7 insurers that have jumped on the D/X bandwagon

The data exchange project needs more carriers on board, says the connectivity lead for Canada’s brokers.

The Insurance Brokers Association of Canada (IBAC) announced Mar. 10, 2021, the creation of the Data Exchange Connect Alliance (DXCA). The alliance now has seven insurers: Economical, Wawanesa; SGI; Gore Mutual; The Commonwell; Aviva; and RSA.

“DX will not be successful unless we get more carriers than just that group of seven, and we do have some national players with decent market share,” Tom Reid, IBAC’s data exchange lead, said in an interview. “We need the vast majority of the market to be following suit in the not-too-distant future.”

Launched in 2018, the D/X Initiative is based on a set of principles that IBAC developed around technology integration among brokers, carriers, and other vendors. One problem IBAC is trying to solve with DX is the amount of time brokers spend typing information into two different computer systems – their own BMS and the carrier portals.

Key to D/X is a repository, or a reusable data services library (RDSL), of application programming interfaces (APIs) that transmit data between brokers, carriers, and third-party vendors.

One operating principle behind RDSL is that insurance carriers selling through brokers should share their APIs with competitors.

One purpose of the DXCA is to establish a practical process for implementation of D/X. The DXCA is not a formal association with a board of directors. Instead, it is a group of carriers with a common goal to invest in APIs.

What motivated the creation of DXCA?

The desire for more take-up of the technologies created by insurers for use in the RDSL.

“What’s happening is that Carrier X is working on a policy change, Carrier Y is working on real-time quoting, and Carrier Z is working on inquiries,” as Reid explains.

But when an individual carrier comes to market with the technology they have been preparing for the RDSL, there isn’t enough take-up, or what’s called “critical mass,” for a tech vendor to do work on their own to integrate with that particular carrier’s app. That, in turn, means there is not enough critical mass for a broker to change their process.

“Every broker has seven, eight, 10, or 15 markets. If one of your carriers changes its process, even if that process is an improvement, it is still a new process. Unless there is a critical mass that is all going in the same direction, it makes it worse for the broker,” said Reid.

So the seven DXCA members “have a common desire to make real business change happen and the only way to do that is to have enough critical mass for it to make it worthwhile for a broker/tech vendor to implement it,” said Reid.

“They recognize that five years from now, connectivity is a thing on which to collaborate, not compete.”

When he started helping IBAC with the D/X Initiative, Reid said he said spoke with pretty much every carrier partner of IBAC. “My takeaway was there are three different buckets of carriers, from a digital transformation perspective,” he said.

The first bucket includes carriers that have invested or are actively investing in broker digitization – such as the seven members of DXCA.

The second includes carriers that are going to invest, but they still have a lot of work to do on their back office digitization, or perhaps they have some other hurdle. So the carriers in the second bucket are not ready yet.

The third bucker includes carriers who choose not to invest in broker digitization.

“We are breaking ground so that second category of carriers [who still have a hurdle to get over] can join,” said Reid.

Feature image via iStock.com/TommL