Standards and Innovation
Kevin Campbell, President, Policy Works Inc.
John Eastly, Vice President, Product Development, Policy Works Inc.
One of the things we like best about our jobs is that we get to travel all across this country and visit with brokers to find out what they need. And one of the questions that brokers always ask us is: “Where is the industry going with commercial lines data exchange? What will we see in a few years?” And our standard answer is: nobody knows.
What we do know for certain where we are today. Most of today’s developments tie back to the release, 1.5 years ago, of CSIO’s XML standard for commercial lines data exchange. Policy Works has partnered with four insurers—ING, Gore Mutual, Aviva and Royal & SunAlliance—to provide brokers with a commercial-lines upload solution based on the CSIO XML standard. These integrations allow brokers with Policy Works to upload their policy data to any partner’s website with the click of a mouse.
Brokers have been uploading their data from Policy Works to ING’s SaversCL website since last March. We are in the final integration testing of upload with Gore Mutual, Aviva and Royal & SunAlliance and will be starting Beta testing our brokers in a few weeks. We are also integration testing a full download capability of a completed quote from ING to Policy Works and will be beta testing that as well. We want to thank these four insurers for partnering with us and having the vision and fortitude to be pioneers of commercial-lines data exchange in Canada. Together we are improving broker workflow.
Standards enable innovation. When the Wright brothers needed an engine for their experimental aircraft, they had to build it themselves. Their machinist carved the crankshaft out of a solid block of metal. That was fine for an experimental aircraft, but we wouldn’t have modern air travel if all the parts were still hand-crafted like that. Once the Wright’s proved the principles, we needed standards and infrastructure to enable the innovation. Standards enable innovation. And standards enable data exchange.
We’re going to talk about data exchange in the context of the broker distribution channel in a moment, but first we want to start with a simple example that we can all relate to. Remember the days when you could write a cheque to make a purchase at a store? The cashier would ask for two pieces of ID to verify who you were. Then he would check to make sure that all of the details of the cheque were filled out correctly. And finally, they would accept your cheque on good faith that you actually had enough money in your account to cover your purchase. The debit card changed all that. The neat thing about the debit card is that it didn’t fundamentally change your relationship with the cashier; it only streamlined it and made it better. So standards and data exchange lead to innovation. And innovation improves existing processes.
So let’s look at the processes in the broker distribution channel. Instead of the purchaser and cashier, we have the broker and the underwriter. Brokers like dealing with people, not computers, and so when there’s a question or a problem they are quite happy to pick up the phone and call their underwriter. All the historical innovations in the channel—faxes, email, and so on—are built on this relationship. This relationship is key to the channel.
Sometimes people naively associate data exchange with automation. But the last thing we want to do is get rid of the relationships between people. Data exchange should augment these relationships. So what we want to do is use data exchange to streamline or automate the low-value activities that brokers and underwriters are currently doing such as re-keying data so they can spend more of their time on the high-value activities unique to the channel. In other words data exchange should make the phone call between the broker and the underwriter more effective.
So, getting back to the original question—where is the industry going with commercial data exchange? We still say nobody can give you a really detailed answer. But we believe the answer is all about collaboration. Data exchange will enhance collaboration between the broker and the underwriter. And that will mean different things, depending on the task at hand. Currently at Policy Works Inc. we’re integrating the broker’s CMS with the company’s web quoting tool. Eventually, for simple package policies, that might go away and be replaced with fully automated quoting tools. In the mid-market, we aren’t likely to see the kind of standardization that allows for full automation, so we see data exchange providing seamless sharing of data to support the interactions of broker and underwriter.
So, just as the Wright brothers could never have predicted modern passenger jets or the space shuttle, there will be some innovations that come along that nobody has even thought of yet.
April 2008
