- Where Insurance & Technology Meet

Are Three Legs Enough to Keep the SEMCI Stool Stable?

We recently posted on the current state of Single Entry, Multiple Company Interface (SEMCI) between independent distributors and insurance carriers.  In spite of consensus on objectives and  serious time, energy, and money spent over almost five decades, we are nowhere near a critical mass which would allow realization of the benefits promised.

In this post, we will look at what we see as a serious structural issue which we feel has been a barrier.  We believe that the major actors cannot achieve sustained success with the current, diffused organization.

(An aside: we are grateful for the feedback  we received on our first post and we ask you to continue to provide candid comment.  For this exercise to provide value, we need the wisdom of the crowd.)

The three legs of the SEMCI Stool

There are a number of organizations surrounding the agent/broker connectivity community, including standards setting bodies (ACORD, CSIO), industry associations, consulting firms, media commentators (present company included), etc.

We believe there are 3 primary stakeholders:

  • Independent agents/brokers
  • Insurers
  • Vendors of technology for the other stakeholders

These organizations spend money directly on providing and implementing solutions and have a direct, vested interest in success of the initiatives. We like to call these the legs on the SEMCI stool, as they all have to be at the same height at the same time, or the stool is unbalanced.

And for most of the history of SEMCI, the stool has been unbalanced.

Vendors …

In the early days (late 70s, early 80s), broker/agency system vendors (suppliers included Redshaw, AMS, and others) took a strong leadership role in early implementations of data exchange and the development of data standards.  The motivation was to increase sales.

Unfortunately, the adage “build it and they will come” didn’t hold true.  Several vendors got too far ahead of their users, and ended up supporting  applications with insufficient revenue stream.  By the late 1980s, most vendors had moved to a wait-and-see approach, undertaking serious development only after the demand was very clearly articulated.

Insurers …

Also, in the early days, insurers took a leadership role in introducing SEMCI.  The agent/broker associations had identified SEMCI as a priority, and insurer marketers saw an opportunity to gain market share by supporting their distributors.  Some insurers bought systems for leading agents.

Insurers also were the primary architects of the standards (few agents/brokers had in-house IT personnel).  Virtually all of the early standards were intended to have the agent/broker enter and send business transactions (initially focused on new business) to the carriers.  This would reduce the manual effort for the insurers, but actually increased the workload at the brokerage/agency.

As with the vendor pioneers, the insurers learned to move at the pace of the brokers/agents, and introduced Download, which  benefited the broker/agent, with the primary cost being carried by the insurer.  It is only a 50% solution.

Agents/Brokers …

Agents/brokers, through their associations, have been the champions of SEMCI since the outset.  Individual brokers have made significant contributions as members of working groups, committees, and boards.  Many brokers have invested heavily in technology which enabled various SEMCI functions.

However, we believe there have been two consistent weaknesses:

  1. There is no single broker/agent voice.  For example, in the US, ACT (the technology arm of the Independent Insurance Agents & Brokers of America), have been heavily promoting a SEMCI construct called RealTime for over 5 years.  However, the 2013 survey had only 2,200 responses (on a base of approximately 40,000 agencies in the US). Wwhat the priorities are for the balance?
  2. As important as SEMCI is, it has never been a number one priority for brokers/agents in selecting  insurance carriers.  When making a choice of insurance carriers, brokers have a number of other factors – financial stability, product features, service, price, etc. which typically take priority.

What does all this mean … to you?

We believe that the 3 legged stool has been , and continues to be shaky, with no one vision, and no one in control.

However, this past could be just prologue.  The real question now is whether there are other approaches, different constructs, that could move this forward.  Perhaps a fourth leg for the stool.

We’d like your thoughts.  First, from your experience, have we got the situation right?  Or are we missing something.

Second, what are your thoughts on a going-forward strategy for SEMCI?

In the next post, we’ll offer a collection of your comments as well as our thoughts what could be the way forward.


Ron Berg

Patrick, I absolutely agree with some of your detail on concerns. From a U.S. standpoint, Real Time may not be THE number one priority for brokers/agents in selecting a carrier, but in many types of agencies, ease of quoting and placing business is a driving concern primarily due to the need to time savings. If a specific insurer is not easy to do business with, that understanding is propagated within many agencies, and those “difficult” insurers see less quotes and therefore sales.

To your point, a main hurdle truly is agent awareness and education. Our U.S. insurers have worked as an industry to create solid Real Time quoting and inquiry functionality, and we need to keep focus on the awareness and education for agents/ brokers. True, our most recent Real Time/Download Survey ( did not yield a large percentage of responses across the potential Independent Agency plant as it could have – BUT, the results continue to support the process improvements: 86% of the respondents use a Real Time rating tool, and those using Real Time for Personal Lines are saving upwards of one hour per associate per day – Results for Real Time inquiry and servicing are similar.

On top of this, many insurers indicate the large majority of their incoming quotes are from Real Time comparative raters and management system functionality – In some cases, over 80%.

The “going forward” key from our is awareness, education, and consistency in implementations. That’s easy to say, I know – But ways to get the message out to the large percentage of agents & brokers who aren’t aware of the benefits needs to be the focus.

Marjatta Light

Like! An article in April 2014 issue of Canadian Underwriter(page16) by Brenda Rose. Provides a good perspective of where things stand today.

Although to date much good workflow work has been completed, the deficiency lies with technology which does not provide brokers with SEMCI. Low industry productivity levels and upwards client servicing cost pressures await a solution. Not to forget that all ages of insurance consumers are looking to use technology to conduct their personal and commercial business. With the reduction in the number of P&C players due to broker and insurer consolidations is a fix now plausible? Will the technology and social media giants diversifying into additional revenue streams, including P&C insurance, propel a will to make this happen? What will the future of technology in the Canadian P&C industry look like? Who will create it?

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