31 August, 2018 07:00
Luc Corbeil and Ascher Berros | Photo : Réjean Meloche
The segment of the individual insurance benefits to the majority of technological innovations. The insurance business is lagging behind at this level, which is recognized by the insurers and the providers of the broker management system (BMS).
The insurance industry is not the only one to bring the technological innovations later, for companies and for individuals. The same situation is found in the banking sector, ” says Luc Corbeil, director, information technology at Groupe Ultima. “For example, the deposit of the cheque via mobile is available for a very long time for individuals. However, the feature is only available for a couple of years for businesses”, ” he says.
This reality is also true for the implementation of the standards of the Centre for study of insurance operations (CSIO) in insurance companies. Currently, standards exist, but implementation and use are not uniform across the different insurers, argues Stephanie Wei, communications director for the CSIO.
Several factors explain this delay. One of them is the complexity of the risks. The two companies may not get the same insurance policy for a single risk, ” says Ascher Berros, manager of strategic projects at Groupe Ultima. “The standards are therefore much more difficult to standardize. ”
The diversity of products does not help
The different product offerings of insurance providers make the task more complex. “The products vary widely in the insurance business,” Bryan Harper, vice-president and chief information officer at Echelon. They are sometimes simple, for example for a small business. When the risks become more complex, the process is still very manual. Some brokers wonder what is the advantage of adopting the standards of CSIO when they must answer to hundreds of questions. “
Several insurers are in the process of updating their legacy systems. This process ties up their resources, so they are not concentrated in advancing technological innovations, ” says Kevin Campbell, president and chief executive officer of Policy Works.
“This causes a lack of uniformity between the systems of insurers and their ability to do certain functions or to establish standards. This can also scrap dealers to adopt all the features of their BMS “, he says.
However, it is easier to do for some segments, such as commercial automobile insurance or small businesses that meet demanding criteria. “The required data elements to acquire different types of fonts are homogeneous, particularly in motor insurance, which is highly regulated, thus making the development of standards and software easier. On the other hand, the definition of small business varies from one insurer to the other. A small risk in a is greater in the other, ” said Ms. Wei.
Fortunately, several companies migrate to a single product called to be a custom, note Luc Corbeil. “It is necessary to standardize the customization, which is not a trivial matter. It is difficult to automate a process if there is no standard. Before getting there, it will be necessary for the insurers agree on what type of product they want to offer. “
The critical mass of transactions is heavy
Finally, the critical mass of transactions in individual insurance pushes insurance companies to bring innovations first. “Although the total amount of the premiums is higher in insurance companies, the number of policies individual insurance is worth more to insurers. With the companies, the contracts are negotiated even sometimes in person, ” notes Luc Corbeil.
A fact that also finds Bryan Harper. “The number of transactions will dictate where investment will be directed. In contrast, the majority of large businesses do not seek to purchase their insurance policy online. They will still use the old methods of work for several years, ” he says.
He also explained that the consumers in insurance of individuals want to have digital experiences, have access to their font on a client portal and on their mobile device. He does not see this situation will transpose to the key risks.
A working group that is unanimous
All are delighted with the announcement of the creation of a working group to address the issue by the CSIO. Several insurers, including Aviva Canada and Northbridge Insurance, participate in the working group. Intact Insurance is also one of the insurers which are part of the group. However, it has not addressed the issues of the Journal of the insurance.
Before coming to the constitution of the group, the CSIO had commissioned the Conference Board of Canada in 2017 to hold a broad consultation with industry through a study group composed of brokers, of telephone interviews conducted with executives of insurers and providers. A survey of 130 brokers, completed the whole.
Ms. Wei states that the mission of the working group will be to determine the data elements, at a minimum, are common to all insurance policies, regardless of the size or complexity. “This set of data will then serve as a foundation for the work that will be done to implement the standards for transmission of data in business coverage “, she adds.
“Aviva maintains its commitment to fostering the dialogue for the corporate segment, this is why we participate in the working group of the CSIO to advance innovations in the segment,” says Paul Fletcher, senior vice president, distribution at Aviva.
Do not take 20 years to achieve
“It is a premise, shade in turn Ascher Berros. The CSIO has demonstrated a willingness and has asked the major insurers to sit down together and discuss. It may take several years before a concrete solution is launched. Then, it will be necessary for insurers and providers of BMS will adjust to be able to integrate this new flow of data, ” he says. His colleague Luc Corbeil hopes that the process will run not for 20 years.
It is still too early to say when the technological gap will be eliminated between segments of the insurance businesses and individuals, ” says Stephanie Wei. “The key is that we have a wide range of insurers who work with us on a common approach to the implementation,” she concludes.