August 13, 2018 by Greg Meckbach
Reducing the workload for human beings is one reason some insurance carriers are participating in part of the Insurance Brokers Association of Canada’s Data Exchange project.
“We are constantly looking for ways to eliminate manual processes, to eliminate administrative functions, and try to focus those resources for higher value-add to clients,” said Mark Lipman, chief operating officer of American International Group Inc.’s Canadian branch.
Lipman was explaining – during the recent D/X launch in Toronto – why AIG is participating in a “proof of concept” of an application programming interface (API) intended to let a broker submit a first notice of loss (FNOL) to a carrier.
In essence, the intent of an API is to let a broker’s computer system communicate with an insurer’s computer system. By contrast, many brokers say their people spend a lot of time typing in the same information twice – once in the brokerage system and a second time into a carrier portal.
Besides AIG, Saskatchewan Government Insurance, Travelers Canada and RSA Canada are also participating in the proof of concept.
In general, an insurer’s shareholders “are expecting to see some kind of uptick in the results of the company from an initiative like this,” John Elliott, RSA Canada’s senior vice president and chief information officer, said during the D/X launch, hosted Aug. 1 by the Toronto Insurance Council.
One upside for a carrier’s shareholders could be improved operating efficiencies, or “taking human beings out of the chain in processing” information, Elliott said at the D/X launch.
With D/X, IBAC aims to reduce the collective time and effort needed to build APIs, or web services, that would let a brokerage’s software exchange information with a carrier’s software. With D/X, IBAC aims to give brokers, carrier and software vendors a “repository,” or a “reusable data services library.” That way, one company can build a data service and other companies could use it.
Insurers should work together instead of keeping APIs to themselves “and hoping somebody will come out with the next toaster, next best sliced bread,” Pattie Gibson, senior director for digital strategy and delivery at SGI.
APIs could be used for “simple things like direct billing inquiries, or claims status updates – those types of things” said Steve Whitelaw, Travelers Canada’s vice president of information technology planning, execution and operational effectiveness.
“Last time I looked at the numbers, over 50% of calls into brokers were inquiry-related policy and billing,” said Whitelaw, who also volunteer as chairman of the board of the Centre for Study of Insurance Operations (CSIO). “Those are not value-add transactions.”
Carriers will benefit if they can “take out the cost” of dealing with such queries through initiatives like D/X, Whitelaw suggested.
“Where there is friction and inefficiencies, there are costs,” added Whitelaw.
“We make product sales harder than it has to be for brokers,” Gibson said of insurers. “All this information we need for rating – how can we simplify that and how can we use services out there to reduce the number of questions we ask and make that process seamless?”