C A N A D A’ S I N S U R A N C E A N D R I S K M A G A Z I N E . C A N A D I A N U N D E R W R I T E R . C A
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VOL. 78, NO.2, FEBRUARY 2011 CANADA’S INSURANCE AND RISK MAGAZINE. PUBLISHED BY BUSINESS INFORMATION GROUP
www.canadianunderwriter.ca
COVER STORY
2011 The Future of Gateways FEATURES
12 Real Time For the average person, “real time” means something like “fast.” But for brokers, who have to deal with multiple company portals, “real time” means something different altogether.
30
Insurers have introduced online portals, intended to expedite the exchange of data, communications and transactions with the broker channel. However, even though portals allow individual insurers to communicate with brokers in “real time,” portals still require brokers to deal with each insurer individually and not collectively. And so, are portals the answer? BY CRAIG HARRIS
16 Location Intelligence
46 Online Broker Service
Insurance companies have collected client geographical information for decades, but is it accurate, and do they know how to use it?
For brokers, the ideal way to provide online service delivery is to follow a full-serve, selfserve model.
BY SEAN MOLONEY
BY SCOTT ANDREW
‘Flow’ in Workflow
24 Special e-Delivery
52 Stay or Go?
The insurance industry has been encouraged to dive into the latest trend of offering mobile applications. Can they do so without scrapping their existing legacy systems?
Commercial insurance complexities can make daily workflows incredibly challenging, highlighting the importance of integrating broker management systems (BMS) and insurance companies.
Services are now available providing legally admissable proof of email delivery.
A broker management system (BMS) touches all departments of the brokerage, so many questions should be asked when contemplating a change to another system.
BY PETER SYMONS
BY PAT DUREPOS AND PETER SILK
BY BRENDA ROSE AND SHELDON WASYLENKO
20 Mobile Legacy
42
48
54
Data Conversion
SEMCI Dream
A risk management approach to data conversion can provide useful insights into both planning and resourcing conversion tasks.
Many in the industry remain committed to working towards a ‘critical mass’ adoption of solutions enabling single-entry, multiple-company interface (SEMCI) workflows.
BY DEBBIE OLSEN
BY MARTIN OUELLET
26 Transparent Billing Transparent billing is available for work undertaken on large, complex commercial losses.
BY SHANNON MAJOR
BY INGRID HIMMELMAN
Insurers and brokers realize there are some crucial ground rules for data exchange — including the need for XML standards and secure Web services.
40 Intensive Care This second article of a two-part series examines how Ontario’s auto insurance reforms are — or might be — affecting treatment of auto accident injury claimants. BY TERESA RIVERSO
58 Data Exchange
BY STEVE PIEROWAY
61 Climate Change When RSA travelled to northern Manitoba, it witnessed the effects of climate change first-hand. BY ADRIAN HALL
BY KARL GREENLAW
February 2011 Canadian Underwriter
3
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VOL. 78, NO.2, FEBRUARY 2011
PROFILE
10 Direct to the Brokers Wendy Watson and ORBiT look for ideal broker workflows in the aid of furthering a SEMCI solution. BY DAVID GAMBRILL
SPECIAL FOCUS
6
Editorial
8
Marketplace
64 Moves & Views 66 Gallery
Editor David Gambrill david@canadianunderwriter.ca (416) 510-6796
Art Director Gerald Heydens Art Consultation Pylon.ca
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Advertising Sales Christine Giovis christine@canadianunderwriter.ca (416) 510-5114
President Bruce Creighton Vice President Alex Papanou
Canadian Underwriter is published thirteen times yearly (monthly + the Annual Statistical Issue) by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd., a leading Canadian information company with interests in daily and community newspapers and business-to-business information services. Business Information Group is located at 12 Concorde Place Suite 800, North York, ON, M3C 4J2. Phone: (416) 442-5600. Canadian Underwriter, USPS 022-494. US office publication: 2424 Niagara Falls Blvd., Niagara Falls, NY 14304-0357. Periodicals Postage Paid at Niagara Falls, NY, USA. US postmaster: Send address corrections to Canadian Underwriter, Po Box 1118, Niagara Falls, NY 14304. All rights reserved. Printed in Canada. The contents of this publication may not be reproduced or transmitted in any form, either in part or in full, including photocopying and recording, without the written consent of the copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without prior written consent. Š Published monthly as a source of news, technical information and comment, and as a link between all segments of the insurance industry including brokers, agents, insurance and reinsurance companies, adjusters, risk managers and consultants. Privacy Notice From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-800-668-2374 Fax: 416-442-2191 E-mail: jhunter@businessinformationgroup.ca Mail to: Privacy Officer, 12 Concorde Place., Suite 800, North York, ON, M3C 4J2 Subscription Rates: 2010 Canada 1 Year $49.95 plus applicable taxes 2 Years $73.95 plus applicable taxes
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4
Canadian Underwriter February 2011
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EDITORIAL
The Fantasy of ‘Market Discipline’
No company can afford to exercise the kind of willpower required to break a soft cycle. Walking away from business is counterintuitive in a competitive marketplace. David Gambrill, Editor david@canadianunderwriter.ca
6
Canadian Underwriter February 2011
What will it take for Canada’s property and casualty insurance industry to get out of the current soft cycle, characterized by lower premium pricing and an expansion of available coverage terms? A $150-billion catastrophic event? A less competitive market? A bankruptcy or two? Alas, maybe the most important factors in breaking the current market cycle are things Canadian P&C insurers aren’t demonstrating much of right now (particularly in commercial lines). Willpower and discipline. To be fair, in a marketplace structured around competing for policyholders, it is simply too difficult for companies to appear “above the fray.” It is too difficult to give up whatever business exists out there on a point of principle. For example, when a commercial broker tells an insurance company that a client is about to shift its account because they have found the equivalent coverage elsewhere for 30% cheaper, what is the carrier’s first competitive instinct? To walk away? No. The carrier will offer 32% off and maybe even throw in some freebie coverage terms or two. After all, what’s the point of being in business if you can’t keep the business? Oh sure, CEOs are conditioned to say otherwise. When the media microphones are on, company executives talk about the importance of maintaining pricing discipline. They are fully aware the product should be priced appropriately and correctly, so that the insurer
doesn’t take a bath when a claim comes in. And yet. And yet… Company CEOs have opened the year noting Canada is currently about halfway through what is predicted to be a decade-long soft market. For about four straight years, the industry as a whole has taken an underwriting loss, some of the damage being hidden by reserve releases for prior-year claims. Companies are writing the same amount of — or more — commercial premium, and yet their profit margins are shrinking. How could this possibly be, if the product is being priced properly? CEOs are not blind to reality. They are aware of market cycles. They know years of soft-market pricing will ultimately come back to bite them. So why do these unsustainable rates continue? Because no company can afford to exercise the kind of willpower required to break a soft cycle. Walking away from business is counterintuitive in a competitive marketplace. To break the cycle would effectively be saying: ‘I am willing to take a loss,’ or ‘I don’t mind watching my premium base shrink and seeing my competitor’s expand,’ all to prove the point that pricing must be correct, not slashed. And so we continue to work our way through a soft cycle in commercial lines, which makes no sense to any of the players who know better, and yet everyone feels trapped within the cycle nonetheless. From a distance, it is almost like watching an addict talk
about how they feel trapped inside the behaviours that are making them ill. How often do we hear the plaintive cry of an addict: ‘I can’t help it,’ or ‘I know I shouldn’t be doing this, but I can’t seem to stop myself.’ Even some of the smartest executives are prone to take a passive approach to the soft market cycle. The way they speak, it is as if they feel the cycle is controlling them, and not the other way around. “We know we have to maintain pricing discipline,” they say to anyone who will listen, as if chanting the mantra to themselves will make it so. “The cycle made me do it.” Perhaps it is time for Canadian insurers to remember that the first step in a 12-step program is to recognize powerlessness in the face of an addiction. If this doesn’t happen, an intervention from a higher power may be required. Would the behaviour stop, knowing that regulatory intervention may be the ultimate — and unwanted — outcome of soft market pricing? Yet another step towards recovery is for addicts to make amends to others for the damage their behaviours have caused. In this context, insurers would be doing their clients a service by holding the line on pricing now, so that they don’t have to explain seemingly arbitrary rate increases to their clients further down the road. It’s time for companies to acknowledge their behaviours are causing this soft market in commercial lines, not the other way around.
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MARKETPLACE
Canadian Market CANADIAN CATASTROPHES IN 1998, 2005, 2009 AND 2010 COST INDUSTRY $3.8 BILLION Canadian catastrophes in 1998, 2005, 2009 and 2010 affected 850,000 insured properties and collectively cost the industry $3.8 billion, according to data from PCS-Canada. These figures appeared in the article ‘Summary of Catastrophe Activity in 2010 and Earlier Years,’ published in the MSA/Baron Outlook Report Q3-2010. PCS-Canada identified four catastrophes in 2010, including tornadoes in Ontario, storms and flooding in Saskatchewan, a hailstorm in Alberta and Hurricane Igor hitting Newfoundland and Labrador. “In summary, the four catastrophes caused an estimated insured property loss of nearly $800 million, based on current estimates,” according to the summary. “These same events also produced over 85,000 claims to the insurance industry.” PCS-Canada said reviewing past catastrophes was a difficult assignment, because many insurers did not have recoverable records and mergers and acquisitions made it difficult to capture some data. But a review of the 1998 Ice Storm shows it resulted in $1.5 billion of insured property damage to more than 660,000 properties.
