the fundamental assumption that brokers will need to leave their BMS to access company portals.

One approach has been the automated integration between brokerage systems and insurer portals by way of connectivity solutions like WARP and Nexisys. Nexisys also provides automated upload functionality so the broker only addresses exception data. These implementations improve efficiency so dramatically – up to 80% – that brokerages refraining from using them not only affect themselves negatively, but unintentionally harm the entire brokerage channel. If we as an industry don’t take advantage of tools that provide significant efficiencies, we will lose the opportunity to serve our clients. One of our partners shared market data suggesting that there are close to 1,000 fewer independent brokerages today compared to a decade ago, when the CSIO Portal initiative was just starting. It’s survival of the fittest as the books roll and companies merge.

Solutions are in production today that will get us close to our SEMCI goals. Recently, leveraging our NexExchange product suite, we have being involved in a number of carrier projects focused on a non-portal upload model. The feedback has been phenomenal: brokers have the ability to work from within their respective BMS, entering only a limited number of company-specific questions. They use data in the BMS, supplement it with company-specific questions and send it to multiple carriers with one click.

As carriers, brokers and vendors work together on this issue, it is imperative to work towards the ‘critical mass’ adoption of solutions that enable SEMCI workflows. This will help overcome the political and technical challenges of wide-scale change. If we’ve learned anything, it’s that a single technological solution cannot be forced on the industry. Indeed, we’ve seen time and again that attempting to herd the cats is not the answer. If we work together as an industry to define the best practices, and let the natural pressures of competition define how vendors and carrier IT teams work together to deploy them, we can achieve what we set out to achieve so long ago.