- Where Insurance & Technology Meet

A Pivot Point for Broker Connectivity in Canada??

Is SEMCI (Single-Entry, Multi-Company Interface) dead in Canada?  If so, will it rise Phoenix-like in a new, improved form?

At the recent Insurance Brokers Association of Ontario (IBAO) Conference, a panel of insurance company CEOs responded to questions on a variety of topics impacting brokers.  High on the list was whether the independent distributor system  could adopt a standardized technology tool and a unified approach to ease workload, and improve brokers’ market positioning.

The answer was a resounding “No”.  As reported in CITopBroker, George Cooke, CEO of The Dominion, referred to previous efforts as “miserable failures.”

Karen Gavan, CEO of The Economical, felt that technology would be key to improving broker efficiency, “but I don’t think it will be a standardized tool that all companies will use precisely the same.”  Alistair Campbell, CEO of Zurich Canada compared the search for a single standardized system of broker connectivity to the search by physicists for a unified theory, “It’s likely to happen someday, but it’s unlikely to happen in our lifetime.”

Doesn’t sound like there is much interest on the part of some leading insurers to invest heavily in an industry-wide SEMCI solution.

However, panelists suggested that brokers and carriers could, and should, use all means, including technology, to improve process and practice to shore up market share.  For example, Maurice Tulloch, CEO of Aviva Canada suggested that brokers needed to look to provide service beyond normal business hours and reach out to touch customers more often that at renewal.

As significantly, IBAO leadership acknowledge that brokers’ market share is under attack by banks and direct marketers, and brokers – individually and collectively – need to take positive action to stem the tide.

We have commented in past on differences in approach between US and Canada with respect to connectivity strategies.  The US tends to be more open to alternatives to improving efficiencies, while Canada has tended to seek a singular path.   Part of the difference, we believe, stems from the fact that US agents were faced with significant loss of market share in the 1970s and 1980s, with the arrival of large, captive-agent companies such as State Farm and had to seek compromise with the independent agent carriers sooner.

Perhaps this is the time when Canadian practitioners will accept the fact that both brokers and carriers have always taken, and will always take, different approaches to find improvements in service delivery, and  these difference are part and parcel of the free insurance market.  Brokers and carriers take decisions on which trading partners they will support, based on their perceptions of the best product, most promising target markets, geography and, in part, the ‘best’ service model.

In this free market, like minds will meet, and technologies will evolve to meet demand.  Many of these will improve workflows for both brokers and carriers.  There will be standardized approaches, based on commonly accepted methods and systems, not based on prescription,  to support the principles of single entry interface among trading partners.  Some of these have, and will, include standardized tools and processes.

We will comment further on possible scenarios.  Meantime, we would look forward to your thoughts.