Letters (May 01, 2001)

Dear Editor,

I read with interest your article on e-insurance in the March edition of Canadian Underwriter.

Canada Life is the majority owner of Kanetix, with remaining ownership held by its employees. The Kanetix website provides information on Canada Life’s ownership which is much more transparent than current market practice in this area. For example, some brokerages which consistently emphasize their “independence” to consumers are in fact controlled or have significant ownership by licensed p&c insurers. Typically there is no public disclosure whatsoever of these ownership relationships, and a consumer who buys his/her insurance through a broker would not know that the broker may be owned by the insurer who issued the policy.

Over the past twelve months Kanetix has been in contact with all of the provincial regulators in Canada to explain their organization and how they operate in the insurance marketplace. The Kanetix facility enables consumers to make intelligent choices about their insurance needs, and then Kanetix refers them to a licensed broker or to a direct writer if they want to buy. The sales and purchase of insurance is carried out within existing distribution systems which are licensed by the provinces. Kanetix is doing business in all provinces, except Saskatchewan, and hopes to get approval from that province in the near future.

Kanetix has no desire to avoid regulation, and have told regulators that they would like to play a role in working with them to develop appropriate regimes for online insurance distribution.

David Newton

Vice-president, direct distribution

The Canada Life Assurance Company

Dear Editor,

Thank you for your insight into the latest CSIO initiative to solve the insurance industry’s ever perplexing problem of connectivity between brokers and insurers. I couldn’t agree with you more.

Your comments are music to my ears, but unless anyone is listening that can get it into the heads of those carriers and industry gurus that make these decisions, other than CSIO, who I consider to be more part of the problem rather than the solution, then I think, as do you, that this will be nothing more than another dead-end, band-aid solution.

You are quite right in saying that the early 1980s technology is awkward and restrictive with these data intensive fields. It is an understatement to say the least. Take it from me as a broker. We have 4 carriers whom we deal with daily for property, casualty products. We have 3 of the 4 on a download link, 2 of the 4 on a two-way link (up/down) and the lone wolf not being able to offer us anything by way of EDI, although in retrospect they are probably the smartest of all. To try and keep track of all the peculiarities of each is a nightmare, not to mention that product specific coverages (i.e. package type endorsements) are in some cases not even recognized by the broker management systems nor follow consistently from one carrier to another. To have to try 6 times to upload a new application for the sake of a syntax error is ridiculous. Not to mention the turnaround times.

Example: upload new business Monday 9 a.m. Carrier retrieves mail from CSIONet on Monday 1 p.m. Error notice returned to broker. Broker retrieves daily download Tuesday 9:00 a.m. Error message – Rejected. (Dark Data In Error!! Cov?). What the damn does this mean? It is now Tuesday at 10:00 a.m. and this is only the first attempt. You get the picture? Well imagine this 5 more times before you finally give up and send a paper app.

It is a joke as far as I’m concerned for CSIO to award a contract to the same service provider whose platform we now use to entertain the drivel and antiquated bumblings of the case in point above. Why are both the insurers and CSIO trying to reinvent the wheel? There are more than enough vendors whose existing Internet solutions, with some modifications specific to our industry could handle anything that may be required.

Get with the program people, before you end up crucifying all of us for the sake of your own self-serving attitudes and interests.

Thanks,

Kerry White

Broker