8
Canadian Underwriter February 2011
The Toronto weather storm in 2005 caused about $600 million in insured losses, affecting more than 24,000 properties. Nine individual events in 2009 caused about $1 billion in insured damage to more than 80,000 insured properties, including vehicles.
SOFT COMMERCIAL MARKET IN CANADA TO CONTINUE INTO 2011 Soft commercial insurance market conditions persisted throughout Canada in 2010 and are poised to continue into 2011, according to a comprehensive report published by Marsh Canada. “Key commercial insurance market drivers from 2009 — including intense competition among insurers, abundant capacity and relatively few insured catastrophe losses —continued through 2010 and are forming market conditions for 2011,” Marsh said in its report, Approach Your Risk With Clear Direction: North American Insurance Market Report 2011. The report found clients are seeing lower rates on average across all major coverage lines. For Marsh clients renewing in the fourth quarter of 2010: property rates typically declined 5% to 10%; primary liability rates declined 7.5% to 12.5% for clients with low-risk profiles and little U.S. exposure; and directors’ and officers’ (D&O) liability insurance rates for public companies not listed in the United States were flat to 15% down.
MARKET TURN WOULD REQUIRE A $150-BILLION EVENT: GUY CARPENTER It would take a $150-billion insured loss event to create a decided and sustained hard market in the global reinsurance market, Guy Carpenter reports. A $50-billion insured loss event would slow the decline of property catastrophe reinsurance rates for at least one year in the current capitalrich environment, Guy Carpenter said in its GC Capital Ideas. “At $100 billion, we believe ‘outlier’ reinsurance entity failures could occur, while a $150-billion insured loss event would create a decided and sustained market turn,” it says.
Regulation NEW RULE FOR B.C. BROKERS WHEN PLACING COVERAGE WITH UNAUTHORIZED INSURERS A new rule outlining procedures B.C. brokers must follow when placing coverage with an unauthorized insurer will take effect on Feb. 28, 2011. Section 76(1)(c) of the Financial Institutions Act in British Columbia provides a limited exemption from a ban on placing insurance with an unauthorized insurer. Rule 7(11.1), which takes effect in February, establishes how to conduct an insurance transaction when the exemption is in effect. According to Rule 7(11.1),
brokers must notify the Insurance Council of British Columbia in writing prior to conducting any insurance transactions with an unauthorized insurer. The written notification must include: • the name of the individual broker or agency; • the primary broker at the agency; and • confirmation that the broker understands the disclosure and trust requirements contained in Rule 7(11.1). Related to the last point, the broker must disclose to a client in writing the risks associated with an unauthorized insurer.
CCIR OUTLINES ISSUES TO BE ADDRESSED WHEN FOREIGN INSURERS WITHDRAW FROM CANADA The Canadian Council of Insurance Regulators (CCIR) has posted a document on its Web site outlining a number of issues that must be addressed when foreign insurers wish either to withdraw from Canada or withdraw assets vested in trust in Canada. The considerations are a result of recent amendments to Part XIII of the federal Insurance Companies Act, which effectively changed the federal regulatory focus from the location of risks to the location of an insurer’s business activities. Thus, when foreign insurers withdraw, CCIR states: “each province must be satisfied that the foreign insurer: (1) is no longer carrying on business/transacting insurance or acting as an insurer in the province, and will not in the
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future do so; and (2) has adequately provided for the protection of existing policyholders in the province, before agreeing to revoke a foreign insurer’s provincial licence which must occur to complete the withdrawal process.” To ensure a foreign insurer no longer carries on business in Canada, a few questions must be answered, the CCIR says in its document. A full list of questions is available on the CCIR Web site at: http://www.ccir-ccrra.org/en/
In a Q&A with Alberta Superintendent of Insurance Arthur Hagan, posted on the TIC’s Web site, broker associations asked how many times a client may invoke the ‘voluntary disclosure’ application to reduce the 50% tax to 10%.
Brokers understood the application would be a “onetime only” event, but the wording of the legislation does not say this. Hagan confirmed that in theory, a client could apply more than once under this
provision and not be breaking any laws. He added, however, “that it was probably less likely for a client submitting repeated requests for the minister’s discretion to obtain a sympathetic hearing.”
Cunningham Lindsey offers expert claims handling for the most complex and specialized losses. To access our team of experts, write to us at corpservices@cl-na.com for a copy of our new Specialty Services Directory.
ALBERTA CLARIFIES ‘VOLUNTARY DISCLOSURE’ RULE RELATED TO PAYING TAX ON UNLICENCED INSURANCE The Insurance Brokers Association of Alberta (IBAA) and the Toronto Insurance Conference (TIC) have received some clarification about Alberta’s ‘voluntary disclosure’ rules, which relate to the payment of taxes on unlicensed insurance. In Alberta, a client may lawfully arrange unlicensed insurance as long as: • the insurer did not solicit the business; and • the commercial client pays a tax equal to 50% of the premium it pays for the unlicensed insurance. Under the province’s ‘voluntary disclosure’ rules, if a client realizes it has placed unlicensed insurance without paying the required tax, it can apply to the Alberta Superintendent of Insurance to have the unlicensed premium tax rate reduced from 50% to an unspecified amount not less than 10%.
www.cunninghamlindsey.com
February 2011 Canadian Underwriter
9
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PROFILE
Direct to the Broker Channel David Gambrill Editor
Wendy Watson, vice president of operations at The Precept Group Inc., is a strong advocate for making brokers’ workflows more efficient. Wendy Watson, vice president of operations for the insurance and financial services firm The Precept Group Inc., is using her professional background as a direct writer to help make life easier for the broker channel. Watson is one of several key players in the 2010 incorporation of Ontario Real Time Brokers in Transition (ORBiT), a group first launched in 2009 to address broker workflow issues. The group’s mandate includes striving for real time transactions between brokers and carriers. ORBiT believes all suggestions for real time workflows must promote single-entry, multiple-company interface (SEMCI) with insurance companies. But ORBiT’s focus is not on technology. Rather, its purpose is to identify and design ‘best practices’ for broker-carrier workflows, helping the broker channel to remain profitable.
10 Canadian Underwriter February 2011
Watson has some insight into the challenges facing the broker channel having worked for the first 15 years of her life as a direct writer. When she was 18 years old, she joined CIAG Insurance in New Liskeard, Ontario, north of North Bay. [CIAG eventually became The Co-Operators.] During her time at The CoOperators, Watson did it all. She worked in service, sales, underwriting, administration, wrote specifications and tested computer systems. She managed a service area in west end Toronto. She also went into systems development on the user side. After a brief hiatus from the insurance industry, she switched over from the direct side to the broker side in 1991. She joined Daly Farnworth McGregor [DFM] in Guelph, Ontario, one of three companies that merged to become The Precept Group Inc. in 1998. As Watson describes it, moving from the direct side to the broker side was like moving into a new country. “It was a shock when I came to this [broker] side,” she says. “Even the language was different. And at The Co-Operators, our front-line people had a pen. When I got to the broker’s side, our folks had to call underwriters for permission to write the most basic risk. And the rate manual wasn’t really clear. Everything was manual. Everything was manual.”
Luckily for Watson, Jim McGregor, managing partner at DFM, had a similar interest in driving process and efficient workflows. At that time, McGregor was onside with the introduction of a quoting system then known as NDS (Nova Data System). Watson worked with carriers at the time to get them to honour the prices in NDS, so that brokers could put information into the system once and get rates for all of their carriers.
ORBiT is developing a best practices workflow and then brokers will choose their own system, their own BMS that works for them. You might say broker workflows became a passion for Watson. She worked on a number of industry projects like Synchron and the CSIO Portal, which were promoted in their day as SEMCI-style technology solutions. Neither project really achieved lift-off, however, and Watson believes it was because each worked towards a single technology solution for all broker-carrier interactions. “There can’t be a one solution for the many different ways that brokers conduct their businesses,” she says. “And I think that’s why both failed.”
