President, Keal Technology
A recent ad-hoc survey found that fewer than 1% of brokers work in real time with their insurers and none of them support access to their insureds on a 24-7 basis. The technology is available that lets brokers operate in real time with their insurer suppliers, but the dedication to take full advantage of it is lacking.
The aim
of this article is to outline what stakeholders in the independent broker
distribution network need to do, not only to maintain but to increase their
presence and provide a healthy, stable, competitive marketplace for consumers,
employees and shareholders.
Consumers
want value for their insurance dollars, access to a trusted advisor, and be
able to do simple transactions in real time from wherever they are and from
whichever devices they choose.
Technology
providers want to equip brokers with better technology than other distribution
networks. This is a huge element in the equation to let the independent broker
network survive and, more importantly, to thrive.
It has
been said that the technology necessary to compete with that of direct writers
is here now. The technological framework to deal with new issues is also here,
and one of those technologies is telematics.
Telematics
in Canada is barely a year old, but the regulatory and standard organizations
have spoken. This is moving at an accelerated pace, which is a definite positive.
However, will our distribution network move at an equal pace? The Centre for
Study of Insurance Operations, and the Insurance Brokers Association of
Ontario’s IBRI subsidiary also deserve recognition for their contributions.
Last
fall, Keal Technology did an internal ad-hoc survey with brokers in the
Canadian market place. That survey found:
•Less
than 50% of brokers work in a true paperless environment;
•Less
than 20% of brokers work with integrated telephony;
•Less
than 1% of brokers work in real time with their insurers;
•0% of
brokers provide support access to their insured's on a 24/7 basis.
It should be noted that in 2014, some brokers say they still do not download using CSIONet because they do not trust the data.
Owners
and managers of brokerages are often asked: On a per-cent basis, how do you
think your organization is using the full extent of your BMS, whichever make
and model you have? The answer is fairly
consistent: "My people are pretty good; they probably use it to 75%-80% of
its capacity."
However,
the answer changes when we at Keal offer them one day of consulting – with no
charge if their statement is verified as correct. On the other hand, they would
have to pay for that consulting if it turns out they do not use their BMS to
the capacity they claim. I have not given a free day yet, because so far,
brokers have realized that the use of their existing tools is 50% or less.
The
Insurance Brokers Association of Canada has been instrumental in providing
guidelines via white papers on many technology issues. They are to be
complimented for their approach and efforts in this area. Are stakeholders
taking these as serious as they should, BMS providers included?
What Is
Left To Do?
Brokers
need to look at their organizations from ‘outside the box’ and start fully
utilizing the technology they now have. There is an urgent need to invest in
their organization to catch up. Time and dollars must be committed. This will
result in transforming their organizations into efficient, client-focused and
marketing oriented companies, growing over a short period of time and providing
sustained profitability.
Brokers
also need to lobby and work with their insurers to seriously commit to a
technology partnership.
Insurers
need to put a greater priority on real-time integration with brokers. Is it
normal that fewer than three insurers are committed to doing automated policy
change transactions with brokers? This is a transaction that accounts for an
average of 30% of all transactions done in a broker's office and yet it brings
less than 1% of the dollar revenue to the brokerage. Most importantly,
consumers want to do simple changes as defined by them when and from what
devices they choose. In a 2013 Deloitte survey focused on consumers dealing
with the independent broker distribution network, 52% of consumers confirmed
that they will move to direct writers if they cannot do simple policy changes
(such as change of address) in an automated manner with their brokers. Unfortunately, there are many other examples.
At the
rate we are going, it is difficult to foresee the day when 80% of brokers can
operate in real time with their insurer suppliers. The technology to do this is
available today. It is the dedication that is lacking. Insurers often say they
have built real-time upload integration and only 5% of brokers are using this.
Sadly, this is true. We ask brokers why they are not using this tool and the
reply is: we will use it when we have the real time download capability as
well. We are caught up in the classic “chicken and egg” problem.
If
brokers and insurers come together in a true technology partnership, then the
technology is available to support all of these endeavors. The eDocs solution
is living proof of what can be done in less than 12 months.
New
generations are wired differently and communication makes for a fast-paced,
multi-tasking environment. In this environment, answers and solutions need to
be available in real time and they do not necessarily have to be provided by
humans. This is possibly the most compelling reason for all stakeholders in
this distribution network to act now. It is hard to make a financial business
case to convince everyone to jump in and do their part.
However,
time is of the essence. Consumers will decide our fate and one day, the federal
and provincial regulatory bodies will not be as protective of our distribution
network. So it bears repeating: time is of the essence.
