October 20, 2011 by Canadian Underwriter
Ontario’s insurance brokers appear to be making some headway with insurers in making sure brokers have a role in educating consumers about the use of predictive analytics in insurance underwriting.
Statistical data packages that insurers use to underwrite insurance are becoming more sophisticated, allowing insurance underwriters to consider more variables when calculating premiums associated with a consumer’s risk. This, in turn, makes it more complicated for a broker to explain how a consumer’s insurance premium has been derived, a phenomenon brokers call “Black Box underwriting.”
IBAO president Peter Burns says Ontario’s brokers have been working hard with insurers throughout 2011 to make sure insurers “keep brokers in the underwriting loop.” This means educating brokers on how predictive analytics are applied, so that brokers can relay the information to consumers with more clarity.
“Your IBAO team has worked hard with insurers to convince them of the value of the broker in the equation and the need for broker tools to properly service the customer,” Burns said in an address to the province’s broker association membership at the 91st Annual Convention of the Insurance Brokers Association of Ontario (IBAO).
“At least two insurers have now made it possible to adjust existing business quotes so brokers can consult with their clients properly. We continue to work with insurers to keep brokers in the underwriting loop.”
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