ORBiT advocates SEMCI objectives, but it takes the emphasis off of employing a particular technology. Instead, the organization concentrates on working with industry stakeholders to improve broker workflows. “What we’re doing in ORBiT is developing a best practices workflow and then brokers will choose their own system, their own BMS [broker management system], that works for them,” Watson says. “The brokers can build their [BMS] system the way they want, the carriers can build their systems and integrate [with the brokers] the way they want. But we at the front line will have our best practice workflow.” Certainly the difference between the workflows of direct writers and brokers is apparent to Watson, who has worked with both. “In terms of upload/download, for our agents at Co-Operators, they would put something into the system and that would be it — it was truly onceand-done,” says Watson. “And when you get to the broker’s side, you’re writing stuff on paper, you’re putting it into a courier to get to a carrier, and then you’re waiting eight weeks for a document to get back. This is still the case. “We have carriers that are causing brokers to do duplicate entry into [the carrier’s online]
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portal to eliminate that wait period. Brokers like us who are refusing to do duplicate entry are waiting six to eight weeks to get a change back on a policy. From 1991 to today, they [the inefficient workflows] still exist.” ORBiT’s purpose is to foster an industry-wide dialogue to help solve these problems. It emerged after Watson and others organized the Real Time Broker Expo in Cambridge, On-
tario in September 2008. Two hundred and eighty-five people watched an Applied Systems broker demonstrate how transactions were done between brokers and carriers in the United States. Watson knew that for the same type of thing to work in Canada, it had to be broader than just an Applied Systems solution. But enough people were interested in the process, and ORBiT was born. The big
thing, Watson says, is that brokers hadn’t really ever been asked before what process best works for them. “As brokers, we’ve never been asked what we want our BMS to do,” she says. “We’ve never been asked by our carriers about the best way to do something. We’ve always been told.” One of ORBiT’s objectives, therefore, is to broaden the discussion about broker workflows to include brokers, broker associations, carriers, BMS vendors and other interested stakeholders. “Our mandate is to facilitate open communication between all stakeholders and to provide education to all stakeholders to advance once-and-done transactions, so we can improve efficiencies by way of best practices workflows using industry standards,” Watson says. “That sounds big and broad, but it’s pretty simple. Everybody is at the same table, coming up with a best practice workflow, using industry standards.” In a way, it sounds very much like the CSIO’s recent emphasis on industry standards — although on the CSIO side, the talk is about technology standards, not workflows. But since the two are often interrelated, CSIO sits in on ORBiT’s board. “Standards are key,” says Watson. “We cannot do real time — and we can’t even do upload and download — without standards. The problem is,
not all carriers and broker management systems are using current standards. If the standards aren’t used, we don’t have clean data coming down in a download to our BMS, we can’t do anything moving forward until we clean up that data. That’s one of our focuses: keep driving the standards. If we don’t, we won’t be able to move forward.” ORBiT’s work is broad. Its 10 working groups touch on almost every aspect of a broker’s daily work environment and deal with the following issues/topic areas: • password management; • real time payments; • real time inquiry for billing, policy and claims, with a return document to be attached to the broker’s BMS; • clean download; • renewal PDF downloads; • media/education; • commercial lines; • quoting; • new business; and • policy change. Ultimately, Watson sees her — and ORBiT’s — role as driving process, not systems design. “I was on the user side, not on the back-end side,” she says of her experience in the insurance industry. “Whether we were developing a property system for The Co-Operators or leading the claims systems side, my job was always to ask: ‘What do we as users need?’ That fits in with what I do on ORBiT.”
February 2011 Canadian Underwriter
11
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Brenda Rose Vice President, Firstbrook Cassie and Anderson
Sheldon Wasylenko
Assistant General Manager, Rayner Agencies (Saskatoon)
The insurance industry often uses the phrase “real time” in discussions about technology, but the term has a different connotation for brokers, who must communicate with multiple carrier systems. Language has always evolved to meet our communication needs. As the world around us changes, we invent some new words, but existing words also develop fresh layers of meaning to explain previously-unknown objects and ideas. If you could have talked to your Great Granddad about the Internet or your laptop, about backing-up your files or finding the right price for buying a skateboard online, the words themselves would have been familiar to him; but in the context of his day, they would not have held any meaning for him. If you had asked Great Granddad what “real time” meant, he would have wondered what
12 Canadian Underwriter February 2011
other kind of time you might be talking about. As the development of new meaning occurs, a word’s precise connotation — especially in different situations — is fluid and may be subject to different interpretations. The insurance industry often uses the phrase “real time” in discussions about technology, for example, but the specific definition appears to be elastic. In our everyday lives, “real time” brings to mind situations in which electronic information is instantly available to us. Usually via the Internet, we tap into electronic sources that give us the ability to know the current status of our bank balances, verify inventory at a particular store, compete for the best concert seats or check flights arriving at or departing from the local airport.
BROKERS AND ‘REAL TIME’ Within the framework of an insurance brokerage, however, the meaning of “real time” must take into account the broker as an intermediary, as well as the essential nature of the transactions that occur. Brokers deal with multiple insurers, using an electronic management system as the central repository for client data and
Illustration by Philippe Béha/www.i2iart.com
The Reality of ‘Real Time’
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the base from which communications to insurers are launched. Very often these messages are complex sets of instructions including details about clients and the coverage required. The data is contained within a broker management system (BMS) and needs to be transferred to the insurer. The phrase “real time” suggests the idea of ‘live’ communication. But within the brokerage context, messages must not only travel between two distinct systems, the transaction process must extract the necessary information out of the first system and relay it in a comprehensible form directly to the insurer. The insurer’s system must then accept the information and provide an immediate acknowledgement and response to the broker. Coordinating between two distinct systems is often a challenge. Each must be able to interpret the information sent from the other usefully; agreement about the language to be used and the expected content and format of messages is therefore essential. For brokers, the issue is still more complicated. Again, we must remember brokers conduct business with a number of insurers. To be most effective, brokers need to communicate with each of their partners in the same manner, since it is impractical to program different processes for each different correspondent.
THE ROLE OF CSIO This is where the Centre for the Study of Insurance Operations (CSIO) plays its role. Its mandate includes the creation and maintenance of standards to promote efficiencies for the broker distribution channel. But CSIO is not merely a reference centre: it also provides a dynamic, open forum in which industry stakeholders work together to develop and enhance existing standards to fill new needs as the industry evolves. The technology committee of the Insurance Brokers Association of Canada
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Co-ordinating between two distinct systems is often a challenge. Each must be able to interpret the information sent from the other usefully.
(IBAC) has devoted significant time and resources to examining how brokers do business, considering how processes could be improved and reviewing new technological trends and initiatives. Recently the IBAC committee discussed the concept of “real time” and the meaning of these words within the context of Canadian bro-
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February 2011 Canadian Underwriter 13
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kerages. Ultimately, it was agreed a “real time,” broker-to-insurer communication would be expected to: • concurrently update the insurer’s system with information from a broker’s system; and • transfer data via standard, non-proprietary messages that strictly adhere to CSIO XML standards. Without any one of these elements, brokers are not communicating as effectively as current technology could allow. For instance, if all data is not sourced from the broker’s database, if instead it is separately entered into fields captured only by the insurer system, the broker’s data record is not complete. This affects both the broker’s efficiency and errors and omissions exposure. Alternatively, if one insurer or broker system uses message formats diverging from the standard, then anyone corresponding with them must create, learn and follow a separate and unique process for those transactions just for that one insurer or broker. As technology and the language describing it constantly evolve, various processes are presented to brokers as “real time” solutions when, in fact, they do not meet the criteria of extracting live data from broker systems in a standard CSIO XML format and conveying it directly to insurer systems. Terminal or Web-based screen-scraping tools, store-and-forward methods, batch processing, software-bridging techniques, and even direct links to insurer portals or systems for client-specific details not recorded in the broker's system may all may be promoted as “real time,” but they do not fit IBAC’s vision. Certainly some may offer an improvement on laborious manual duplicate entry, but they are at best temporary, intermediate steps. These compromises ultimately cost the broker time, either immediately or later. When we multiply those small inefficiencies over several insurers, the costs expand to impractical — and unacceptable — levels.
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IBAC’S VISION IBAC has previously made clear its position that brokers should not be obligated to use insurer Web sites. In place of these ‘portals,’ the association has been working on an alternative means of data exchange, a process embodying what IBAC sees as “real time”
The phrase ‘real time’ suggests the idea of ‘live’ communication. But within the brokerage context, messages must not only travel between two distinct systems, the transaction process must extract the necessary information out of the first system and relay it directly to the insurer.
communication for brokers. This process will be characterized by: • data transactions that start and end in the BMS; • data flowing between systems electronically and transparently, without user invention or data entry on
insurer portals, systems or pop-up screens; • transmission formats and content that strictly follow CSIO standards; • immediate response generation by insurer systems, such as a simple acknowledgement, error message or, ideally, a complete return transaction; and • any translation or manipulation of data to accommodate an insurer’s system occurs on the insurer’s side of the transaction (not within the broker system). IBAC has been focusing on using such a process for policy changes, implementing the Data Exchange Project, now in its second phase. The project involves a growing list of insurers such as Intact, RSA Canada, The Dominion, Guarantee Company of North America, Gore Mutual, The Economical Group and Aviva. It also encompasses all major Canadian BMS vendors, including Keal Technology, Zycomp Systems, Policy Works, CIM-Data and Custom Software Solutions. Applied Systems has recently committed to include this functionality in the development of its Epic product. With both brokers and insurers looking to save time and dollars, these participants are cooperating to fulfill the “real time” ideal within IBAC’s criteria. As time goes on, and insurer legacy systems are enhanced or replaced, even richer communication will become possible. In examining any software or workflow, it is important to dig deep and consider what is actually happening to data during the transaction. A discussion of “real time” needs to go beyond the label. It needs to address the purpose of the exchange, as well as both long-term and short-term efficiencies. We must ask from where information is drawn, where it is recorded and how and to whom it is transmitted. If we can understand the essentials about our processes and persevere to ensure our principles are not diluted, we can improve the effectiveness of both brokers and insurers for the benefit of all stakeholders.
