Brokers seek carrier support for study of industry real-time data solution

Ontario brokers are attempting to marshal industry-wide support for an API hub solution that would provide real-time data exchange between insurance carriers and the broker channel.

“What we’re asking is that the carriers support the [Insurance Brokers Association of Ontario] in a feasibility study,” Adam Mitchell, president of Mitchell and Whale Insurance Brokers, told a panel discussion at the Insurance Canada Technology Conference in Toronto Wednesday. Mitchell is a member of the IBAO’s technology committee.

“[The feasibility study] is not to prove the technology works, we know API technology works—it’s here,” said Mitchell. “It’s trying to figure out what is the scope of [the API hub project will be], and what is going to be the order of roll-out. We’re all incentivized to be sharing this data back and forth as quickly and easily as possible, so that we can do business faster together.”

Brokers are looking at the possibility of building a centralized hub for application programming interfaces, or APIs, as an alternate way for brokers and carriers to exchange data in real time. Simply expressed, APIs are a type of electronic ‘order takers’ that accept requests for data from broker management systems, and retrieve and deliver the requested data from carriers’ back-end systems.

Brokers see a centralized API hub system as a way to avoid an inefficient, spaghetti-like tangle of API connections between individual brokers, carriers, technology vendors and new market entrants. By connecting everyone through access to an industry-wide API hub, the real-time data connections between broker and carrier systems would be accessible to all, and the process would be streamlined and efficient, the IBAO contends.

The proposed feasibility study would explore who would own the API hub, and whether that might be a non-profit organization such as the Centre for Study of Insurance Operations (CSIO), for example. Also, the study would look into the cost to run such a hub, and who would fit the bill for the costs.

Representatives of RSA Canada and Aviva Canada spoke in favour of the API hub (or related) model in a separate discussion on data exchange.

“I can tell you it’s feasible right now,” said Tom Reid, executive director of Aviva Canada’s digital broker strategy. “Let’s put it this way: every other industry in the world is doing it this way [real-time]. It can be done, no question about it.

“What it comes down to is that there has to be some convincing of people who are going to write the cheques. How does this [API hub] get done the best way? How do we get people on the same page? How do we get industry leaders to step up and raise their hands in the air and say, ‘Yes, I’m going to sign up for this?’”

Reid said the solution had the potential to recover its initial start-up costs. “There is a payback there,” he said. “We collectively are doing it [as an industry] not only because it’s the right thing to do, but at the end of this exercise, there is a significant amount of cost that comes out of the system.”

Carriers are already working on real-time data exchange with brokers, having invested hundreds of millions of dollars into two separate real-time solutions currently offered by Guidewire and Duck Creek. But the issue for brokers is that there are 90 insurance carriers in Ontario, and only a handful are working with Guidewire and Duck Creek. So while some carriers may be offering real-time data exchange through these options, brokers with multiple other markets will still have to connect to carriers that aren’t yet positioned to offer real-time solutions like Guidewire and Duck Creek.

“We all know there are a handful of companies working with [Guidewire and Duck Creek],” said IBAO CEO Colin Simpson. “What will happen if we don’t find something similar to this [API hub] is that you will end up with a handful of companies that will be able to interact with brokers in real-time. But if you have 12 companies in your [broker] office, your ability to service consumers is based on your lowest common denominator, not the three companies out of your 12 that can do real-time.”