As a long-standing believer in the long-term value of the broker channel and the important advisory role of a broker, we are constantly looking for ways to help them better serve clients’ needs.
One way in which we continue to invest in the broker channel is by building and improving the tools and technology brokers have at their disposal to grow their business and respond to their customers’ needs and expectations. Another way we champion brokers is through supporting industry-wide initiatives that make it easier for them to grow their business.
The IBAC data exchange initiative
The Insurance Broker Association of Canada (IBAC) recently kicked off the next phase of its data exchange action plan, which involves brokers, vendors and industry stakeholders coming together in a working group to help develop and bring to the market a reusable data services library and testing facility. Through this initiative, IBAC aims to reduce the time, error rate and cost of facilitating connectivity in the Canadian P&C insurance industry, allowing for real-time data-sharing between brokers and insurers, without the need to manually input data more than once. For brokers to service clients effectively, they need to be able to receive data from a carrier, pull it into their broker management system, and then be able to act on a service request efficiently.
As we have been updating our own legacy systems, we have kept our broker partners at the centre of this evolution. It’s important for the best interest of the broker channel that we come together as an industry to bring this connectivity plan to life. It is a competitive advantage for the channel, to enable our move forward, not just for the individual brokers or carriers involved.
Exploring blockchain utility
We are currently part of a group of carriers and other industry players investigating the possibility of establishing a Canada-wide consortium similar to that of the US-based RiskBlock Consortium. In partnership with Deloitte and RiskBlock, we have been involved in assessing and exploring a blockchain utility to support the work we do with the broker channel, other carriers and third parties.
Important work to this end has been done in the US market, and we are exploring the potential for blockchain integration around three use cases identified as potential high value and medium complexity: Proof of Insurance (POI), and First Notice of Loss (FNOL) and Fraud.
Smart contracts built into distributed ledgers within the blockchain platform have the ability to enforce performance of the contract with resilience and certainty. Triggered by an event, the code in the distributed ledger automatically executes the fulfilment of a previously agreed-upon arrangement, thus eliminating the risk of delay and reliance on multiple intermediary parties.
The transparency, auditability and trust establishment capabilities of blockchain make it particularly appealing to the insurance industry. Open questions remain but we are committed to investigating and pursuing industry initiatives to enhance the efficiency and competitiveness of the broker channel.
POI and FNOL in particular show strong potential for blockchain integration, benefiting brokers by easing the process of sharing and validating data, cutting down on paper-related costs and data storage, and introducing a unique way to validate and securely provide proof of insurance electronically in real time.
Similarly, blockchain application to FNOL processing can also transform an inefficient, manual process involving a large amount of iterative information exchange, wasted time and resources and redundant completion of various forms, to a fully integrated process that involves data sharing between involved parties in a trusted manner while maintaining security through permissions; abating duplicative efforts, minimizing reconciliation issues and reducing costs.
Given the significant impact that technology has had on our industry – from legacy system overhauls and updated workflows to AI integration and broker connectivity – collaboration needs to be prioritized over competition where possible. For instance, we recently participated in helping the CSIO develop an incentive plan to encourage FinTech and InsurTech companies – who can be seen as a competitive threat – to focus their investments on the broker channel. Ultimately, when other players in the industry invest in the broker channel, we all win.
This article originally appeared in Canadian Underwriter magazine.