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Location Intelligence Insurance companies have collected client geographical information for decades, but the question remains: Do they have the most accurate data? Sean Moloney
Director, Financial Services, Pitney Bowes Business Insight
One of the most important pieces of policyholder information lies right under the gaze of insurance companies — location. Insurance companies have collected client geographical information for decades, but the question is: Do they have the most accurate data? Too often that crucial location data remains unverified or, perhaps worse, underused, which affects how the risk might be underwritten. Enter “location intelligence,” defined as the ability to visualize spatial and geographic information to gain critical insights and make better business decisions. Instead of rows and columns of static data, location intelligence software allows insurers to view rich, colour-coded maps and work with visually interactive analytics.
16 Canadian Underwriter February 2011
GEOCODING Geocoding is an essential component of location intelligence.The process of geocoding an address involves assigning a unique latitude and longitude to a physical location. It can pinpoint the location down to the building rooftop (parcel centroid) level — an unprecedented degree of “point-level” accuracy. Point-level geocoding can very precisely determine a property’s distance to the coast, for example, or its proximity to a fault line or an area prone to wildfires. Location intelligence represents an entirely different approach to managing risk exposures.The technology provides business users with the ability to overlay seemingly disparate “layers” of location data — i.e. policyholder locations, flood zones and fire districts — for analysis. Once these layers of location data are associated, they can be used in a variety of ways, including mapping/visualization (i.e. does the policy appear to be in a flood zone), spatial querying (i.e. show all policies within 100 meters of a designated fault line) and calculations (i.e. what is the distance to the nearest fire hydrant?).
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LEVERAGING LOCATION By leveraging location intelligence, insurance companies can integrate data about policies, claims, weather, terrain, geographical boundaries and demographics. Insurers now have the ability to visually identify their exposures, pursue risk exposure management and conduct strategic catastrophe management planning. Indeed, catastrophe management is one of the prime areas in which insurers at the business level can put location intelligence to practical use. The insurance industry has taken sharp notice of the rising trend in costly natural disaster events in Canada and its accumulation of risk in key geographical areas. This is especially true for water damage, severe rainfall events and potential earthquake exposures. Without question, implementing best-in-class catastrophe management for natural disasters has become one of the most critical strategic business drivers for the property and casualty industry. Yet in some cases, insurers have relied on incomplete risk management practices or inaccurate location data in their underlying analysis of risk exposure. For example, legacy underwriting processes have traditionally used postal code tables — and in some cases, onsite inspection — to assign rating territories, manage risk and set premiums. However, postal codes were never designed to pinpoint physical addresses — their sole function is to optimize mail delivery. Postal codes typically aren’t precise enough to accurately calculate proximity to risks, such as a property’s distance to an exposed coastline or a major fault line. The technology behind location intelligence leverages a variety of data sources including aerial maps, geographic information systems (GIS), consumer demographics, as well as insurers’ own policyholder information. As such, it can identify to a significantly greater level of detail and granularity the kinds of risks insurance companies are underwriting and whether there is an aggregation of these risks. Insurers can also project potential loss scenarios given this specificity of location data.
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It can help insurance carriers understand total financial exposure to a given event, so that they can more effectively manage reinsurance treaties and geographic risk exposure on a real-time basis. Spatial technology provides a superior vantage point from which to measure geographic risk accumulation; it also helps perform “what if” scenario analyses that consider a multitude of potential loss scenarios. Location intelligence can also be used for: • portfolio risk aggregation analyses; • realistic disaster scenario and probable maximum loss (PML) analyses;
Location intelligence is the ability to visualize spatial and geographic information to gain critical insights and make better business decisions. • visualization of third-party catastrophe models; • real-time management and regulatory compliance reporting; and • seamless integration with existing databases, legacy systems and IT infrastructure. The end result is a more dynamic, intuitive management view of a company’s entire catastrophic exposures and portfolio risk aggregation. It represents a more intelligent approach to location risk.
LOCATION-ENABLED UNDERWRITING Location intelligence can also be integrated into real-time underwriting decisions. Using a location-enabled underwriting workstation, the underwriter can validate a policy address and view it in proximity to other policies or a variety of geographic risk factors — including earthquake faults and epicenters, flood zones, brush zones, fire districts and hydrant locations, hail and wind storm sites, tornado sites, historic hurricane paths and coastlines. The underwriter has the ultimate flexibility to incorporate any information into risk analysis related to location. Location intelligence can also be integrated into a carrier’s automated
underwriting and rating applications, working within rules engines to feed the appropriate location information needed to score or process geographic risk rules. Policies can be rated more accurately when rating territories can be visualized, helping to minimize underwriting leakage and ensure regulatory compliance. Take claims management as another example. In the face of a prospective claims event, location intelligence technology enables carriers to analyze on a virtually real-time basis those regions likely to be most affected. In the case of a hurricane, live weather feeds can be integrated into location-enabled systems to track the storm’s wind fields and match them against policy locations so estimates of probable losses can be calculated and claims managers can proactively assign staffing resources. Individual adjusters can use this same information to better plan their daily agenda to cover losses in proximity to each other. Location intelligence technology can also help detect patterns of fraud. By viewing storm paths and matching these against claims, anomalies may become apparent and flagged for further investigation.
MARKETING EDGE In terms of sales, marketing and distribution, location intelligence helps carriers optimize their sales processes by more effectively routing sales calls by geography. It also plays a key role in identifying areas of market potential and aligning sales, marketing and broker/agent networks to capture that market potential. Using demographics and lifestyle information to profile best customers and predict product-purchasing behaviors can help brokers and agents more effectively up-sell and cross-sell existing customers and identify the highest potential lifetime value of new customers. Insurers are increasingly recognizing both the pervasiveness of “location” as a critical aspect of information gathering and the tremendous impact that “getting location right” makes on their bottom line.
The Industry Solution for Efficient, Reliable Repairs Contractor ConnectionSM is Crawford’s managed repair network, providing the industry with a quick, efficient and customizable performance-managed system. Premier customer service delivery is Contractor Connection’s top priority. We offer reliable and credentialed contractors operating on a five-point quality assurance program and an estimate review process which provides cost efficiencies and the best value to our clients. Contractor Connection will provide enhanced customer satisfaction, indemnity management and time-in-process, as all facets of the repair are tracked and managed in real-time in our state-of-the-art management system. Email us at ContractorConnection@crawco.ca for more information. www.contractorconnection.com
Contractor Connection is part of the Crawford System of Claims SolutionsSM
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CdnUnderwriterCrawfordContractor1 1
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Mobility’s Legacy
Managing Partner, OARBIC Inc.
More and more property and casualty insurance companies seem to be dipping their corporate toes into the smart phone or tablet world, by developing and providing applications — or ‘Apps’ — that run on iPhone, iPad, Blackberry and/or Android devices. These Apps typically provide the consumer with functionality ranging from simple checklists of what to do in case of an automobile accident, all the way to the ability to make policy change requests. It seems a week doesn’t go by without another company launching a new App. This prompts the obvious question for those companies that haven’t yet developed such a tool: Is there a risk of getting ‘left behind’? Which leads to a second question: Will my legacy system hamper my ability to develop an App? It is too early to say definitively whether Apps are going to have a significant impact on consumer
20 Canadian Underwriter February 2011
satisfaction, consumer loyalty, industry efficiency or relationships with the broker community. One thing is certain: the demand for a mobile computing environment/lifestyle is accelerating. Assuming, therefore, that every P&C insurance company should at least consider and develop a mobile channel strategy (even if the resultant decision is to do nothing), companies using legacy systems will also have to consider the impact of the legacy system(s) on such a strategy.
LEGACY SYSTEMS AND MOBILE TECH So what does having a legacy system do to the development of a smart phone App? Does it make it more difficult? Impossible? Have no impact? The answer is, as you would expect to hear from a good consultant, it depends. The functionality of currently existing Apps seems to fall into four different types:
1) Pure Insurance Items like filing a first notice of loss (FNOL), obtaining payment information, reviewing coverage information and making policy changes. 2) Related to Insurance Items like company and broker contact information, preferred repair shop locations and contact information.
Illustration by Philippe Beha/www.i2iart.com
Peter Symons
Can legacy systems accommodate the rush to develop and provide applications — or ‘Apps’ — that run on iPhone, iPad, Blackberry and/or Android devices? Yes they can.
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3) Complementary to Insurance Items such as applications that help you store photographs of your artwork and furnishings, inventory checklists, accident safety checklists and vacation checklists. 4) Unrelated to Insurance The sky is the limit here. Of these four types of functionality, only the first (pure insurance) requires direct access to policy management, claims or billing systems.This means the majority of the four types of information/services provided by an App do not require any access to a legacy system. In other words, it is entirely possible to develop a smart phone App that can have great appeal to the consumer without access to a legacy system. An excellent example of this is ‘Chrome’ from ANPAC (American National Property and Casualty). ANPAC insures specialty cars: custom cars, Hot Rods, replicas and so on.They have developed an App allowing anyone (not just a policyholder) to view price guides and other Blue Book information, locate and get directions to car shows, load photographs of their custom car and create road trip journals, complete with photographs taken during special trips one can take in a custom Hot Rod. ANPAC advertises its insurance program, but it’s subtle. It just quietly provides product information, rather than in-your-face advertising. Critically, the App is exactly the sort of thing a car enthusiast would use on a regular basis. So, although the presentation of the product information is subtle, it is also frequent. Chrome is an excellent example of an App that has a huge potential for success for the company, for both product promotion and for branding and all without accessing any legacy systems.
LINKING MOBILITY TO LEGACY But suppose you do want to access your legacy systems. Suppose you want to create an App that is a FNOL reporting system, or a billing inquiry system or coverage inquiry system.
