Making the Connection

Chasing the “Utopia” of a common, industry-wide technology solution for broker-carrier connectivity, tips for communicating with Generation Y consumers and advice on how to find good producers all took centre stage at the 91st Annual Convention of the Insurance Brokers Association of Ontario (IBAO) on Oct. 21.

CEO Panel: Broker-Carrier Connectivity

Brokers should not hold their breath waiting for a common, industry-wide technology solution to help resolve the ongoing conundrum of broker-carrier connectivity, a panel of insurance company CEOs suggested at the convention.

Brokers have long called for some form of standardized, industry-wide technology solution that would allow brokers to connect to all of their insurance company markets through a single interface and within their broker management systems (BMS).

For the past several years, brokers have been critical of insurers for adopting individual “portal” technology solutions that allow brokers to connect with individual carriers in real-time, but complicate the broker’s workflow since brokers have to deal with various different company technologies and passwords.

However, when asked whether a common, industry-wide tool would be preferable to individual portal solutions, insurance company CEOs expressed skepticism about the realization of such a project.

George Cooke, president and CEO of The Dominion, said insurers and brokers all want a tool that makes carriers’ interactions with the broker channel more efficient. But he expressed reservations about undertaking an industry-wide approach because of the failure of such projects in the past, including SYNCRON and the CSIO Portal (the latter of which cost millions of dollars in development). “Any time you try to work on these industry-wide initiatives, they fail miserably,” Cooke said.

Alister Campbell, president and CEO of Zurich Canada, likened the search for an industry-wide solution to the ongoing quest by physicists for a theory that would unite Einstein’s general theory of relativity with the seemingly mutually exclusive principles of quantum mechanics.

“The constant aspiration to get to a simple system is like physicists trying to get their ‘unified field’ theory working out,” Campbell said. “It’s likely to happen some day, but it’s not likely to happen in our lifetime.”

In the meantime, Campbell said, the industry has taken a step forward with the Centre for the Study of Insurance Operation (CSIO)’s creation of XML standards. The project facilitates a standard data exchange between brokers and carriers through the broker BMS.

Maurice Tulloch, president and CEO of Aviva Canada, agreed chasing a single tool is somewhat like chasing after a “utopia.” In the meantime, he said, the industry has taken some “good interim steps.”

For example, Tulloch cited the ongoing progress of the data exchange project launched by the Insurance Brokers Association of Canada (IBAC). IBAC is currently working with insurers and vendors to create a basic framework for data exchanges between brokers and insurance companies through the broker BMS.

Like many other panelists, Jean-Francois Blais, president of Intact Insurance, said the fact that brokers and insurers have different technological systems and needs necessarily slows down the development of a common solution.

“Obviously, when we build internally, it goes faster,” he said. “When we try to build a common solution, and bridging it with all of the members out there, we need their support and we need to synchronize all of it and it’s more time-consuming.”

One CEO observed that when the CSIO Portal project stopped in December 2005, the failure actually expedited the development and creation of portal solutions between brokers and individual carriers.

Karen Gavan, president and CEO of The Economical Insurance Group, cautioned that if the success of an industry-wide tech solution means companies must all follow the same underwriting rules, the differentiation between property and casualty companies would disappear.

“The key differentiation between our products [in the P&C industry] is the product design, the underwriting rules,” she said. “And based on that level of complexity, you are trying to say [by creating a common tool], ‘Make everyone the same.’

“But we might as well all give our business to the direct writers now if we don’t want to differentiate on that basis.”

Texting Generation Y Consumers

Ontario brokers need to start communicating with Generation Y consumers using the means with which they prefer to communicate – text primarily, then email.

Otherwise, they risk losing out on communicating with a large chunk of the province’s consumer demographic.

Jason Ryan Dorsey of the Centre for Generational Kinetics issued the clarion call during his keynote address at the IBAO convention. He defined Generation Y consumers as people in the age category of 16-34.

Even though slightly more than two-thirds (67%) of Ontario’s home and auto insurance is sold through the broker channel, only 19% of Generation Y consumers – representing almost one-third (32%) of all of the province’s consumers – buys home and auto insurance through a broker, Dorsey said.

To change these statistics, brokers need to start communicating with Gen Y consumers using the methods with which they prefer to communicate. “The most important form of communication?” Dorsey said. “Text.”

Second is email, although Dorsey qualified that email communication is generally more effective the closer it comes to replicating focused, quick text messages.

“Gen Y only reads the subject line of an email,” Dorsey said. “The subject line does not get us [Gen Ys] to open the actual email. It’s not worth sending the email if the subject line is no good or is unfocused.”

In their communications, Generation Y consumers are generally looking for three things, Dorsey said. Video clips, pictures and bullet points.

Poaching Producers From Target Markets

Brokers looking to acquire good producers should consider poaching association executives from the brokerage’s target markets.

Al Diamond, president of Agency Consulting Group, offered the tip in his seminar entitled Paying for Productivity-Acquiring, Compensating and Managing Producers in the 21st Century and Incentive Compensation for Brokerages.

While a majority of the seminar dealt with growth-focused compensation methods for producers and non-producers alike, Diamond’s presentation contained a few tips for brokerages looking for new producers. One was to find well-connected experts in the brokerage’s target market.

“Association execs from our target markets are prime candidates,” said Diamond. “They hate where they are. They are under a great deal of stress, and they are looking for some place where they can use the skills or relationships that they have.

“So if you insure in construction, and there is a construction trade association,” approach an executive on the association, Diamond suggested. “They are respected, and they know everybody [in that trade].”

Diamond added that people who aren’t from the insurance industry have the potential to be good producers. “We can train insurance,” he said. “We can’t train sales.”