Real Time Revolution
Real time technology is sweeping the transaction landscape, making it easier for brokers to close sales
Insurance carrier portals are both glorified and vilified. Championed and loathed. Accepted and rejected. Like many polarizing forces, carrier portals need a little understanding. But most importantly from the independent broker perspective, portals must be judged for their value in the competitive marketplace. Shouldn’t we look beyond whether portals help carriers beat out other carriers in the battle for broker business? Perhaps we should focus on whether portals have any value in helping the independent distribution channel fend off the real predators—direct writers who prowl the e-commerce hunting grounds.
There is little dispute that in the short term, carrier portals provide insurers with a competitive advantage. In a 2010 industry survey, one-half of agent/broker respondents said that when a carrier portal is not available, average wait for commercial line quote response can be up to several weeks. So a carrier with a portal could easily win the business over a portal-less competitor—even at a higher price.
But step back from this transaction, and see the bigger picture. Who’s that feverishly working the Internet while the other carriers are squabbling over the business of independent brokers? Ah, yes. Direct writers, peddling their wares in the ever-expanding online marketplace.
What about independent brokers? How do they view carrier portals—these proprietary connections to insurance company systems? Brokers understand that companies have a competitive advantage in portals. They understand and appreciate the concept of having self-service access to their customer data in the carrier system. And they like carrier tools and services that make life easier.
But using carrier portals presents a number of significant challenges for broker managers as well as front-line servicing personnel:
- Brokerage employees must train on each insurance company’s system.
- Any time a company changes a system, users must be retrained.
- For new business or rating, a broker might have to connect to multiple carrier sites and re-key the same information multiple times—risking the likelihood of entry errors.
- If the broker wants a record of a submission within the broker management system (BMS), the data must be re-keyed yet again.
- Data keyed into a company system is not logged or tracked in the BMS, so the broker must rely on manual procedures to ensure there’s a record of all activity for each transaction. This creates additional issues: lack of an audit trail could lead to an E&O exposure; lack of documentation makes employee productivity analysis difficult; lack of documentation reduces the ability to analyze customer activity.
In addition, if used improperly, carrier portals can pose security risks. Customer data may be exposed to cookies in the Internet cache of brokers’ workstations and could be accessible by other websites. A portal left open for extended periods of time may expose customers’ personal information to anyone passing by.
For the most part, brokers object to carrier portals and the transfer of work from carrier to broker for zero compensation. Most brokers have invested in automated management systems with ever-increasing functionality, and they want to perform all functions from within the BMS.
In fairness, there are still certain complex transactions that—for now—are best handled through portals. Some types of policy change, for instance, require that a transaction be pre- or post-dated, or handled out of sequence. Carrier portals are helpful, too, for a broker without a BMS. Also, there are situations that reflect the reality of daily business. For example, if a servicing rep is certain of winning the business at hand by quoting information from a specific carrier, and there are no complexities in the transaction, that rep will make a bee-line for the carrier’s portal to retrieve the prized data and close the sale as quickly as possible.
The New Era: Real Time
But for the vast majority of transactions, the need for proprietary company portals has faded as the industry embraces real-time functionality. The evolution of broker-carrier communication (see sidebar) has delivered technology that brings numerous advantages for brokers while eliminating the challenges of using carrier portals.
Many portal capabilities are available via real-time transactions offered by participating technology vendors and insurance companies. For example, a broker can launch a function within the BMS to retrieve billing or claims information. Behind the scenes, a request is created that includes the user’s ID and password, and the inquiry is sent to the insurance company in a secure process. In less than 10 seconds—less time than it would take for the user to launch the company website and enter credentials—the broker receives the information.
If the user chooses policy inquiry and the company can return a declaration page document, that document can be attached to a client or policy within the BMS—again, without the user ever having to leave the system.
In addition to the ease of accessing information, real-time functionality eliminates the training obstacle. Current and new employees of the brokerage need only be trained on their BMS and how to use real-time functionality. Fortunately for the industry, forward-thinking organizations like Organization of Real Time Brokers Implementing Technology (ORBiT) and Insurance Brokers Association of Canada (IBAC) provide a forum for all stakeholders to discuss, investigate and collaborate on workflows and technology to strengthen and advance the independent distribution channel.
Ultimately, that should be the goal. Instead of focusing only on the daily small battles for broker business inside the distribution channel, everyone invested should co-operate on long-term strategy to fortify the channel. A new approach would be to use existing infrastructure and data transmission standards to facilitate end-to-end transaction processing that delivers real-time quoting and policy issuance to the broker desktop. This capability is in demand by independent brokers and their customers and, by extension, the carriers’ end customers—the policyholders. And let’s not forget the bonus—this approach would eliminate the technological advantage currently held by e- commerce-savvy direct writers.
Irv Kantar is carrier relationship manager at Applied Systems Canada, Inc.
Time has fostered dramatic change in the way insurance brokers and companies exchange information.
In the 1970s, brokers had a stack of paper apps and stamps, and companies had a room full of data entry operators. Brokers manually quoted an estimated price with a large instruction book and worksheets, then filled out paper applications and sent them to companies to be entered into a system by the team of data entry operators. The company issued the policy, and the new customer received the documents—three to four weeks later.
With advances in technology, companies set out to speed up the process by offering brokers access to their systems for limited functions. Connections were via dial-up or leased line, and the broker could use the same system the company data entry staff used.
While this access moved a portion of data entry from company to point of sale, it created a new problem for carriers: They now had to retrain the call centre team responsible for answering policy/business questions. The team needed to function as a “Help Desk” to resolve brokers’ technical issues ranging from not being able to connect to not knowing how to perform certain functions. And brokers needed to train employees on each carrier’s procedures and workflows.
More advances in technology delivered broker management systems to efficiently manage the brokerage and provide quote estimates via computer. The Internet resolved many connectivity issues, but carriers still expected brokers to connect to and use their systems for entering policy data. The “Help Desks” extensive user manuals and training sessions lived on. Even with great strides to make these systems more user-friendly through advances in web-based technologies, brokers continued to face the same problems these proprietary systems had always created—among them, training and re-training.
Copyright 2011 Rogers Publishing Ltd. This article first appeared in the September 2011 edition of Canadian Insurance Top Broker magazine.