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Such an App makes two basic demands of a legacy system. The App has to be able to find and retrieve data from the legacy system(s), and it has to provide and update data to the legacy system. The problem is, of course, making the legacy system do that.To a large extent, this is similar to the single-entry, multiple-company interface (SEMCI) challenge that has dogged the industry for years, in that it requires two very different systems to be able to talk to each other. The good news is that, unlike SEMCI, which has been hampered not only by technology but also by business issues, the smart phone-to-legacy systems link is purely a technical challenge. There is no requirement to follow industry-imposed standards, no require-
ment to create a one-size-fit-all environment — it’s a matter of every company for itself. There are (at least) two methods of changing legacy systems so that they can talk to smart phones. The first is to attach a ‘front end’ to the legacy system. Such a front end would understand the complexities of the legacy system and would aggregate data that the smart phone needs onto a server, presenting the data, most likely in XML form, to the smart phone when called. Similarly, the smart phone would deposit data to the server and the frontend system would update the legacy system as required. One advantage to this approach is that, since most of the work is done on the front end, there is limited need to open the Pandora’s box of code in the legacy system. Additionally, the front end can ‘front’ more than one system. So if a
company has multiple legacy systems, the front end can extract data from multiple systems — auto information from one, perhaps, and habitational information from another, for example. If a company does not wish to develop such a system from scratch, several systems are available that can be used as a front end. For example, NexExchange from Brovada is such a product. To be clear, this is work — and lots of it. But it’s still significantly less work, risk and cost than a wholesale system replacement. Another option is to change the legacy system into a Services Oriented Architecture (SOA). Many examples exist of insurance companies modifying their legacy systems to an SOA. Through this architecture, a company can make its applications and databases available as ‘services’ to be consumed by other systems, systems such as smart phones. Legacy systems particularly lend themselves to such changes, since they tend to have multiple — but basically similar — areas of code than can be consolidated. For example, most legacy systems have completely separate code structures for ‘create,’ ‘update’ and ‘inquiry’ transactions, but fundamentally they are all doing many of the same things. All three of those transactions would read the database to see if a policy was present. All three do different things once the read has occurred, but why have three areas of code that read the database? Simply — and I use that term loosely, since it is complex — have a single ‘service’ that reads the database, and have each of the three transactions call or consume that service.
OTHER ISSUES Of course there is far more to consider when thinking of making a smart phone work with a legacy system. Issues surrounding security, latency and confidentiality, to name just a few, are important and need to be addressed. But this is the case no matter what type of back office system a company uses. Can a smart phone and a legacy system co-exist? We would say a resounding yes.
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10/8/10 3:49 PM
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Special
e
Delivery
Services are now available providing legally admissible proof that your email has been received and your clients’ information is protected.
Martin Ouellet
Email privacy breaches can be costly for your insurance business. The dollar amounts of judgments and the impact of lost customers can combine for a devastating effect on your bottom line. As regulatory requirements impose greater responsibility on business owners, privacy experts advise that everyone in a business environment understand the truth and consequences about email privacy.
Regional Sales Manager, EMAIL MISCONCEPTIONS Applied Systems Canada A poll of corporate chief information officers Inc. and others in information technology reveals these common email misconceptions:
‘Read’ receipts provide proof that an email was delivered. • Not true. Although standard email programs offer this as an option, ‘read’ receipts do not hold any legal weight and can be easily forged or denied by the recipient. ‘Sent’ and ‘Archive’ folders store all messages and serve as further proof that email was delivered. • Don’t believe it. Archived email may show what you sent. But it does not show what the recipient saw. Sent emails can also be edited/ modified and then stored as an archive file, which dismisses it as proof. Printed email can be used as admissible evidence in a legal proceeding. • Not a chance. Printed email is easily modified. It is usually deemed inadmissible due to questions about content authenticity, including 24 Canadian Underwriter February 2011
sent time, delivery proof and message details. Email is always delivered to its recipient unless the sender is otherwise notified. • Wrong again. According to Ferris Research, 3% of non-bulk, business-to-business Internet email never gets delivered to its intended recipient. Given the proliferation of spam and blacklisting, some mail systems turn off bounce notices, meaning the sender is not aware of non-delivery.
THE RULES Canada’s Personal Information Protection and Electronics Document Act (PIPEDA) governs business practices for the collection, use and sharing of client data. The act was established in 2000 solely for federally regulated industries. Since 2004, it applies to any organization involved in commercial activity. Under PIPEDA, agents and brokers have a responsibility to protect their clients’ information. Except for British Columbia, Quebec and Alberta, all Canadian provinces must obey PIPEDA. The exempt provinces have privacy laws deemed ‘similar enough’ to the federal regulations. The basic provisions of PIPEDA and provincial acts include: • receiving permission to gather any initial personal information from your clients to conduct business; • making your clients aware of why, how and by whom the information will be used;
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• notifying and receiving additional consent from a client if the information will be used for other reasons; and • providing the client access to its information for modification.
THE RISKS Although these provisions sound pretty standard, they carry a lot of weight. A client consenting to provide personal information means the client trusts and relies on your organization to protect that information. In the instance of a privacy breach — including theft, data loss, access denial or wrongful use — the Office of the Privacy Commissioner of Canada or the provincial office serves as a mediator to resolve the issue. Cases can easily be escalated to court action and result in errors and omissions losses. Complaints are escalated to PIPEDA if there is a question about territory lines. Another significant concern: insurance carriers are uneasy, to say the least, about brokers sending confidential client information via the Internet. Just look at the privacy sections on your carriers’Web sites.These companies understand the consequences of a security breach, and they feel strongly that your business should align with their own efforts.
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service, you can always prove who emailed what to whom and when. Insurance brokers use RPost’s services for business correspondence such as client and carrier/broker communications, post-placement administrative correspondence, binding coverage, verifying strategic conversations, terms and conditions, changes in coverage and more. The core of a registered email service is to generate legally verifiable and court-admissible evidence that email correspondence was generated from a
PCA Adjusters We Investigate We Negotiate We Settle
WHAT YOU SHOULD DO To avoid legal culpability and to provide care and professional services to clients, insurance businesses must control and prevent risk by introducing information protection standards and tools.This can include storage solutions and data backups to avoid theft and loss. Among the most important and effective tools is a registered email service to reduce the risk of data loss and privacy breach. One insurance professional said sending email without registered protection is like sending a postcard written in pencil. Registered email services focus on providing email proof and information protection via a paperless approach. RPost Registered Email (www.rpost.com), for instance, specializes in delivering legal email proof of time/date, receipt and content along with email encryption for data protection and authenticated archiving services. Using this type of
sender’s desktop email or directly from an application. The sender has proof of delivery, content and timing of any document or notice sent by email, without requiring any clicked links or special action from a recipient. Technology and the Web continue to furnish an environment that at once offers opportunity and peril.You are advised and encouraged to devise an action plan to avoid accidental or intentional breaches that result in violating your clients’ privacy and your business integrity.
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www.pca-adj.com February 2011 Canadian Underwriter
25
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Billing Transparent
New, proprietary technology has enabled transparent billing for work undertaken on large, complex commercial losses. Ingrid Himmelman
National Business Process Manager, FirstOnSite Restoration
In an emergency situation, especially those involving large commercial losses, the primary focus is mitigation and reduction of business interruption. Crews need to get to work as soon as possible. The Strategic Research Institute in the United States says: “Companies that aren’t able to resume operation within 10 days of a disaster are not likely to survive.” Tracking costs following a large loss or complex commercial mitigation can be tricky. An inordinate number of variables often need to be tracked and incorporated into your billing. Each insurer and customer has different needs requiring unique contracts. On top of that, a number of properties, tenants and owners may require separate, detailed and accurate billing. How, in all of that chaos, when speed of service is pre-eminent, do you accurately keep track of who did what for whom? How does an
26 Canadian Underwriter February 2011
insurer or a commercial customer know the invoice they receive is an accurate reflection of true costs?
INTRODUCING NEW TECHNOLOGY Today, standard practice seems to involve a “getthe-job-and-we’ll-worry-about-the-billinglater” approach.This taxes the memories of managers, who must try to recall details such as how long a crew or piece of equipment was on site. Hunting down such information further delays the billing process. When the bill is presented, a lack of strong backup documentation often leads to a lengthy audit process and negotiation before the final price is settled. Until now, that is. When presented with a bill for a large loss, insurers and commercial customers have three primary questions: • How did you gather your data? • On what did you base your pricing? • How did you get to the final bill? A new software system to the Canadian marketplace (called Time and Materials PLUS and exclusive to FirstOnSite Restoration) answers all three questions with confidence, accuracy and transparency.
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A U.S.-based, licensed restoration professional, someone who has spent countless hours working large loss restoration jobs south of the border, designed and developed the software. Frustrated by the lack of tools available for billing large time and material losses, he designed the software package specifically for this style of billing. It has been used successfully in numerous large loss and catastrophe restoration efforts, including Hurricane Katrina.
