Archive

For December, 2011

Dec 22

2011: Goodbye, And Thanks For All The Clicks!

By Insurance-Canada.ca BlogEditorNo Comments

2011:  It’s been quite a year for insurance, technology, people, and this blog, The Intersection.

We’ve had the opportunity to explore different technologies in various parts of the insurance environment.  We’re coming to the conclusion that 2011 will be seen as the year that many organizations made investments in a wide range of new technologies and strategies which will come together and become solid foundations for future success.

However, among all the disparate elements, we found one thing in common: People continue to be the most important element in business, technology, and process (as it should be).

And we thank you for finding us.  We named this ‘The Intersection’ because we wanted it to be a place where insurance and technology crossed.  It was a little lonely at first, but then you started to show up, and we started to get feedback  And we were encouraged. And our traffic increased.

We’re going to be taking a break during this holiday period, and will be back the first week of 2012.  We’ll continue focusing on key topics such as broker connectivity, social media, telematics, and analytics.  We’ll also be featuring previews and background information for presentations coming up at the 10th annual Insurance-Canada Technology Conference in March.

And we’ll look forward to seeing you.  Meantime, we want to thank you for your support of Insurance-Canada and this blog and wish you joy and peace for the holidays, and all the best for 2012.

 

 

 

 

Dec 19

Survey Says: A Sharp Telematics Arrow Targets Drivers

By Insurance-Canada.ca BlogEditorNo Comments

Sometimes the results of a survey will disclose more about the organization conducting the survey than about the individuals responding to the survey.  This seems to be the case with a survey sponsored by Progressive Insurance on driving habits and willingness to use telematic devices to support pay-as-you-drive insurance plans.

This was not a low budget, web based survey.  It was  a telephone survey of 1,003  Americans conducted by Harris Interactive, a well regarded professional polling and analytic firm.

The purpose of the survey, according to the release by Progressive,  was “to estimate the potential number of people who could save on car insurance.”  The headline finding was “More than 70 million drivers in the U.S. could qualify for significant car insurance savings.”  How?  Progressive advises, “by taking advantage of usage-based insurance programs like Snapshot from Progressive. Snapshot rewards safe drivers with a discount of up to 30 percent on car insurance.”

Clearly, the survey was designed to support a particular result  But beneath the surface, there are some interesting aspects. The survey found:

  • 50 percent of respondents say they drive less than 12,000 miles per year, even lower than the national average of 13,476 miles per year (source: U.S. Department of Transportation);
  • 84 percent of drivers define themselves as cautious (49 percent) or defensive (39 percent); and
  • 88 percent are never or rarely on the road between the hours of midnight to 4 a.m. – the most dangerous hours to drive as defined by Progressive.

When all of the data are added together, Progressive advises, “39 percent of all U.S. drivers – or more than 70 million drivers – may be eligible to receive a discount on their car insurance.”

The real result:  These are the drivers that are in the cross-hairs of Progressive’s marketing.  And there are plenty of incentives:

“Good drivers should pay less for their car insurance – that’s something nearly everybody can agree on,” said Richard Hutchinson, general manager of usage-based insurance at Progressive. “Our data shows that more than 70 percent of all Snapshot drivers now enjoy extra savings, which is one reason why our program continues to grow so quickly.”

There are slight benefits to others, including insurers who are contemplating the leap into Pay-As-You-Drive schemes.  We have posted previously on the linkages between marketing, underwriting, and telematics.  The Progressive approach adds one more dimension:  market opinion research.   The ability to aggregate opinion data with behavioural data proves a powerful combination when it comes to advertising, further reinforcing a virtuous circle.

A circle meant to keep their good customers in, and keep competitors out.

 

Dec 17

Portals or Real Time: What Do Brokers/Agents Prefer?

By Insurance-Canada.ca BlogEditorNo Comments

What do brokers/agents prefer when it comes to electronic linkage with carriers?  Two recent reports give what appeared to be diametrically opposing view points based on survey data, and raised the volume of the debate.  We’d like to know what you think.

