For the past 47 years, independent P&C insurance distributors, insurance carriers, and suppliers to the community have invested large quantities of time, energy, money, and credibility in seeking to rationalize insurance data transfer between brokers and carriers (now commonly referred to as ‘broker connectivity’). We believe consensus exists on two points:
- There continues to be a need for rationalized data exchange between brokers and carriers, but
- Implementations have yet to come close to a critical mass.
Given the amount of change in business practices and technology over the past half century, we think it timely to take a breath and look at the basic constructs driving broker connectivity.
We’ll outline some of the challenges we see in this post, and list some possible guiding principles in another post in the near future. Our purpose is to get a conversation going, so we hope you’ll lend your voice.
Where do we find the consumer all this?
Let’s start with first principles. From the earliest days, the primary drivers for broker connectivity have been to preserve the independent distribution system and to allow more time for independent brokers to sell insurance, rather than key and re-key data into multiple systems.
But what , if anything, does this really mean to the end consumer? We assume that our customers want us to be efficient and effective, but can we make a direct linkage between connectivity solutions and improved quality of service to the consumer?
We have seen some examples, but they are exceptions, not rules. Perhaps it’s time to take a closer look at how we can improve our service, and see where connectivity materially contributes value to the consumer. Is it time for the consumer to have a voice? Perhaps she’d like some connectivity, too.
Do we have a clear vision of the purpose?
We think there are at least two different views of where broker connectivity should lead. On the one hand, we hear brokers tell us that they want their database to be the single version of the truth in regards to quotes, policies, customer information, etc. Transactions with carriers should begin and end in the brokers’ systems.
We have heard insurers say that they subscribe to the principle. However, we have not seen any carrier move to reduce the data it captures and rely on brokers’ systems. To the contrary, most insurers are moving to capture more data, and improve the data quality. What the carriers do want is more business that meets their risk profiles. We see large technology investments by insurers supporting this.
We believe that one major factor at play here is the ‘Who owns the customer’ conversation. This is a sensitive, but important part of the conversation.
Do we know where we are?
There have been a lot of attempts to quantify the implementation of broker connectivity, but not a lot of consistent measurement. Attempts have failed for a variety of reasons, many of which, we believe, boil down to market positioning. No vendor (or carrier, or broker, for that matter) wants to look like they are falling behind.
If we are to move forward, we need to implement simple, objective measures that provide enough information to gauge progress against goals.
Are we prepared to look at options offered by new technologies?
Many of the current standards in use for broker connectivity – ACORD/CSIO in North America – have not changed materially since since the early 1980s. They work just fine.
But there may be opportunities that we are not using to our advantage. For example, cloud based solutions allow for access to lots of on-line data that could simplify, or eliminate some time-consuming steps.
Is there a simple starting point?
The history of broker connectivity contains a number of initiatives that start with big objectives. So far, each of these has lost momentum as the complexities of the objectives were revealed causing project scope to expand geometrically.
Could we find a simple, non-strategic transaction that would add value without requiring customization? If that achieved some measurable critical mass, could this be the foundation on which other services could be added?
What do you think?
We believe that cracking the broker connectivity conundrum continues to be an important issue for the Canadian P&C insurance community. We recognize that a lot of smart people have been, and continue to be, actively involved in working to achieve success. Our suggestion is that taking a look at the basic constructs might bring a lot of things into focus.
We are really looking forward to a conversation around this. One place to start is in the comments section below.
I cannot wait for the discussion that follows this post! As a member of ORBiT, it has truly been frustrating to see the lack of commitment/action in achieving a single point of entry for brokers. The solution preferred by carriers is portals – which gives them what they want (broker inputting data) and, they believe, a competitive advantage (not).
Portals, as inconvenient and labour-intensive as they are, do allow brokers to give clients the minimum service they expect.
This does nothing towards moving the industry forward, which, in the end, could mean the destruction of a great insurance advocate for the consumer.
I believe the client owns their information and that brokers and carriers need access to that information to deliver insurance and risk management to the client.
We would each have our own system and simply draw in the data as needed to handle our piece of the insurance/risk management puzzle. The client/prospect gives us consent to access their data and retain only what we need to do the job they’re asking of us – it is truly their data.
This cannot be a solution for only one distribution channel – it needs to be industry wide – direct, agent, broker – everyone needs access to the same data to compete based on service offerings and value delivered. To me, all of this data is like the MTO driving record, MPAC, or AutoPlus data – it is centrally stored, maintained, destroyed and accessible by those who have permission.
This is not a fully formed idea for me yet, but I really, really like where it is going. The standards can be modified to ensure clean, valid data for each stakeholder – but the data is accessed in one place. Hmmmmmm….
I think this blog entry well summarizes the history and challenges of Canadian broker/insurer data interchange – ultimately the problem is not really technology but business related issues such as competition, funding, differing priorities… A good example of what can work is seen in the UK within the Polaris organization – which has existed for over 10 years. It was originally funded by both carriers and brokers but is an independent entity to support the efficiency of carrier/broker interchange. It promotes the use of standards, provides a technology platform that is flexible and continues to be governed by the industry. I believe that without a properly funded independent entity like Polaris – the existing Canadian broker/carrier interchange challenges will continue as is for the foreseeable future.