WHAT CAN IT DO? One of the system’s most powerful features is an ability to provide insurers and commercial clients with accurate and detailed reports and invoices. This is a result of the system’s ability to deal with and track multiples — multiple units, multiple insurers, multiple crews and multiple buildings for the same loss. With this software, FirstOnSite has the ability to input data across multiple allocations within one major file and then generate a pro-rated bill for each. The company can track and bill each unit, building or insurer file separately, depending on our customers’ needs. For example, there is no need to create 55 estimates for 55 different units. Using this software, users can create just one file that generates 55 individual reports. A second powerful feature of the software is that it enables users to integrate specific contract terms and pricing to reflect a customer’s unique agreement at the beginning of the process. An insurer or customer’s final bill and all related reports will incorporate these details. Furthermore, the software program has an internal audit feature enabling the user to make sure all entries conform to the agreement. A third feature of the system is its speed of service. Data is gathered and inputted seamlessly and daily, making daily reporting possible. Safeguards are built into the software preventing duplicate entries and other common ‘human’ errors.
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Finally, and most critically, the invoice produced for insurance and commercial customers is fully transparent. All data used to produce the final invoice is detailed and provided.
HOW DOES IT WORK? The billing process has six steps, with each step (except the first) driven by the previous step.
Step 1: The Contractual Agreement The first step is to agree to contractual terms, including any mark-ups (P&O), per diems, hotel charges, overtime rules, equipment rates and labour rates. These terms will be incorporated into the job pricing file and drive the final bill.
Tracking costs following a large loss or complex commercial mitigation can be tricky. An inordinate number of variables often need to be tracked and incorporated into your billing.
Step 2: Data Capture and Validation On a daily basis, using formatted crew sheets, trained crews quantify hours worked, equipment installed, materials used, sub-trades hired, etc. The recording process is standardized across the country; regardless of where the loss takes place, all FirstOnSite employees are trained to complete the forms in the same way. At the end of each day, a supervisor verifies all gathered data. Additionally, customers have the opportunity to validate the information if they so choose.The project manager then journals the work completed using the daily summary.
Step 3: Data Input Verified data is input into the program file already tailored to an insurer’s or customer’s contractual terms. The program is designed for team inputting. Multiple individuals can input data to the same file and information is merged together. Safeguards are built into the program preventing any duplicate entries. Step 4: Generate Reports At any given time, reports can be generated showing labour and associated fees, equipment usage, materials and consumable cost. Reports can be printed detailing the entire file, or they can be broken out by specific allocation. Step 5: Audit The program has an internal audit module included. Once the bill has been fully input, all entries can be checked against the terms of the agreement stored in a master file. Any discrepancies are highlighted for review, and can be edited immediately. Revisions to the report can be completed quickly and a new report generated with a few clicks of the mouse. Step 6: Final Bill Insurers or customers receive a final bill consisting of the invoice, supporting reports and all back-up documentation. This would include project manager daily summaries, crew sheets listing hours, equipment and consumables, sub-trade invoices and hotel and per diem charges. Quite simply, the program provides a straightforward way to gather daily site data comprehensively, apply it against the appropriate job/unit/building/area, and quickly produce a transparent and accurate series of reports — all supported and tailored to a specific insurer or customer agreement. From the beginning of the project, the final bill is kept in mind. The software is a powerful tool. The process behind it is even more powerful, and it is a source of pride to be able to offer it to insurance partners and customers.
SYMPOSIUM
2011
Insurance Institute Ontario - CIP Society is pleased to present
Change, Advance, Succeed The CIP Society of Ontario is proud to present the seventh annual insurance industry symposium. This year’s one-day forum, Change, Advance, Succeed, will feature dynamic keynote and seminar speakers. These industry leaders will provide invaluable insights and vision needed for those in the insurance industry to navigate the ever-changing environment of today’s economy. Don’t miss the return of the industry leader panel which will include John Chippindale, Rowan Saunders, Sharon M. Ludlow, Karen Barkley and Lynn Oldfield. This panel of top leaders is a must see for all insurance industry professionals.
SPEAKERS
Breakfast Keynote Speaker
Luncheon Keynote Speaker
Alan Deutschman
Charles Brindamour
Leadership and Change Expert, Author of Change or Die and Walk the Walk
President & CEO Intact Financial Corporation
Alan Deutschman is one of America's most provocative thinkers about leadership and change. In his new book, ‘Walk the Walk’, he presents a compelling new theory of leadership that is changing the way business leaders think and behave. His pathbreaking earlier book, ‘Change or Die’, won universal acclaim both in the business community and outside of it as one of Fast Company's most highly touted cover stories.
Mr. Brindamour began his career with Intact in 1992 as an actuary and held a number of management and executive roles including Senior Vice President of Personal Lines and Executive Vice President, responsible for underwriting, claims, planning, corporate development and investor relations. In 2007, he became Chief Operating Officer until his appointment as President and CEO in January 2008.
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The Future of Gateways Portal technology has come a long way since its introduction in the early 21st Century. But while portals may now be faster and more userfriendly, the proliferation of them is causing headaches for brokers: it’s disruptive to deal with various portals as part of their workflow. Will there ever be a better gateway between brokers and carriers? And will this happen before consumer interaction is added into the mix? By Craig Harris
30 Canadian Underwriter February 2011
Insurance
companies have invested heavily in “robust” portals that stress ease of use, transaction tools and integration with broker management systems — making their original offerings look old-fashioned by today’s standards. Many are poised for the next generation of portals, with newer features like consumer-broker bridging, mobile applications and collaboration tools. But the lingering question still exists: will any of this satisfy brokers?
February 2011 Canadian Underwriter 31
COVER STORY
The Future of Gateways First-Generation Portals Like any technology, insurance company portals for brokers have evolved significantly over the past decade. The earliest iterations of these online sites typically began in the early 2000s and took off mid-decade, and they reflected much of the Web business ethos of the time — e-document provision, static one-way communication and laborious user interfaces. Company representatives widely acknowledge these initial portal incarnations had some positive traits, but also represented a strong downside for brokers in terms of workflow, training and technology. “The earliest portals did provide access to simple transactions, forms and information, but at a cost,” says Kathy Curran, manager of business solutions for The Economical Insurance Group (TEIG). “Brokers were forced to learn the nuances of each portal, to sign in manually and to navigate through proprietary screens and fields. In other words, (they had) to adopt one-directional workflows that differed amongst carriers and forced brokers to always leave their systems and come to the carrier.” These first-generation portals added value, but they did not take into account broker workflows and their complexity increased training costs, adds Jack Ott, senior vice president and chief information officer at Intact Insurance. “The main connecting technology at the time was ‘screen scraping,’ which was inefficient and provided an unfriendly user experience.” (In the original version of screen scraping, visual text data was collected through a computer display terminal’s screen — as opposed to reading the data from the computer’s memory, for example, or through an auxiliary port.) The challenges of signing on with passwords to multiple company portals, understanding the unique aspects of each site and then being unable to complete transactions in a once-anddone format have frustrated brokers for years – points many insurers readily concede. “Insurance companies have been slow on the uptake as it relates to portal technology, especially compared 32 Canadian Underwriter February 2011
to the broader financial services industry,” notes Debra Ambrose, senior vice president of national sales, marketing and broker operations for Aviva Canada. Speed forward to today. Several sources contend that more functional and flexible broker portals have grown to become a crucial competitive tool for property and casualty insurance companies.
The earliest portals did provide access to simple transactions, forms and information, but at a cost. Brokers were forced to learn the nuances of each portal, to sign in manually and to navigate through proprietary screens and fields. “I have seen a major shift in portal technology,” says Katherine Evans, vice president and chief financial officer of York Fire & Casualty Insurance Company. “When portals first started, they were very insurance company-focused and based on what kind of information insurers needed to gather. Brokers can’t deal with a portal in that way — they are often on the phone and need answers right away to serve their customers.” Carrier portals now have richer features, such as pre-populated fields for data entry, more intuitive interfaces and automated help and response services.
They also offer greater functionality across the full spectrum of the policy lifecycle — in transactions for quote, new business, inquiry, policy change, renewals and claims. “Where we are now is that carriers have moved business automation and business rules to the portal, including integration of data and reports from third-party providers,” says Martina Conlon, a principal in the insurance practice of consulting firm Novarica, which published a report, Best Practices in P&C Agent Portals, in April 2010. “More transactions are being pushed through the portal for personal and small commercial lines. In some cases, we have seen insurers process as much as 60%80% of this business through portals in no-touch transactions.” Conlon describes portals in the property and casualty industry as “relatively mature technology . . . As many carriers already know, a (broker) portal is a musthave and a more robust portal will help increase both growth and retention.” Today’s Portal Technology Today’s property and casualty company portals have to address the reality that some consumers want to conduct transactions fully online, while others prefer a combination of electronic convenience and in-person consultation with a broker, according to Glen Piller, president of iter8. “There is a level of automation and then an option for manual contact,” he says. “Modern portal solutions have to support both.” Curran says TEIG’s portal, Broker Extranet, offers solutions such as real-time PDF billing, claim and policy inquiry and quoting and binding, among others. It also gives brokers the ability to access and export policy documents and notifications. “As an industry, the most significant evolution in company portals overall has been the increase in availability of true real-time transactions, the provision of issuing authority for brokers, investment in reducing duplicate entry, more types of transactions made available and the use of third-party integrators or direct integration agreements to extract data from the broker or
Legacy
le•ga•see / noun / obsolete . handed down from the past / adjective / of or pertaining to old or outdated computer hardware, software, or data that, while still functional, does not work well with up-to-date systems.