ACT, the technology arm of the Independent Insurance Agents and Brokers of America (IIABA), published findings of a survey of 3,100 agencies which concludes that its 5 year campaign to promote ‘Real Time’ connectivity between agents and carriers had been an unequivocal success. The IIABA defines  ‘Real Time’ as:

… the ability for you to click on a button from a client file in your agency management system or comparative rater for immediate access to carrier information on that client. The transaction may be a quote, billing inquiry, claim inquiry/loss runs, policy view, endorsements or a request for information.  This approach provides a single workflow for servicing or quoting with multiple carriers.

Selected results of the IIABA survey support the penetration and efficacy of the Real Time approach:

  • 63 percent of agency management system users employ real-time rating on comparative raters and management systems to access multiple carriers at once;
  • use of real-time rating tools for personal lines saves agencies an estimated 68 minutes per employee per day;
  • 62 percent of those using real-time rating also use real-time inquiry and service transactions through management systems, most often for billing, policy and claims inquiries, but also for endorsement processing;
  • Real-time inquiry and servicing are saving 50 minutes daily for those employees using the functionality.

Agents involved with ACT greeted the report with enthusiasm.  Stu Durland, co-chair of the ACT campaign and co-owner and vice president of operations for Seely & Durland, Inc., a Warwick,N.Y. agency, was quoted in PropertyCasualty360′s coverage of the report’s release:  “It’s encouraging to see a continued growth in the use of real time.  Even more positive is the significant impact real time has on agency and brokerage operations.”

However, a recently released report from Novarica provides a different view based on a July survey of 541 agencies.  In a review of that report,  Insurance & Technology’s Anthony O’Donnell wrote: “Novarica found that 42 percent of agents preferred a carrier’s portal, versus 26 percent preferring their own agency management system.”

O’Donnell noted that employees in different roles had different opinions.  Agency principals seemed to prefer using the agency management system, while CSRs preferred using the carrier portals.  Producers in the agency were willing to work with either, and had preference based on ease of use.

Interestingly, the following day, Insurance&Technology published a follow up piece by Nathan Golia, titled “Do Agents Really Prefer Portals?”  Golia cites conversations with agents who strongly endorse the IIABA approach.  He also notes a conversation with Doug Johnston, VP of partner relations & product innovation for Applied Systems, and strong advocate for Real Time, who references the Novarica report itself to provide explanation.  Johnston says:

Given a choice between a really bad interface between the agency management system and the insurer, or the carrier portal, I might say that [I prefer the portal].  But if I had a preference between a good AMS interface and the portal, things would be different.

Golia concludes that at the end of the day, the true agent preferences will prevail. Agents will vote with their choice of markets to support.

One additional thing seems clear, this conversation is far from over.  We’d welcome your thoughts.  Hit the comment button and let us know where you stand and why.

Dec 12

Inside the Jury Room: High Bar, Hard Choices

By Insurance-Canada.ca BlogEditorNo Comments

The Insurance-Canada.ca Technology Awards (ICTA) jury has selected 9 finalists for the three ICTAs which will be presented in March.  We were privileged to be a fly on the wall of the virtual jury room at its recent meeting where the finalists were discussed prior to a secret ballot.  We left with two overriding impressions:  The high quality of nominations reflecting the growing importance of technology to the successful conduct of insurance business in Canada, and the unique ability of a group of smart people to make difficult choices in a compressed time frame.

We’ll look at the jury’s group process first.

The jury had a tough task for a two hour GoToMeeting call.  Insurance-Canada.ca received 50 nominations for what will be three awards,  one in each of the categories of distributor, insurer, and supplier.  The task of the jury in its first call was to debate qualities of all the nominations to allow a considered vote for three finalists for each of the categories.  Information had been distributed over the previous week in the form of Google Docs, including the nomination forms and supporting material.

The jury had done their homework.  The jury started back at first principles, carefully reviewing the criteria for the awards, viz.: “The primary criterion for all awards is the positive impact that a specific technology or application of technology has had on business.”  From this, the jury quickly determined that great technology was good, that the ‘degree of difficulty’ in implementing the right solution was important, but the overarching consideration was result of the implementation of the technology on the business of insurance.

Which leads to the quality of the award nominations.

Each of the nominations evidenced some combination of leading edge technology, innovative uses of technology, process change, diligent work, intelligent linkages, creative partnerships, and more.  Some of the efforts would be effective case studies for organizations implementing large scale systems.  In short, there was no shortage of quality, depth, and breadth in the nomination pool.

