Reaching Maturity

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 nearly half of its agent and broker respondents said learning and using various company proprietary systems was their greatest challenge in supporting automation. In addition, 47% responded “duplicate data entry” when asked to identify the major automation “time-waster” in doing business. No similar survey exists in Canada, but plenty of anecdotal information suggests brokers here are equally frustrated with proprietary Web portals, data reentry and input errors.

All of that is set to change. Today, tangible signs exist 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.

Brokers’ ability to upload commercial data into an insurance company Webbased solution is a reality right now for several insurers; 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.

UPLOAD/DOWNLOAD

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 Webbased application and, eventually, download back to broker systems. ING Canada, Gore Mutual Insurance Company, Aviva Canada, and Royal & SunAlliance Canada have entered into agreements with Policy Works to exchange commercial lines data and develop an efficient integration solution.

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 the central goal of data exchange is to make it easier for brokers to do business with them. “We recognized that many brokers use technology to manage their commercial lines business,” says Peter Weightman, senior vice president of commercial lines at ING Canada. “The logical step was to facilitate a data exchange between our technology and a broker’s technology. We want to make it easier for brokers to do business with ING.”

Kevin McNeil, president and CEO of Gore Mutual, agreed. “Simply put, our broker partners told us this was important to them and we listen very carefully to their feedback,” he said. “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 of commercial lines at 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, Royal & SunAlliance is able to spend more time with its customers, get a better understanding of its customers’ businesses and deliver a more personal service that customers value,” says Shawn DeSantis, senior vice president of commercial and personal insurance at Royal & Sun Alliance. “There are also cost savings for quoting and binding small commercial business.”

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 download automatically 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.

INDUSTRY STANDARDS

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, notes DeSantis. And the interfaces can evolve in unison.

“There are a couple of distinct differences between personal and commercial lines standards,” DeSantis says. “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.”

Aviva’s Regner Dykeman says 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,” says Dykeman. “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.”

VENDORS SUPPORTING STANDARDS

The vendors’ role should be one of supporting standards and openness instead of offering yet more proprietary solutions, DeSantis says. “We believe it’s critical for software vendors and insurers to work closely together to bring efficiencies to brokers. “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.”

Given that the upload of standards-based data from brokers to insurance company Web-based applications is already a reality, what does the future hold 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, including general inquiry, billing and endorsements, say s Weightman. “We see commercial data exchange continuing to evolve and grow over the next few years,” he says. “We expect our business strategies — namely, expanding the current ING capabilities — will reflect this fact.”

Regner Dykeman says that with the success of Fastrax’s quote and bind functionality, there is no reason the functionality cannot be expanded to include renewal and endorsement activity for commercial lines business in the future. “Our brokers are telling us that this is what they want and we’re listening,” she says.

DeSantis anticipates 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. “This could mean more complexity of product options, or added transactions,” he says.