Legacy Replacement le • ga • see ri• plās• mənt
/ noun / the use of Duck Creek products and processes to take the risk out of migrating to modern technology, enabling insurance carriers to roll out new products faster and leverage their investment in existing products. see: Duck Creek Technologies
Duck Creek Policy Administration™ • Duck Creek Rating™ • Duck Creek Billing™
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COVER STORY
The Future of Gateways commercial management system (BMS/ CMS) and pre-populate it into the company’s portal,” Curran notes. Ott says one of Intact’s goals is to make portals more transparent and less intrusive to the broker. “Today Intact is working toward a smaller portal footprint, which is more mindful of broker workflows and certainly less demanding in terms of training,” he says. “We can now turn to Web services to link applications and services in a way that allows intuitive and easy navigation.” As one example of a “lightweight portal intervention,” Ott points to his company’s recent SaversPlus system, which will be rolled out nationally this year. Intact introduced “transaction wizards” that intelligently present only the data fields brokers will need for a certain transaction. “Our vision is that the portal becomes more adaptive to the business context, rather than a big application you get lost in.” Ambrose says her company re-launched its Aviva Partners broker portal in 2010. The portal now includes new transaction tools, content and a “marketing hub that allows brokers to brand their names and logos to various marketing programs. We have made a concerted effort over the last two years to focus on the needs of our brokers and to emphasize ease of doing business.” At York Fire, Evans says the company’s “Gateway” insurance portal has emphasized accessibility for brokers through their BMS. “We have seen that connectivity to portals has been a real competitive advantage for some BMS vendors,” she says. “We want to give brokers access to policy and customer information immediately and we think brokers should be able to do that right from their BMS.” An insurer’s goal should be to deliver the right tools in the entire portal, tools that enable outstanding customer service and inspire confidence and loyalty in customers, says Mark Witt, vice president of business development for Duck Creek Technologies. “Enabling brokers to quickly respond to customer inquiries across the entire spectrum of business requires access to the right tools and improved efficiency in round-trip communication.” 34 Canadian Underwriter February 2011
Brokers’ Critique of Portals For all of this activity and investment in portal development, several highprofile broker groups are still critical of these online company offerings. Many brokers say their issue is not with the evolution of portals, but with the very
As an industry, the most significant evolution in company portals overall has been the increase in availability of true real-time transactions, the provision of issuing authority for brokers and investment in reducing duplicate entry. concept of the portal itself. “Portals were created by insurance companies to deal with the problem of their own backend legacy systems,” says Wendy Watson, a vice president with the Precept Group and chair of Ontario Real Time Brokers in Transition (ORBiT). “It was the most economical way of remodeling a front-end system. It did not work then with how brokers do business and it still does not work now.” A clear example of broker frustration is the nagging issue of multiple sign-ons and passwords for company portals, according to Watson. “One of our working groups at ORBiT is focused on
security and sign-on; this is our biggest problem,” she says. “Brokers with multiple markets are still having to sign-on and use different passwords. This is just not efficient or workable, not to mention the security issues.” The Centre for Study of Insurance Operations (CSIO) has a proof-of-concept industry standard for single sign-on and password security, but Watson says insurers cannot necessarily agree on how to use it. Portal sign-on and security is an ongoing sore spot for many brokers, some insurers acknowledge. “Security continues to be a concern,” Ott says. “CSIO is showing good leadership and I think we will move closer to an industry standard in 2011, but clearly password management is an irritant for brokers and a necessity for carriers. We need to find the right balance.” Brenda Rose, vice president at Firstbrook Cassie & Anderson and a technology champion with the Insurance Brokers Association of Canada (IBAC), says the position of the national broker association is clear: “Brokers should not be obligated to use a company standalone portal, full stop. I think now more companies are realizing that (portals) are, at best, temporary solutions. Transactions in the industry require an information exchange between the BMS and insurer systems directly.” IBAC is currently working on a data exchange project with six participating insurance companies — Aviva Canada, The Dominion of Canada General Insurance Company, The Guarantee Company of North America, Intact Insurance, RSA Canada and TEIG — to create a common platform for straight-through processing of transactions from broker to insurer back-end. She says the ongoing SEMCI project should have initial results in “a couple of months.” Getting the Message Insurance carriers are showing signs of recognizing these messages from brokers, at least in theory — particularly in the areas of legacy systems and a smaller role for the portal. For example, one promising development, according to Watson, is the fact that
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The Future of Gateways several companies are either starting to — or are in the process of — replacing their legacy policy administration systems. Ambrose notes Aviva Canada “has committed to a massive business transformation” of replacing its legacy system over the next five years. “This is our Number 1 priority in terms of technology investment,” she says. Curran says TEIG is in the process of replacing its legacy policy administration systems with a Web-based system “to facilitate XML-based transactions, increase access and use of Web services and hence, the ability to complete realtime transactions in a variety of ways.” However, insurers caution this process will take time. “There is opportunity to evolve the function of portals to the point where they are in the background and not the front end, or even utilized at all,” Curran says. “However, to do so requires significant investment and evolution in the carrier’s own back-end systems and technology. (This) is not an overnight accomplishment.” The notion that insurance company portals will become extinct in the near future is wishful thinking, according to several carrier and technology representatives. “The point is that the carrier should stay in the background, “Ott says. “And if a small portal footprint can achieve this, I think most brokers will be pleased. I know some brokers are calling for complete standardization to the BMS. It sounds good in theory, but in practice it pulls us all toward the lowest common denominator; the broker management systems are not ready for it. Companies need the opportunity to differentiate their products and functionalities up to a point. We think a reduced portal footprint is the right approach for the mid-term.” Evans argues that a single platform for all transactions would water down the functionality of individual company portals. “Portals are a competitive advantage for insurance companies,” she says. “Some companies have invested a lot in their portals, others have not. Some companies are at different stages of functionality. To try to get them all on the same platform is pretty much impossible.” 36 Canadian Underwriter February 2011
If some type of singular portal experience truly added value for all insurers, then it would already have happened, Witt contends. “The truth is, it doesn’t benefit the insurers to participate in such a centralized offering. And because it doesn’t benefit the insurers, then it won’t ultimately benefit the agents or brokers.”
Portals are a competitive advantage for insurance companies. Some companies have invested a lot into their portals, others have not. Some companies are at different stages of functionality. To try to get them all on the same platform is pretty much impossible. Exploring Alternatives The question thus becomes: What is the alternative? “As an industry, there is no single solution today to support one workflow using a single technology platform that will satisfy every carrier and broker,” Curran says. “Brokers collectively are still coming to an understanding of what that workflow looks like. “ In the meantime, insurance companies are looking at emerging opportunities in their broker portals. These
might represent the “next generation” of portal functionality, with a far greater emphasis placed on the consumer. “For the most part, policyholders have tolerated the technology limitations of insurance,” Piller says. “But that will change. As more and more people move online, you will see many of them expect to conduct all transactions, from beginning to end, in that environment.” Curran says changes to consumer behavior and expectations mean consumer-facing portals facilitating data exchange between the consumer and the broker represent a significant business opportunity. “This concept is not a future vision,” she says. “Direct writers have this today. The broker distribution channel needs it to compete.” TEIG has developed a broker-branded consumer quoting, purchasing and client self-serve Web site called Insurance on Demand, according to Curran. “It gives brokers the technology to create an online presence with their own branding and facilitates the exchange of data between the consumer and the broker.” Aviva Canada is also developing a consumer portal to be launched in Spring 2011, Ambrose notes. “We have a lot of people visiting the Aviva Canada Web site, and we are looking at how we can offer consumers a quote and then redirect them to a broker, whether by geographic location or type of business,” she says. “Also, there may be opportunities for consumers to pursue self-service options for things like payment and inquiry. Again, our focus is on ease of use for our brokers, and for our customers.” Conlon says Novarica has noticed that large carriers are placing a higher priority on developing consumer-facing or consumer-broker bridging solutions in their portals. However, some carriers distributing through independent brokers “often hesitate to implement online quoting because they fear they will alienate their brokers,” she says. “They have not figured out a proper channel preservation strategy.” Novarica recommends a solution “that will allow shared components across your consumer and broker portals. Maximize re-use of screens, product definitions and
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The Future of Gateways integration with Web services and core systems. Use common functional components such as the rating engine, document creation and document management to simplify your environment.” Witt notes that many carriers are pursuing these goals, with some success. “We see insurance companies responding by embracing the power of a well-designed portal to serve their customers,” he says. “Even customers with a broker can still go online and look up their policy and, perhaps most importantly, quickly re-print policy documents. This seamless experience with the company is at the heart of a good portal strategy and we’re seeing successful companies implementing this strategy.” Future Opportunities Another emerging trend in modern portal technology is the use of mobile applications (apps), which have been slow to take hold in property and casualty insurance in Canada. “A big issue is whether brokers really adopt iPads and smart phones and what functionality they are going to bring to insurance transactions,” Conlon notes. “Most portals have the ability to download or print a certificate of insurance. This could be done through a mobile app and emailed to a client, for example.” Piller sees mobile applications as a “simplified extension of portals. Insurance companies may offer these as a differentiator, and it is very trendy to have a mobile app. It may provide some ‘stickiness’ for certain consumers, but there will be limited functionality.” The explosion in mobile technology will enable portals to extend their reach and capabilities,Witt says. “Building technologies that make it possible for brokers to transact higher volumes of business with a carrier easily and successfully will lead to greater value for both broker and insurer. Portals should naturally be at the heart of this extensibility.” And while much of the focus of portal technology has been on personal lines and small business, opportunities exist in mid to large commercial lines. “There is a big difference between personal and commercial lines, 38 Canadian Underwriter February 2011
and what portals can do,” Piller notes. “It is a far more complex project in commercial insurance.” He adds that only about 20% of commercial lines insurance operations have fully functioning portals.
