Brokering the Internet

(as published in Alberta Broker, Oct/Nov 2001 issue)

By Doug Grant CIP, Principal,

Much thought has been given to how the P&C Insurance
broker channel will leverage the Internet to its advantage. There have been many
initiatives. An August seminar “Brokering the Internet”
reviewed the current status, from several perspectives. Finally it appears
that a broadly useful set of functions are arriving and the early promises can be realized.

Grace Webster, Vice-President Business Solutions, indicated
that Royal & SunAlliance is now serving online through the web some 3500 brokerage
users. Broker performance information with very detailed drill-down information, and
client inquiry, inclduing payment, have been available for some time. When broker-access
functions were first delivered, R&SA discovered that brokers had better access than
some internal users, so they now use the same technology internally!! And a pleasant
surprise when R&SA found that payment inquiry delivered more benefit than expected –
appears more staff time was spent providing this customer service information to brokers
than had been recognized.

R&SA has recently implemented homeowners endorsement
processing through the web in the Maritimes, with Western Region to follow. R&SA will
be testing the CSIO Insurance Portal soon. They will continue to add more functions to
their broker web interface to further enhance the channel service capabilities. Thus we
see one essential prerequisite to the use of the Internet in the broker channel growing in
reach (number of users) and breadth (functions).

Al Chamney and Rick Dresher from CMD Insurance Services
Inc. described how they have been using the Internet since 1996. Internet access has
evolved from Principals-only with dial-up to today’s all inclusive e-mail and universal
high speed access. Their Web site has evolved from simple brochureware to online quotes
and other customer service functions. From a pilot for payment and claims inquiry, they
now do online quoting and policy issuance with three carriers. Staff has instant access to
MVR’s and prior claims, and uses the web for research and marketing. A similar experience
to R&SA – payment inquiry provided greater benefit than anticipated. Tips for general
Internet implementation:

  • make procedures as easy as possible

  • provide universal high speed access

  • make sure staff uses the system – everyone resists change

  • set security and usage policies

As an early adopter, CMD Insurance is deriving benefit from
the Internet. As it takes two to tango, we now have two points in the distribution supply
chain making progress and leveraging the new communications tools between them.

Klaas Westera CSIO provided insight into how the CSIO
Insurance Portal will help address some usability issues – CMD finds dealing with three
companies like having three company terminals. The portal will provide single sign-on and
some functions with CSIO common screen layouts across carriers. Companies who implement
CSIO standard web screens developed by CSIO will enhance broker usability and reduce
training etc. The comparative rating environment within the portal should help address
costs on all sides, and then provides a new function for guaranteed prices, for auto and
homeowners. The portal development is on schedule and within budget. Testing with two
companies started in early September, with more companies and functions to come by the
time production is reached, in early 2002. In a many-to-many brokers to companies
scenario, the CSIO portal represents much potential. Relative to the broker-company
linkage noted above, it brings at the beginning ease of use (common screens, single
sign-on), potentially reduced costs (comparative rating), and new function (guaranteed
quotes) – and this is just the starter.

Gilles Proulx from IAO discussed how processing of risk
assessment information is being enhanced. Most IAO services now web-enabled. Packages of
information can be retrieved using a single request. One insurer is now testing the next
evolution, IAO’s API (a technical term), in which a numeric risk assessment score, based
on a variety of data sources, can be requested by an application program.
When the score is returned in real-time, an automated underwriting function could then be
performed. Clear cases can be passed right through to issue. Underwriting can now generate
a guaranteed rate, immediately, without the usual reservation that risk information will
be verified later. In our broker-company examples above, this capability will nicely
complement the CSIO portal quoting function. When a particular comparative quote is
selected and a full guaranteed price requested from the market, the company system could
now verify risk as part of the process. This particular real-time transaction example uses
three links in the supply-distribution chain – broker to portal to company to risk
information provider, all integrated and all immediate.

Rob Gow from described the claim function
offered by their Claims hub. Like the CSIO portal, provides access to
current information and status for each participant. The hub also applies rules when
changes to a claim are entered. Such services could have a similar productivity impact, in
Claims, to that noted above for billing inquiry.

Chris Venn from Keal Technology described a number of ways
that Internet access has helped them provide better service to brokers, with high speed
Internet access being necessary for some things. Keal has had many requests from brokers
for customer service functions through the broker’s Web site using the Internet. If this
is any indication, insureds in Canada will have a lot more insurance Internet capability
in the not-so-distant future. One day the prospect or client may be able to enter data
through the brokerage into the on-line environment noted above.

For the seminar, six or more specialty markets were
approached. All felt that their current Internet function was too basic to discuss, but every
one of these companies expects to deliver
more applications this year, and again next year.

A year or two ago, the Internet was a major topic in
boardrooms throughout the industry. Obviously most decided to invest. In my opinion, we
are just at the cusp of the transition of the Internet, in the Canadian P&C Industry,
from one-off implementations to integrated essential infrastructure for many applications.
We are already seeing some benefit and much more will follow.

The early promise of the web – build a Web site, they will
come – is long gone. But the promise of greater efficiencies, enhanced effectiveness,
improved customer service, maybe even customer self-service, are in the offing. Are you ready?

(Note: all announcements and articles referenced, and more,
can be see at Canada’s leading Internet Resource Centre