Canadian Underwriter

Why carriers should share with their competitors

August 1, 2018   by Greg Meckbach

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Insurance carriers selling through brokers should share, with competitors, some of the software they make to exchange data with brokers’ computer systems, speakers suggested Wednesday at the Data Exchange (D/X) launch.

“We need to communicate more quickly and efficiently with our brokers,” said Marc Lipman, chief operating officer of American International Group Inc.’s Canadian branch. “If we need to build it on our own, the cost in the work is pretty tremendous.”

Lipman was referring to application programming interfaces (APIs), or software that transmits data between brokers, carriers and third-party vendors.

“You will hear terms like APIs, web services, various things,” said Michael Loeters, co- chair of the Insurance Brokers Association of Canada (IBAC) technology committee. “We are really talking about communications software – a block of software that essentially allows two applications to exchange data – to talk to each other.” Those applications could be billing inquiries, claims or policy changes.

Lipman and Loeters made their comments during the D/X launch at Vantage Venues in downtown Toronto. The launch was hosted by the Toronto Insurance Council, a brokers’ association known until recently as the Toronto Insurance Conference.

D/X is a set of principles IBAC developed around technology integration among brokers, carriers and other vendors.

As part of the launch, TIC is working on a “proof of concept” of a way for brokers to send a first notice of loss, on an insurance claim, directly to their carriers.

The “next steps” of D/X include working groups, which IBAC hopes to have up and running this fall.

While TIC led the proof of concept of first notice of loss, IBAC is spearheading the effort to roll out D/X.

It would entail a repository, or a “reusable data services library,” Loeters noted.

That library is not up and running yet.

Say a company wants to develop an API to let a brokerage communicate with a carrier. Instead of making its own API from scratch, the company could use a software application from the library and just do a “small incremental amount of development to make it work” for them, Loeters said.

“Let’s stop duplicating effort,” Loeters said. “The idea is instead of two of you building this, only one of you is going to build this and you are going to share it with your competitor and that is going to significantly reduce cost and accelerate the innovation.”

He compared the APIs that carriers could share with one another as utilities such as light, power and water.

“Data connectivity is not a competitive advantage,” he said. “It’s just communication.”

Lipman agreed.

“I still compete – I win or lose – on the quality of our products, our underwriting, and claims service,” he said.

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7 Comments » for Why carriers should share with their competitors
  1. John K says:

    I remain surprised at how non-technical people want to talk tech.The expensive part of integrating is the enormous sums that almost all of the tech companies want to charge us companies for connecting to their tech. If you are pushing them to do these one-to-one connections that’s not going to change, rest assured. From a company perspective nobody has adopted CSIO XML and nobody is going to since it doesn’t gain us anything. The standard is incomplete and verbose when it doesn’t need to be. It’s also subject to great interpretation which would lead to very different APIs. I wonder if this group knows what they key difference is between Interact and what needs to be done here is insurance in Canada. I do. My peers in the crowd yesterday do. Either stop talking tech or hire tech people to help you.

  2. DHT says:

    How come IBAC is so out of step with the brokers and insurance companies? I sat through this “event” yesterday (not a demo for those who weren’t there. There is no work done) I have participated in the work being done by the IBAO and been made optimistic. One has a path and a viable horizon. One does not. Throw CSIO in there and it really is the dog’s breakfast. I fear for the broker dist. channel if IBAC keeps running off stage left on this stuff. I don’t know that it has the time to wait.

  3. Fred says:

    I’m clear that if we can’t move rapidly to get data exch. completed brokers will fail in customer serv. If that’s the reality we are racing against we should all be driving forwards with one goal. As a CIO I see what’s failing technically on data exch. I really don’t get it that IBAC doesn’t. Meet on Wed wasn’t well received by companies. The tech co’s IBAC wants to rely on are one of the biggest problems today. They are a billlion dollar tertiary industry inbetween us & our brokers that neither of us gets great value out of. Solutions we think best as an industry need to be driven only by those direct parties involved. Insurance companies and brokers. Tech vendors are then a consumer of our direction. The industry has decided to right this mistake of the past. IBAC really needs to get help and now.

