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Free Trade in Broker Connectivity: ACT in Action; ORBiT Increasing Altitude

Independent insurance agents in the US have issued a report on progress towards achieving goals in broker connectivity.  At the same time, Canadian brokers are consolidating around actions to promote their interests in connectivity.  Are these groups aligned to benefit both groups and exert maximum leverage going forward?

The ACT committee of the Independent Insurance Agents and Brokers of America (IIABA) recently completed a survey of  3,700 independent agents and brokers around issues with insurance carrier communications.  The resulting report indicates  that the vast majority – 90% – of respondents were conducting ‘download’ (carrier transmission of policy and other information to the agency) and finding savings.  In personal lines, 53% indicated savings of 1 hour or more per day as a result of download; in commercial lines, 38% found savings of one hour or more per day.  Interestingly, about one in four respondents said that they didn’t know how much time was saved.  Some of these respondents  said they had always used download, so had no basis for comparison.

The report also found that agents were finding ‘Real-Time’ (defined as ‘ the ability 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’) is gaining traction and saving time for both personal lines and commercial lines functions in agencies.  Major functions for Real-Time are rating and inquiry.  The majority of use (and benefits) are found in personal lines use, but commercial lines has a respectable presence.  Overall, where Real-Time  is used, average time savings reported is 50 minutes per staff member per day.

Looking toward the future, the survey found a number of areas that could improve Real-Time for the agents.  The highest on the list is to increase the number of carriers offering Real-Time.

Source: ACT Real-Time & Download 2011 Agency Survey

To support action planning to address these priorities,  the Real-Time Campaign (a consortium consisting of IIABA, ACORD, service and system providers, and leading carriers) developed “Best PracticeWorkflows & Implementation Strategies”  which are available at http://www.getrealtime.org/active/realtimeresources.asp.

So what does this mean for Canadian brokers, carriers, and suppliers?  As we’ve noted, leading Canadian brokers have started a group with similar goals to ACT, called ORBiT.  Great credit goes to committed brokers who have developed committees, brought in sponsors, and have contracted a part-time executive director.  There were very successful Education Days conducted last year to help recruit additional brokers, and another series is planned for this year.  At the 2012 sessions leaders from the US Real-Time movement will be present to give insight into US activities.

All good.  We only see two cautionary elements.

First:  We don’t know the specifics of the curent Canadian broker environment.  ORBiT’s work to date has been commendable, but is missing some of the context that the ACT report offers.  There is no baseline as to the current state of brokers in Canada similar to that offered by ACT.  How many brokers are using download now?  What are the major issues with its implementation?  What inquiry functions are available from which carriers, and how does this help the broker?  There also is no survey of a larger number of brokers and their need that can be used to recommend sets of activities.

It may be that Canadian brokers’ current use of technology and future needs correlate perfectly with their US Counterparts.  But somehow, we don’t see that being the case.  For example, we have several provinces that have government schemes for automobile insurance.  And we don’t know how these differences would colour the needs or priorities of brokers.

We would encourage ORBiT to take some time to construct some data – through surveys or focus groups – and use this information to construct some specific action plans in consultation with other stakeholders – suppliers and carriers.

Second, there is an awful lot to do, with relatively few resources.  Depending on the needs found in the analysis recommended, Canadian brokers might be well served to align itself with their US counterparts and find ways to reuse material developed in the Real-Time campaign.  While there is a natural tendency to emphasize our Canadian uniqueness, if there are areas of common interest with the US, we might be well served to take these as first priorities for action.  If these can generate early wins, they could establish momentum that has been lacking for the past while.

We think with alignment, Canada can benefit from the pioneering work of ACT.  We also believe that there are and will be areas where our experience can benefit our counterparts in the US.  At a minimum, together we can establish better working relationships with carriers and suppliers we have in common across the border.

 

2 Comments

Bryan Bedford

As a member of ORBiT’s Media Committee I would like to point out that ORBiT has plans to address a number (if not all) of the points you introduce above. As a new, grassroots organization, ORBiT has had to make progress where possible and with the foundation laid, can look ahead to bigger things. ORBiT will be expanding its reach to cover all of Canada and will be conducting a survey of Canadian Brokers to establish baseline data as you suggest.

We are also working much closer with our counterparts in the US and will be reusing much of the work they have already done, after first putting a Canadian viewpoint on it. One of the first key steps is to involve their members in our upcoming education days as you have noted. We have also been provided with many of their documents and are working to adapt them to the Canadian market prior to publication.

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Brian Hitchlock

If one examines the initiatives, integrations and processes already developed within Canada by CSIO, IBAC, and individual technology vendors and insurers over the past 20 years, you will find most of these things have already been accomplished. Round trip policy change was working fifteen years ago using the CSIO standards with a turnaround of as little as 48 hours. Not “real-time” but still pretty good relative to the industry norm today. Policy change upload fell to the wayside in part because certain broker systems were not capable of supporting it.

The big problem is the failure to get enough commitment to any one solution in the industry to achieve the critical mass to keep it going. Brokers are unwilling to endure the “pain of change” and those insurers that invest in solutions are too often seeing their brokers fail to utilize them.

Will adopting the “Real Time” solutions from the US solve this, or is it just a continuation of the ongoing search for a “quick fix” for a problem which will can only be solved by hard work, financial commitment and refinement of the solutions we already have?

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