February 7, 2019 by David Gambrill
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.