  4. Mark says:

    I guess it’s hard for some folks to move with the times. Best day ever for the aged technology vendor group. If time was suddenly to stop right now on modern integration and we rolled back to were a DX world was the only show in town the technology vendors could continue over charging us while enjoying their lavish lifestyles. For the brief time left in the distribution channel anyways. IBAC needs to get with the times.

  5. Martin L says:

    Mr. Loeters is no doubt a great supporter of the insurance industry, and likely donates his time. But it could be suggested that what he is doing here is very harmful to the broker channel on the whole. There is no such thing as reusability in the sense he is suggesting. The complex nature of our tech legacy in CDN is not found anywhere in the world and without understanding the actual tech issues here Mr. Loeters is suggesting that there is a magic solution. This seriously erodes the actual work being done to bridge this divide. To add insult to injury we see the technology companies in the chain (who have become super rich off keeping data exchange monetized) cited at every turn on this. Brokers aren’t pawns and shouldn’t be treated as such. Last: FNOL is a critical activity in the end client relationship. Why in heavens would they look at this defining moment in our service model to “automate” (I get that they haven’t done anything yet, but in theory). Brokers and co’s woudl be 100% aligned on client contact at such an important moment needs people not computers.

  6. Michael Loeters says:

    The speaker at the event (Don Anderson) was one of the architects of Interac in Canada and is in fact a highly technical and well recognized expert in the area of real time data exchange. Kim Opheim from IBAC who was also there and is also a technical expert with years of BMS experience. Brock Andrew from CSSI is also a leader in Canada on the topic discussed. All completely endorse DX. The world runs on standards and IBAO agrees with this as well. The reality is that there are choices for all industry actors as to how they want real-time integration to happen. Judging by the number of CIO’s of insurers who immediately signed up to be part of the DX Working Groups I would say they believe the DX model and use of standards out of the gate is sound. Every industry player is going to need to do their own extensive research on the options and choose the path they feel is best for them. I think we should be excited there is so much energy there is in the industry about this topic and to solve the problem. We are no longer talking….we are doing which is an amazing thing. The Toronto Insurance Council web site has posted some great resources that will help people understand the DX option and if it might be a good option for them.

    • John K says:

      Who signed up for this? I didn’t. No peer of mine did. Let’s be transparent here please. And don’t present that you are speaking for the industry when you are not.

      Nobody you have cited knows anything about the insurance company landscape. This is where the actual cost is. And we have said that we are no longer paying these vendors and integrators and any other commercial company making money off our channel to do what we can do better and more efficiently through a modern approach.

      BTW interac has no relevance to insurance data. We aren’t talking about numbers but highly contextualized data. If you had actual tech input you’d know this. Us CIO’s in Canada know this. If you had actual tech input you would also know that the prospect of a reusable service is plain rubbish based on this.

      CSSI is the smallest BMS in Canada so it’s nice that they have a view, but they definitely not tech experts in anything other than their own small BMS.

      CSIO standards are also problematic but that’s a larger discussion that’s underway in the industry and has nothing to do with trying to push 1 to 1 mapping world. We have to empower brokers now and give them the data they need but we need to do self-service properly.

      There’s a path forward and 16 of the CIOs and CEOs from the largest carriers in the market are on board (list available online). IBAC knows this. Why on earth is noise being generated in contravention to the industry approach that everyone’s committed to?

      Why are these old vendors being given such a pedestal position when they are a very large part of the problem with their astronomical connection fees? Your model only further enables this. Seems shady doesn’t it. Just like all of these committee having the same committee members. And that is a major problem.

      We have lots of issues to deal with but hopefully 2018 is the year for things to get cleaned up. My peer group is looking to keep coordinated on this because it is the right thing to do.

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