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Why brokers hail the D/X Initiative as “the start of the revolution”


February 7, 2019   by David Gambrill



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A “watershed moment” of industry cooperation could lead in April to what brokers are heralding as the most significant technology breakthrough in broker-carrier connectivity in decades.

Representatives of every broker association across the country met in Toronto on Jan. 29, along with 16 to 17 carriers and all of the Broker Management Systems (BSM) vendors in Canada, to discuss a huge leap forward in the Data Exchange (D/X) Initiative. The D/X initiative has almost completed its work creating a new data exchange method for real-time first notice of loss transactions.

The method is likened to downloading an app from an “app store.”

Essentially, carriers and BMS vendors are creating a code for broker transactions such as first notice of loss; the codes are then bundled into a CSIO standard-compliant “reusable service.” The completed reusable service is then posted into new Reusable Data Services (RDS) Library.

Once posted in the library, the reusable service would be available to all members of the Centre for Study of Insurance Operations (CSIO), allowing brokers and carriers to connect across multiple platforms in real time on first notice of loss queries.

A reusable service for first notice of loss is expected to be ready to place in the library in April 2019. Up to six other reusable services — including claims inquiry, loss runs, and premium inquiry — are planned to be created in time for 2020 (potentially as early as the second quarter). Another six or so broker-transactions could be placed in the library by 2021.

“This event is the start of the revolution,” says Michael Loeters, past president of the Toronto Insurance Council (TIC), representing commercial brokerages across the country. “It’s the biggest revolution in technology for the P&C industry in 50 years. Today’s the day we kick it off. We’re not talking any more, it’s not proof-of-concepts. We’re doing it, that’s the big difference.”

Two things have created a favourable environment for brokers, BMS vendors and carriers to cooperate and achieve real-time broker-carrier data connectivity, Peter Braid, CEO of the Insurance Brokers Association of Canada (IBAC), told Canadian Underwriter in an email.

First, “the retirement of legacy systems is creating a real opportunity to advance broker-insurer connectivity,” Braid wrote. “All stakeholders recognize that we must work together to continuously improve the customer experience. If not, a space may be created where customers seek other options.”

Second, seven BMS vendors in Canada have signed an IBAC Data Exchange Partner Statement in which they agree in principle to share intellectual property through reusable services. Signatories to the statement include Applied Systems, Brokercore Inc., Custom Software Solutions (CSSI), Policy Works, TechCanary, Keal Technology and Power Broker. “This is something that we have never seen before,” Braid writes, “and creates an opportunity to make significant progress in this area.”

Using reusable services in the D/X Initiative, a broker would put a first notice of loss (FNOL) into their broker management system. The FNOL would be sent directly to an insurance company in real time. After it is placed directly into the carrier’s back-end system, a claims number from the insurer’s system would come back into the broker management system. The whole process would happen in seconds rather than hours (or days).

“The way it happens today is, we take the phone call from the client, we put the information in an email, we send an email to some email address, somebody on the insurance company side bangs it into their system, they put in a claims number, they send it back in an email to us, and then we take the information from the email and put it into our broker management system,” says Loeters.

“It’s a transaction that we do every day. Look at how many people and how many manual processes are involved in something that’s so simple. From a customer experience perspective, it’s terrible. A customer has had a claim and they want to know what the claims number is, they want some kind of confirmation that the company knows something about it, who the contact is. The broker wants the same thing. Right now, the whole process takes 24 hours at best. We’ve demonstrated that it can be done in three seconds.”

It’s an oversimplification to say reusable services posted to the library will be plug-and-play, Kim Opheim, IBAC’s consultant for broker technology, told Canadian Underwriter in an interview.

“Just because it’s in the library, or someone takes it out of the library, there is still work required,” he said. “There is work required on both ends. On the broker’s BMS, there needs to be a button that you can push, such as ‘Claims Inquiry,’ for example. The BMS vendor has to build that into their system. The carrier also has to build it on their side, so that they can push that data to the BMS.”

But the work should be nominal, Opheim said, noting that 80% to 90% of it will already be finished when the reusable service is posted to the library. “The eyes of 38,000 brokers are on the carriers and vendors to make sure they work on this,” Opheim said, referencing remarks made by IBAC president Chris Floyd during the Jan. 29 meeting in Toronto. “This is very important to the broker community. We will be watching this. We will be challenging our insurers and vendors to make this a high priority when a reusable service is available. If we want adoption, we have to get to that place where most carriers and most vendors are using these transactions.”

Lynne Von Wistinghausen, managing director and head of operations and technology of Marsh Canada, said client demand for ease of doing business will likely lead to the success of the D/X Initiative. The big thing is not to have proprietary answers to brokerage-carrier connectivity.

“Long gone are the days where each insurer builds a portal and then teaches brokers how to use each portal,” Von Wistinghausen told Canadian Underwriter. “That approach isn’t sustainable on so many levels. It costs too much, takes too much time, and requires brokers to learn and use multiple different systems, which isn’t realistic in this day and age. We need one way to access this information in real time. Insurers and brokers alike are looking for ways to streamline processes and make it easier to do business. As the broker community continues to move this [D/X] initiative forward, those insurers that join in will reap the rewards of ease of doing business.”

