Digitizing Insurance Broker

Brokers in Canada are seeing a wave of digitization ripple through their channel, whether it’s thanks to insurers implementing digital insurance proof systems, technology companies digitizing the end-to-end commercial lines submissions process, or brokerages themselves taking a digital step in-house.

However, to successfully digitize the broker channel, all invested parties have to be onboard. After all, no man (or broker) is an island in the insurance marketplace.

“We view a digital broker as having three characteristics – one is the connection with the broker’s customer, the other is the digitization of their agency – so using data and analytics for process efficiency and insights into their business – and a third component of that is the connection to the insurers,” said Steve Whitelaw (pictured), who was appointed Applied Systems’ vice president of industry and partner relations for the Canadian marketplace in August 2019.

While insurers are all recognizing the need for connectivity within the distribution channel – because they’re looking for operational efficiencies and using data versus information submitted on paper allows them to automate a number of processes – not everyone is on the same page.

“Where we are in that cycle is insurers are at various stages of having the capabilities to have that real-time data exchange. Many are in progress of replacing their legacy systems, and that is a massive initiative to replace a legacy system that’s been around and duct-taped together since the 70s in some cases,” explained Whitelaw, adding that Applied is ready to collaborate with insurers once they’ve enabled those new systems.

Coordination between parties is where the challenge lies, something the Insurance Brokers Association of Canada (IBAC) knows well as it works through the steps of its data exchange action plan. In September 2019, the association unveiled that its Data Exchange Working Group completed the ‘first notice of loss’ reusable data service function. Applied in turn is ready to go to add this to its platform for carriers, but the next hurdle is getting all carriers to sign on.

“We need to get the carriers to play with us because it’s the two sides. We pitch a transaction to them, they catch it and they send us a response. If they’re not in a position to catch it and send us a response, then we can’t do anything with it even though it’s a capability that exists within our system,” said Whitelaw, though there is a silver lining. “We’re all on different journeys and the nice thing is that everyone’s on that journey, and those that aren’t…we’ll have to see what happens to them in the future.”

The writing is on the wall – with fierce competition in the insurance marketplace, carriers have to optimize the ease of doing business with brokers. This digitization is critical, says Whitelaw, in terms of meeting customer expectations going forward.

As for brokers, they’re seeing digitization as a given as opposed to something they have to consider moving ahead on. In fact, Applied has seen a 72% lift year-over-year in adoption of its software by this channel.

Coming from his work on the carrier side of the equation into his new role for Applied, Whitelaw sees an opportunity to influence the ongoing digitization of the broker.

“One of the goals is to improve the level of collaboration that’s required to digitize a broker. You can’t digitize a broker without engaging with your stakeholders, the insurers, so having that level of engagement with them and the associations [is important],” he told Insurance Business. “I think attitudes are in the right place definitely and that sense of urgency is growing to say, ‘We have to do this, sooner, faster, better.’”