Use What You Have.

Pat Durepos
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.