November 16, 2017 by Canadian Underwriter
Responding to an insurer’s call for carriers and brokers to find tech solutions to help solve the industry’s “administration problem,” brokers have responded by welcoming such a dialogue, citing several initiatives already dedicated to the task.
RSA Canada president and CEO Martin Thompson gave a presentation on technology at the Insurance Institute of Canada on Wednesday, in which he urged insurers and broker partners needed to figure out ways to reduce and eliminate process inefficiencies in the property and casualty (p&c) industry.
“What is driving costs?” Thompson said. “As we get into that, one thing has become clear: the industry has an administration problem — we spend a lot of money shuffling paper. If you look across the process, the amount of double efforts between brokers working here and insurers working here, it just creates inefficiency.”
The answer to that inefficiency, Thompson said, is to work “with our [broker] partners to figure out who’s best doing what. I think increasingly when you look at things like robotic process innovation, when you look at some of the new technology platforms that are coming out, and you have a variety of tools that can help you get costs out of the system.”
The Insurance Brokers Association of Ontario (IBAO) recently formed a skills-based Technology Committee made of up member brokers to focus on this very issue. “Its purpose is to look at ways to advance the industry from a technology perspective and to enable brokers to better serve consumers more efficiently,” IBAO CEO Colin Simpson told Canadian Underwriter. “These efficiencies are driven by things like communication — or automation — between our operational systems, leveraging APIs (Application Program Interfaces) to better communicate between operating systems.”
In addition to the promise of APIs, Artificial Intelligence (AI) also can help broker create efficiencies within the industry, says Rick Orr, owner of Orr Insurance & Investment. “I believe Artificial Intelligence will deliver efficiencies on the broker side, however not nearly as many as on the company side,” Orr told Canadian Underwriter.
As brokers automate, there will be shift in human resource allocation, Orr added. “We’ll have fewer people-processors, but more customer-facing service people. We will also have more time to dedicate to the online environment, technology development and improved marketing and communications.”
But brokers are warned to be careful. Discussions should be focused on making the industry more efficient, not just carriers, says Bryan Yetman, vice president of operations at First Durham Insurance and Financial Limited.
“I am cautiously optimistic about talks between brokers and insurers to find ways for the industry to be more efficient as a whole,” he says. “But if you take a look at the results of similar conversations over the past 10 years, the concern is that insurers will create individual tech solutions such as portals. The end result is that, as brokers, we end up with 14 different ways to do the same thing. That may be more efficient for the individual carriers, but not for the brokers.”
Yetman cited eDocs as a good example of an industry solution. EDocs describes the electronic delivery of documents between insurers and brokers, as a good example of an industry solution.