Reaching Maturity
By Kevin Campbell, President, Policy Works Inc.
Reprinted with permission from Canadian Underwriter.
Brokers have been lobbying their insurance companies for commercial data exchange for some time. A 2006 technology survey by the U.S. standards group ACORD found that nearly half of agent/broker respondents said learning and using various company proprietary systems was their greatest challenge in supporting automation. And 47 per cent responded, “duplicate data entry” when asked to identify the major automation “time waster” in doing business. While no such survey exists in Canada, there is plenty of anecdotal information that brokers here are equally frustrated with proprietary web portals, data re-entry and input errors.
All that is set to change. Today, there are tangible signs that commercial data exchange is reaching a new level of maturity. Insurance companies are responding to brokers’ requests and working with them to deliver easier, more efficient solutions for commercial insurance.
The ability for brokers to upload commercial data into an insurance company web-based solution is a reality right now for several insurers, while the opportunity for companies to automate download of information to brokers is imminent in the months ahead. This year will see several insurers adopt upload (and eventually download) data exchange solutions for their commercial brokers.
Four insurers have begun the process of integration with a clear-eyed sense of what it takes to achieve upload from commercial management systems (CMS) to their web-based application and, eventually, download back to broker systems. ING, Gore Mutual, Aviva, and Royal & SunAlliance Canada have entered into agreements with Policy Works to exchange commercial lines data and develop an efficient integration solution.
In fact, Policy Works customers are already uploading their submissions to ING’s SaversCL quoting facility. The integration is developed using the CSIO commercial lines XML standards. All four insurers are also members of the Policy Works Certified Data-Exchange Partner Program, which helps validate the process of information transfer.
We asked these companies why they chose to pursue commercial data exchange, what the opportunities and challenges were and how they expected the future of commercial lines data exchange to evolve.
All insurers agreed that the central goal of data exchange is making it easier for brokers to do business with them. “We recognized that many brokers use technology to manage their commercial lines business. The logical step was to facilitate a data exchange between our technology and a broker’s technology,” says Peter Weightman, senior vice president, commercial lines, ING Canada. “We want to make it easier for brokers to do business with ING.”
“Simply put, our broker partners told us this was important to them and we listen very carefully to their feedback,” says Kevin McNeil, president and CEO of Gore Mutual. “While our GoBroker™ technology is among the best in the industry, seamless data exchange with broker management systems continues to be our goal.”
The benefits of commercial data exchange are varied, but insurers honed in on a few areas. “This is a great opportunity for Aviva and our broker partners to provide superior service to the end customer,” notes Linda Regner Dykeman, senior vice president, commercial lines for Aviva Canada. “With the enhanced efficiencies of commercial quote and bind in the hands of our brokers through our simple business solution, Fastrax, we are able to focus our underwriting resources on adding even more value to our broker partners and ultimately the end customer through our technical underwriting and risk management expertise.”
“By reducing the amount of time brokers and their CSRs spend processing policies, they are able to spend more time with their customers, get a better understanding of their customers’ businesses and deliver that personal service that customers value,” says Shawn DeSantis, senior vice president, commercial and personal insurance, Royal & Sun Alliance. “There are also cost savings for quoting and binding small commercial business.”
These companies are not blind to the difficulties associated with data exchange. “Based on experience in implementing different technologies, we know to expect the unexpected,” observes Weightman. “An area that has required more time and has proven more complex than anticipated is the mapping of coverages for the download. However, we know that putting the appropriate time and resources on this part of the project will pay off with a better solution in the end.” This functionality will allow brokers to automatically download the ING quote back into Policy Works, completing the round-trip data exchange of commercial quotes. ING expects to have its download operational in spring 2008.
The role of industry-based standards is a theme that all companies stress is crucial to efficient data exchange. “Working with the CSIO commercial lines XML standards is critical for companies looking to develop integration capabilities," says Terri Johnson, vice president of commercial insurance solutions at Gore Mutual. "What does this mean for our broker partners? This has simplified the implementation process so Gore Mutual can deliver solutions faster.”
“Without these standards,” Weightman adds, “the development and maintenance of the technology becomes extremely cumbersome, time consuming and expensive.”
“Industry standards allow vendors and insurers to build an interface that can be reused, which results in lower build costs for involved parties, and the interfaces can evolve in unison,” notes DeSantis. “There are a couple of distinct differences between personal and commercial lines standards: commercial lines standards were done with the benefit of the knowledge and experience of the prior personal lines standards. And commercial products are more complex so there is a recognition that the standards will need to evolve.”
As Aviva’s Regner Dykeman points out, the XML standards for commercial lines contain a certain amount of ambiguity. “The same data element can be captured in a variety of ways in different parts of the XML stream. We need to have open communication through CSIO, between vendors, insurers and brokers to ensure that we define the standard as tightly as possible so that we can deliver superior service to our brokers.”
The role of vendors should be one of supporting standards and openness instead of offering yet more proprietary solutions. “We believe it’s critical for software vendors and insurers to work closely together to bring efficiencies to brokers,” notes DeSantis. “It’s important that the software vendor is able to build its offering using an industry standard, like the CSIO XML standards, instead of proprietary interfaces. The vendor should also be an active member of the industry standards committee.”
In addition, software vendors "have an excellent understanding of brokers' processes and workflows," says Johnson. "By working with vendors and their members, Gore Mutual has the opportunity to apply this knowledge to our systems, modifying our processes to line up with the processes that our brokers have adopted. This helps us deliver more meaningful solutions."
With the upload of standards-based data from brokers to insurance company web-based applications already a reality, we wanted to know what the future holds for commercial lines efficiency and exchange.
“Our brokers want it all and so do we!” says McNeil. “Our plan is to allow all types of commercial transactions from commercial management systems. Brokers have told us loud and clear that they are looking for broker management systems integration. Gore Mutual is prepared to play a significant role in the delivery of that solution.”
“The opportunities with data exchange are many, such as general inquiry, billing, endorsements,” says Weightman. “We see commercial data exchange continuing to evolve and grow over the next few years and we expect that our business strategies, namely expanding the current ING capabilities, will reflect this fact.”
“With the success of Fastrax's quote and bind functionality, there is no reason we cannot expand functionality to include renewal and endorsement activity for commercial lines business in the future,” says Regner Dykeman. "Our brokers are telling us that this is what they want and we're listening."
“We anticipate the breadth and depth of commercial lines data exchange will continue to expand as the popularity of data exchange grows and reflects the changing Canadian insurance marketplace,” concludes DeSantis. “This could mean more complexity of product options, or added transactions.”
March 2008
