Standardizing Diversity with Flair

The paradox for Canadian insurance brokers today is that their greatest strength, diversity, is also their greatest weakness. This is particularly true in commercial lines.

Thousands of brokers of all sizes service the risk and insurance protection needs of small, medium and large businesses across the country. Whether a niche player in agribusiness, a well-established intermediary in the manufacturing industry or a main street broker serving local companies, this diversity of representation fits corporate Canada well.

It also has a downside: brokers have unique ways of doing business that do not lend themselves to standardization. Collection of information, processing of commercial insurance and communication with underwriters often suffers from duplicate data entry, service delays and lengthy turnaround.

The trick in any solution to this problem is to recognize the unique nature of brokerage operations across Canada while at the same time allowing them to benefit from improved workflow processes, standardized data collection and seamless exchange with insurance companies. That is no small feat, but more brokers are realizing the advantage of moving to a Commercial Management System (CMS) as a crucial supplement to their Broker Management System.

CASE STUDIES: MOVING TO A CMS

Cooke Insurance Agency

The reasons for moving to a CMS are as varied as the brokerages themselves. For instance, Cooke Insurance Agency Ltd., with six locations in P.E.I., New Brunswick and Nova Scotia, was keen to grow its commercial lines business aggressively earlier this decade. In the past, it had been a 75% personal lines brokerage; it knew it faced a tough uphill battle to gain market share.

“We made a concerted effort on the commercial side to get a more balanced approach,” says Jeff Cooke, president of Cooke Insurance Agency. “It has been a successful move and our CMS has been an important part of that.”

In fact, Cooke Insurance Agency has now bumped up its commercial premiums to 48% of total volume. In doing so, it focused on construction, manufacturing and importing/exporting, as well as some specialty business programs ranging from the shellfish industry to seasonal cottages to hockey and skating arenas.

Cooke says his brokerage could not have achieved these results by resorting to old methods of doing business. “There was no consistency between our documents, proposals, submissions and client communications,” he says. “That is always one of the biggest issues for brokers in commercial lines.”

When Cooke Insurance Agency switched over to a full CMS in 2000, it noticed one immediate benefit: its commercial submissions went to the top of the underwriting pile. “Underwriters have only so much time to go through the hundreds of submissions they receive,” Cooke says. “So they look for the applications that are most complete and easy to use, not those submitted on the back of a napkin. Underwriters know that with our submissions, all the information they need is right there. We get our quotes faster than other brokers, and we write more business.”

For Cooke, the CMS is more than just a submission tool, but a complete method of handling commercial business. “It is a full and complete commercial management system for all our policies,” he notes. “We use it right from submission to binding to service to renewal. It allows us to be quick and nimble in the marketplace.”

Saunders Insurance Ltd.

Go west about 5,000 kilometers and you will find the small-town of Taber, Alberta. Here, Saunders Insurance Ltd. has a solid reputation of serving the local community for more than 45 years. Its 60% commercial representation of total premium volume shows also that it has a long history of meeting the needs of regional businesses (not surprisingly in small oil sands and agriculture).

However, it too realized the drawbacks of traditional technology and workflow when it came to processing commercial lines insurance. President Mike Saunders says he was looking for a better way to market, bind and service business accounts. He found that solution in a CMS two years ago.

“It paid off very quickly in terms of efficiencies,” he notes. “One of the main benefits is the ability to see everything on screen without having to drag out customer documents. We never have customer files on the desks here: we scan everything. When we make changes or endorsements, we can email it directly to underwriters at the click of a button. We are definitely well along the path to the paperless office.”

Saunders says the main benefit of his brokerage’s CMS may just be better service to his clients. “What I like about it best is making a presentation to a customer,” he says. “It helps sell it because it is so professionally done and is in a nice, easy-to-read format for the customer. Our CMS has been very helpful in marketing in both soft or hard market conditions.”

REAL-TIME DATA EXCHANGE

Many of these brokerages have their commercial houses in order and are thus benefiting from the efficiency, productivity and improved service levels of a comprehensive CMS. Even so, another aspect missing in the past is now emerging as a reality of business insurance: real-time data exchange with insurance companies.

With the CSIO XML standard for commercial lines now firmly in place, there is an unprecedented opportunity for brokers and insurers to share data. But there are some important “ifs.” First, brokers have to collect information in a format that allows for seamless data exchange. A proper CMS must have this important feature in place. Secondly, the insurance company has to have the right technology and processes in place to receive the standardized data and communicate back to brokers.

These necessary preconditions may lead to such things as certified data exchange programs. These certification processes recognize insurers that have worked towards the accurate exchange of commercial lines information. Such data exchange programs typically address three key areas: standards, verification and security. Policy Works, for example, has a Certified Data-Exchange Partner Program, in which partners must use CSIO XML standards to exchange data with Policy Works brokers as a starting point. To date, ING Insurance has been certified as a data-exchange partner.

“Brokers are telling us that a big problem they have is duplicate data entry to multiple company Internet-based systems,” says Peter Weightman, senior vice president of commercial lines at ING Insurance Company. “The advantage of data exchange is that it minimizes this problem for brokers who have a CMS integrated with a company system. We want to tell brokers we have a solution for these data entry problems.”

ING’s solution can be linked via the same CMS that many of the brokers mentioned above regularly use. And these brokers are taking advantage of it. “We use this service with ING Canada,” Mike Saunders says. “We have found it to be excellent because it populates the majority of the data fields, so you are only entering the data once. It would be great if other companies came on board.”

“The direction our CMS provider has taken with companies such as ING, in terms of programs for small commercial, is the proper way to go, I think,” says Jeff Cooke. “When we make submissions, the potential is there to automatically populate all these insurer small business systems. That will also make us more efficient.”

Can commercial brokers in Canada have their cake and eat it too? Can they pursue their own specialized business strategies, niche segments and client relationships, while at the same time standardizing their data and workflow through a comprehensive CMS? Can they collect standardized information and partner with companies to facilitate seamless data exchange to improve efficiency and reduce multiple-entry?

Based on a sampling of brokers who have already done it, the answer is that the technology is fully available. All that’s needed is a cultural pus h.