And that meant that being effective was not going to be enough; quality/quantity of results was not going to be enough; modern technology, adherence to standards, and sophisticated implementations were, as one juror put it, ‘table stakes’.  What was required was a leap over a very high bar, a unique combination that evidenced positive, transformative impact for the organization, its customers, its business partners, or an industry segment.

And, based on that, the jurors took the information away and cast their votes.  The resulting finalists can be found at the 2012 Finalists Page.  The next step will be a meeting in the new year to review the short list and determine the final awardees.  The awards will be announced and presented at the ICTA Awards lunch, during the 2012 Insurance-Canada.ca Technology Conference, March 5, 2012, at the Sheraton Centre in Toronto.

The takeaways from this process so far are fascinating, and heartening.  First, we have some really smart and wise people on the jury who can make tough decisions in compressed time frames (we’ll introduce the jurors in the new year).  And, significantly for all of us, the bar for insurance technology implementation in Canada is high.  And that benefits us all.

 

 

Dec 11

The Future of Independent Brokers: Serendipity and Social Media

By Insurance-Canada.ca BlogEditorNo Comments

When it comes down to tricky things, such as the future of the independent insurance distribution system, serendipity is an occasional, but wonderful friend.

A few days ago, Greg Purdy, managing partner of Pathway Partners Ltd., posed a provocative question on the LinkedIn group he manages, Canadian Insurance Broker Strategy Group: “Consumer choice – currently it looks like, buy over the phone, in person, or digital. Direct writers are harnessing digital, where is the broker channel going with this?”

Before we could respond, serendipity took hold and led us to an article with a cheeky title:

If You Work in Insurance, This Should Be the Only Article You Read on the Future of Social Media

This article, authored by Ryan Hanley, a 30 year old independent agent in New York, answers Greg’s question not only with content, but with context.

Concerning the immediate present and future, Hanley fundamentally disagrees with the notion that insurance is a commodity that consumers generally, and Millennials specifically,  will buy on price alone.  Further, he believes that technology will allow him to destroy this notion.

With regard to the belief that technology has rendered the independent agent obsolete in the mind of younger consumers, Hanley is blunt:

“The problem is not that Millennials do not relate to Independent Agents… The real issue is that Independent Agents do not relate to Millennials.  Too many of us are sitting in our agencies ignoring the Internet, marketing as if it’s 1979, and selling with the same tired pitch we’ve always used….

“The reason your independent agency is struggling to attract Millennials is because you are either unaware, unable or unwilling to provide the type of relationship that Millennials seek.  That my friend, is a YOU problem, (an US problem really), not a Millennials problem.”

Hanley posits that competing with direct marketers on the basis of price alone (using on-line quotation tools) is a fool’s game.  Independent agents need to compete on the basis of a single statement:  “WE CARE!”  And this caring needs to be established before the sale is made.  And this is where Social Media comes in.

Hanley goes on to recommend approaches and tools (including several that he has put into the public domain) to help. However, the most important point is that Hanley actually believes in his solution and is not afraid to put it into action.  What some of us old school cats (Hanley’s words) would call, “putting your money where your mouth is.”

Hanley clearly has the passion and the energy (independent agent by day, social media evangelist by night) to answer Greg’s question with both words and actions. We recently posted on other agents such as Angelyn Truetel, who are aggressively using social media for marketing and are openly sharing results with all who will listen.  Also, the use of social media in insurance is a key theme at the 2012 Insurance-Canada.ca Technology Conference.

For those of us who believe in the independent system, we can only hope that Ryan and Angelyn have lots of fellow travelers.

 

Dec 05

Are Your Employees Bringing Their Own Networks to Work?

By Insurance-Canada.ca BlogEditorNo Comments

It seems that Bring Your Own Technology may not be restricted to iPads and Android Phones alone.  There is increasing evidence that employees are bringing their own social networks in for both external and internal collaboration.

Debra Donston-Miller writing in InformationWeek, summarizes the current state: “Like wireless networks and smartphones before them, social networks are coming in through the back door at many companies. That is, end users are taking it upon themselves to deploy social systems like Yammer or Jive, or are turning on social features in platforms such as Salesforce.com, without explicit permission or the support of the IT department.”

