Canadian Underwriter

Real-time data exchange within reach for first notice of loss

January 25, 2018   by David Gambrill

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The Toronto Insurance Conference (TIC) has announced the rollout of the Data Exchange Model (Dx) Initiative, a proof of concept for real-time integration between an insurer technology platform and a broker management system (BMS) platform.

TIC has partnered with RSA, AIG, Keal Technology and CSSI to roll out the initiative, which focuses on exchanging claims information related to first notice of loss.

Real-time data exchange projects are well underway in various areas of personal lines insurance, but the Dx Initiative is unique because it seeks to extend real-time benefits into the commercial insurance arena as well.

“This is the moment where we prove ourselves as an industry, when the customer has a claim,” Dx Initiative chair Brenda Rose told Canadian Underwriter Thursday, when asked why the project focuses on the exchange of claims information. “We need to get the information to the carrier from the broker immediately so that they can activate the claims process and get the adjuster assigned right away.”

At this point in the claims process, Rose said, the broker needs to transfer the information to the carrier quickly and accurately, so when an adjuster calls the client, the adjuster already knows what’s happening.

“Adjusters don’t have to ask clients to repeat themselves,” said Rose. “Of all times, this is the time when we don’t want to irritate the customer by asking them to repeat what kind of car it was, the serial number, etc.”

Claims is a logical first step for applying real-time data exchange, said Rose. “This is certainly an area where there is a whole lot of manual work going on, and there’s a whole lot of information not being moved around at all.”

The Dx Initiative applies to first notice of loss in both commercial and personal lines contexts, and follows the Insurance Brokers Association of Canada (IBAC)’s Data Exchange principles. Among them:

  • Transactions must start and end in the BMS;
  • Systems must adhere strictly to the recognized CSIO XML standards for data and messaging; and
  • Electronic information must be sent directly to insurer systems without additional manual keying (which would not be recorded in the BMS).

From a technical perspective, tackling first notice of loss claims data is relatively straightforward, because the list of data points is finite. There may be “dozens” of data points in a first notice of loss form, Rose points out, as opposed to hundreds of interrelated data fields in an application for new business for a personal lines policy.

The proof of concept evolved out of the TIC’s June 2017 white paper, Commercial Technology Integration: It’s time to cut the costs out, which states: “the cost of doing commercial insurance through the distribution channel in Canada is too high.” The lack of technology integration between insurers and brokers has resulted in the insurers’ average expense ratio being estimated 32% (i.e. for every $1 coming into the company, 32 cents is paid out in costs).

The timeline for completion of the Dx Initiative will be spring 2018. At that time, TIC will publish a white paper to outline lessons learned. Also, TIC members, insurers and industry partners will be invited to attend a public demonstration of how it works.

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4 Comments » for Real-time data exchange within reach for first notice of loss
  1. S.K. says:

    I think IBAC needs to have a time out to regroup with the brokers. From the carrier side it seems to me that they are generating noise that takes away from the pivotal work being done right now that will actually get us to a place where brokers get the data they need and we carriers can provide it to them quickly and inexpensively. I have brokers calling me up each week to ensure that we are still working with the IBAO and ensure that we will be at the table for the IBAO model building that is happening. One solution that is achievable. Its all we needed here for the past decade.

  2. James Smith says:

    Why is this being done. Competes w/industry work already underway. We use Keal & want them to be focused on the bigger picture not one-offs that will go nowhere. Well if they want to keep our business that is. Maybe they just want the TIC guys. Anyway we are at the point where focused progress is vital to our brokerage and we will make the Broker management system switch if we need to.

  3. Jill says:

    If you think there is competing industry work already underway that is actually going somewhere, you are out of touch.

    Congrats to everyone on this project! We have two choices, sit around and wait, or do something. Thank you for doing something.

  4. Michael Loeters says:

    There are industry players who prefer to achieve real-time integration using the standards-based and straight through DX model without the need for translation. There are others that feel this is out of reach for them at the moment and the IBAO solution would be a better fit. It should be recognized that IBAO has always said that Data Exchange is the model the industry is striving for. Data Exchange is also the model endorsed by every broker association in Canada, including the IBAO who is playing an important role within IBAC on the national Data Exchange Action Plan. So why should those who prefer to just make the investment and get to Data Exchange now be hampered from doing so? We should be excited there is so much momentum on this issue, that things are actually being built, and there are options to get there. It is a great day for the industry. The Toronto Insurance Council has posted some great resources on their web site around Data Exchange and how it works for anyone interested.

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