 

Editor’s Note: This version of the article corrects Michael Loeter’s title as past president of the Toronto Insurance Council; also, Applied Systems was a signatory to the data exchange partner statement, not ‘iSystems,’ as previously reported. Canadian Underwriter apologizes for the errors.

 



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6 Comments » for Why brokers hail the D/X Initiative as “the start of the revolution”
  1. Ken S says:

    OMG this is such bunk. I was at the session. It was poorly attended to be frank. It is clear that there is nothing tangeible done. Anyone can see that. And all the greedy vendors were hanging around just waiting for their payouts for this.

  2. Nav says:

    Once again I am here to say that this *makes no technical sense*. I get that these people are volunteers, and I get that there is a lot of lobbying going on with the BMS companies who make money off point to point projects. But this is causing churn where there should be none.

    [The method is likened to downloading an app from an “app store.” ]

    Are you joking with me? Who told you this could b anything like downloading something from the app store? What has to go on to expose APIs from our corporate environment is NOTHING akin to anything noted in this article or suggested by IBAC. They are totally out to lunch.

    “Pushing buttons”? You need real insurance company tech expertise. The vendor side is simple and they should be enhancing their products now. The workflow changes that the current BMS products need for modernization is huge. But vendor work is insignificant when faced with the reality of the insurance company tech landscape. BrokerFlow is a much more desirable model for us and I suspect for most insurance co’s.

    Those insurance co’s involved in D/X are those that are notoriously weak in tech. Not being rude but you can clearly see the impact that this groups is having on what is being said here. Stop!

  3. Marcus K says:

    IBAC is supposed to be working for me – THE BROKER. Instead we get this type of crap. “brokers are heralding as the most significant technology breakthrough”. Nope. We aren’t. What we’re doing is having a huge consideration on what value we are getting frm IBAC at this point. As a broker I’m def aware of where my markets fall down on tech. RSA and Travelers are certainly the weakest in terms of broker connectivity. Wawa had said that they were 100% behind brokerage distribution but I see them getting embroiled in this silly idea. Meanwhile the strong players are moving forward with APIs and getting to a common market solution to help me – THE BROKER. So if I – but a lowly broker – know this why doesn’t IBAC? I think they hired in some bad advice for one. The TIC involvement def isn’t helping. So where do we go from here? IBAC is off in one corner with my markets who are already in the doghouse with tech. The rest of the companies are moving off in another direction. I know that i need this connectivity in order to sustain my business. And i get that there is no time to waste on this. I’m thinking that we brokers need to band together to get the change made we need to survive. This article shows well and clear that IBAC isn’t going to move where we need them to move. They are spending our resources on a direction that won’t help us. I’m considering how we mobilize on this. Suggestions?

  4. Michael Loeters says:

    These comments are simply false. Ken…you were obviously not there. The room was packed with people having to stand at the back of the room. Including people who connected by phone there were over 100 people who took part in the DX launch with the broadest cross section of the P&C eco-system of any such event ever. Some of the insurers insurers in the room are in fact recognized as some of the most technically progressive and have fully endorsed the reusable services model. It is not a new model but rather a model of connectivity that has been used in the rest of the financial services industry for more than 15 years. It is just new to the P&C industry. This model has also been fully vetted by the architects at CSIO, global insurers and some of the largest brokers in the world. All have done a full technical analysis and fully believe it will work like it currently works successfully elsewhere.

    The path forward is not easy. These things never are. There is no model out there that can promise to be simple. As the article states DX is not a simple plug and play. There is will work that still needs to be done by all parties but the point here is that by sharing intellectual property and eliminating duplication of effort we can realize connectivity faster and at a lower cost for all.

    We are celebrating that we are no longer talking. We have the support needed and the work has begun. In a few short months we will be able to show tangible progress. Our next challenge will be managing expectations because wide-spread adoption is not going to be immediate. However, the early adopters will reap the rewards and others will follow. Again, the normal model of adoption for new technological advances.

  5. John Vila says:

    I don’t comment on articles but I really believe on this that IBAC is not working in the best interests of their members right here. I don’t get why they are pushing this. I am no technology expert for sure but neither is IBAC. That much is clear. There is A lot of misconceptions in the article. Even the Marsh rep saying long gone are portals. In fact they are just starting a whole other cycle. We need to make progress now and from what I’ve been discussing with the companies I work with this isn’t it. IBAC needs to take a step back and get coordinated with their memebers and the insurance companies. Our bms vendors will then need to change to meet our needs.

  6. Marc says:

    Since the BMS side is easy and the insurance company side is hard why’s this being pushed by IBAC as a solution? I don’t get it.This only benefits these vendors in my view.W/there hands out as always. We have been trying to get direct API access for our brokerage and the road is long when we see all the issues on the insurance company side. They are all different and w/there own issues. Let’s cut the PR work for the vendors (& TIC) and get down to business with our insurance companies and make something happen in a realistic manner for us regular IBAC members that are trying to modernize. Also not sure in why FNOL was front and center. How about useful things we actually need for our digital solutions we need to move forward with. I want direct rating with my insurance companies. No middle man. The companies want this also. I’m sure these vendors won’t backing that since they have conflicts selling this very thing to us. But it is what we need.

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