This trend may be wide spread, and the risks associated with it may be larger than organizations appreciate.  The same article notes that Doug Landoll, director of risk management for IT security firm Accuvant, believes that most organizations are exposed.  More significantly, Landoll feels that an unauthorized  implementation “poses a risk that is not well understood by many organizations.”  The risks include data security and undocumented access points for individuals with malicious intent.

What is driving this?  The InformationWeek article states: “Experts agree that these networks are being set up not out of any malicious intent, but mostly by employees who see the potential of social networking within their organizations and are frustrated by not being able to tap into it.”

Interestingly, a recent survey by IBM of 4,000 IT professionals in 93 countries found that current authorized implementations of social networking by organizations are more internally focused that externally focused:

Many companies are implementing intranet-based solutions to begin testing the waters, and respondents expect these implementations to grow. The survey showed employee collaboration, efficiency in locating people and resources, and idea generation and sharing as the top three motivators for internal deployment.

If that’s true, why are unauthorized implementations proliferating?  Simply put, employees like their technologies better.  The informationWeek article quotes Joel Lundgren, senior advisor for community management strategies with IFS AB, a provider of ERP software: “They are frustrated because they cannot do their job efficiently. Your current communication and collaboration infrastructure is out of date and doesn’t compare with the experience of communicating with friends and family online.”

Of course, policies and procedures are necessary to protect security and maintain standards.  We have noted that industry associations, such as the Independent Insurance Agents and Brokers of America were developing Best Practice guidelines including sample employee use policies.   But some organizations are recognizing the limitations of control and are seeking accommodation.

Lundgren notes these organizations are beginning by identifying and meeting with people who brought in the unauthorized networks in order to “Find out firsthand what benefits they see from using the unsanctioned tool and how it improves the business.”  The ultimate goal, according to Lundgren, might be to  “make the unsanctioned sanctioned.”

 

Dec 04

High Heels, Insurance Trends, and Predictive Analytics

By Insurance-Canada.ca BlogEditorNo Comments

Can a better understanding of trends in women’s shoe heel height help predict insurance price and market direction?  Beats me, but IBM is testing the use of predictive analytics to understand trends in stilettos which might offer approaches to better understanding directions in a multitude of business, perhaps including insurance.

A recent article in IT World Canada noted that “IBM Corp. has been demonstrating a talent for using big data, specifically social media analytics, to predict trends across industries.”  One of those case studies involves predicting trends in heel height.

By analyzing large volumes of unstructured data coming from social media, specifically Facebook and Twitter,  IBM found trends that differ from the past.  Dr. Trevor Davis, a consumer products expert with IBM Global Business Services said that heel height usually increases in the case of an economic downturn. “This time (however), something different is happening. Perhaps a mood of long-term austerity is evolving among consumers sparking a desire to reduce ostentation in everyday settings,”

So what’s the link to insurance market trends?  At a recent seminar on Big Data experts noted that in a hyper-competitive market (say, insurance), the ability to discern trends and pull out relevant information from mounds of data will define winners.  A recent SAS Institute (Canada) Inc. seminar presented in Toronto, entitled: Conquer Big Data with Big Analytics, featured speakers with concrete examples.  As reported in Canadian Underwriter, Merv Adrian, a research vice president of information management at Gartner advised that the trick for companies is to identify and exploit relevant correlations between data points.  Analytics should be used to discover new insights, not simply to back up whatever is already known.  Such as the contrarian direction of consumers in respect of heel height in the current economic environment.

We have posted on the use of predictive analytics to improve automobile insurance results with Telematics data, and its potential to understsand aggregate risk exposures.  It is also clear that social media use in consumer and professional activity is increasing geometrically.

Putti2012 Insurance-Canada.ca Technology Conferenceng these trend together suggests the there may be a number of new avenues to take in searching for improved insurance profitability. Being creative and using new data in new ways may well be one of these avenues.  Analytics, and new data sources, including social media, are part of the New Landscape that we will explore at the 2012 Insurance-Canada.ca Technology Conference  in March.

Hope to see you there.

 

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