Insurance companies created portals to deal with the problem of their own back-end legacy systems. It was the most economical way of remodeling a front-end system. It did not work then with how brokers do business and it still does not work now. Online collaboration tools between brokers and underwriters such as collaborative document authoring, instant messaging and chat features represent a potential boost to commercial efficiency, according to Conlon and Novarica. “Online broker/underwriter collaboration and documentexchange functionality will likely be areas of enhancement over the next few years in large commercial broker portals,” Conlon says. Even though some brokers sharply criticize their limitations, property and casualty broker portals will continue to fulfill key functions in the short term, according to many insurance company
representatives. There is also a recognition that portals have to evolve further. Insurance companies will be vying for ways to better match portals with broker workflow and make them more transparent in the mid term. “The most promising developments are not necessarily technological in nature, but instead driven by new standards and a clear vision,” Ott explains. “Broker associations and industry groups such as ORBiT have given us a much more precise definition of what the ideal solution should look like. As we formulate our strategies at Intact, we are now able to measure them against well-defined principles, resulting in better alignment in the future.” Major investments for insurers associated with replacing back-end legacy systems and working with broker groups on a common data platform will take time. Few are expecting a major breakthrough in this area in the next year or two. A more immediate pressure facing broker-distribution insurance companies is aggressive competition from direct writers — including price wars in regional markets, heavy advertising and a ubiquitous Web presence. This competition, sources say, will spur companies to give brokers the tools to compete in the online world. The next generation of portal offerings, characterized by broker-consumer contact and insurance company systems seamlessly built into the background, is already underway. It will likely be a key source of carrier differentiation in the months ahead. “Brokers and carriers need to rethink the purpose of portals, not only what they were originally created for but more importantly, the audience they serve,” concludes Curran. “Company portals were designed to support the exchange of data between the broker and the carrier. This need absolutely remains and is being satisfied, to some degree, by the evolution of the portals in recent years. What other audience is there, then? The allimportant consumer.” How quickly can portals adapt to meet the needs of this audience?
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Part II of a Two-Part Series
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Intensive Care
This is the second part of a two-part article discussing the real, potential and anecdotal effects of Ontario’s auto insurance reforms on access to health care for auto injury claimants. Part I of the article, published in the January 2011 edition of Canadian Underwriter, looked at the impact of the Minor Injury Guideline (MIG) and the Minor Injury Cap from the perspective of health care providers. Part II of the article, reproduced below, analyzes the new $50,000 med-rehab benefit, independent examinations and attendant care benefits. In addition, it outlines what the industry is currently doing to track and address these emerging issues.
Teresa Riverso President, Supportive Environments Inc.
MED/REHAB BENEFIT Under the new SABS, as of Sept. 1, 2010, a claimant is limited to $50,000 for med/rehab goods and services. Even if additional coverage had been purchased post-Sept. 1, at the time of renewal of his/her auto insurance policy, a claimant would not necessarily have access to the greater amount of coverage if he/she has been diagnosed with a minor injury. This $50,000 has to cover many potential goods and services — including various therapies, home modifications, medications, assistive devices, hospital bed rental, mobility aids (including wheelchairs, etc.), all of which can very quickly deplete available funds. This does make providers think about what are the essential services and how best to optimize funds available to meet a claimant’s needs. The problem arises when essential services have depleted the $50,000 and the claimant requires ongoing therapy or other goods and services.What then? Right now, it is too early to tell.
40 Canadian Underwriter February 2011
In some instances, claimants and/or their legal representatives might hinder the early delivery of essential services because they fear the client might run out of benefits prior to the end of the 104-week period (at which point they may apply for a catastrophic injury determination).This is especially true of cases in which claimants have serious injuries and intend to apply for catastrophic determination at the end of the 104-week mark (e.g. traumatic brain injury, multiple orthopaedic injuries with permanent impairments). Some of these claimants take only the bare minimum in treatment or spread it out over extensive time periods, potentially having a significant impact on recovery. In other situations, claimants are being denied further treatment. Some report being told by the adjuster that he or she does not think the treatment is warranted. This is another example of adjusters making medical judgments related to the need for ongoing therapy, raising a number of ethical, medical and legal issues.
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Under the new SABS, an adjuster must provide a “medical and other reason” for the denial. An adjuster cannot base the decision strictly on what he or she deems to be “not reasonable or necessary.” Nevertheless, more often than not, the latter seems to be the reason given. Also, the insurer does not have to have an independent examination done when denying an OCF-18. Given that rebuttal reports have been eliminated from the SABS, the claimant’s only recourse after a denial is mediation, thus further delaying therapy.
INDEPENDENT EXAMINATIONS (IE) Under the new SABS, IEs are at the discretion of an adjuster after denying an OCF-18. The findings of the IE are not binding.The cost for IEs does not come out of the med/rehab benefit. Generally speaking, fewer IEs appear to have been done since Sept. 1, 2010. Those IEs that have been done appear to have been done face-to-face (and not by means of a paper review).This results in the additional cost of travel expenses and travel time for the IE provider. From an IE provider perspective, the amount of time required to perform an IE may be greater than that required by the treating therapist. This is because the IE provider may have numerous documents to review that the treating therapist does not. Providing IEs requires a certain level of expertise demanded by both the insurance industry and rehab community. However, IEs are capped at $2,000, with the same inclusions as per the assessment cap (as described in Part I of this article: Please see ‘pg 20,21 Auto Part 1’, Canadian Underwriter, January 2011). Preliminary evidence from the rehab community suggests some potential emerging trends, including the refusal to do IEs within the cap, the breakdown of assessments into component parts (which can then be billed under the cap separately) or adjusters’ use of under-qualified IE providers who agree to do the IE within the $2,000 cap.
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ATTENDANT CARE BENEFIT Under the new SABS, an injured claimant is only eligible for $3,000 per month of attendant care if he or she has sustained non-catastrophic injuries (this increases to $6,000 per month for catastrophic injuries). There are no attendant care benefits for minor injuries sustained in motor vehicle accidents (MVA) occurring on or after Sept. 1, 2010 — even if optional benefits were purchased at renewal of policy postSept.1, but before the MVA. The emerging issue is again in the instance of a serious injury: a claimant is trying to stretch the available dollars over 104 weeks, at which time he/she
Under the new SABS, an adjuster must provide a “medical and other reason” for denying a treatment. An adjuster cannot base the decision strictly on what he or she deems to be “not reasonable or necessary.” will apply for a catastrophic designation. Prior to the end of the 104-week period, if the dollars are not enough, the claimant will have to pay out of pocket with a hope to re-coup the money. As a result, some claimants are doing without the care they need, or the responsibility may fall to family members. A claimant must demonstrate an economic loss for persons providing attendant care, unless the providers have been hired from an outside agency that offers such services. Consider the example of a spouse who is currently at home looking after small children. Let us say he or she now bears the additional burden of providing personal care to his or her spouse. In this example, there would be no demonstrable economic loss. Therefore, there would be no reimbursement, even if additional attendant care benefits were purchased. In one particular case, a spouse had to
take time off work to provide attendant care to his wife.The adjuster reimbursed the spouse for 80% of net income instead of the amount on the Form 1.
WHAT IS BEING DONE? The Coalition Representing Health Professionals in Automobile Insurance Reform is in ongoing discussions with insurers, the Insurance Bureau of Canada (IBC) and FSCO to address these and other emerging issues. They have jointly produced a ‘Question and Answer’ document based on a 2010 Auto Reform Webcast held in June 2010. It is available on the IBC website. Service providers and adjusters are strongly recommended to access this document to clarify and answer questions that arise in day-to-day practice. Currently, a shortage of data exists to help guide decision-making and policy development in the insurance industry and the rehab community related to diagnoses, treatment, costs, etc. The insurance industry is attempting to rectify the problem through HCAI. According to Viivi Riis, senior health advisor to IBC, HCAI is currently in the process of being fully implemented. However, there appears to be a problem with how clinics or providers are using the ICD10-CA codes upon which data gathering related to injury categories would rely. These problems need to be addressed before data gathering can begin. Willie Handler, senior manager of the automobile insurance policy unit at FSCO, is hopeful HCAI can begin to collect data in 2011. Under this timetable, the first set of data would be available in 2012. It is hoped that with ongoing discussions and working together in the spirit of cooperation, a number of issues can be resolved to the benefit of the injured claimants. It is hoped these solutions will answer the need of service providers to provide effective and efficient interventions, as well as the need of the insurance industry to contain costs and stabilize the system.
February 2011 Canadian Underwriter
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Data
Migration Vice President, Product Innovations, iter8 Inc.
A risk management approach to data conversion can provide useful insights into both planning and resourcing conversion tasks. Many approaches exist for tailoring data conversion tasks to meet the individual needs of a company and a project, but a risk management approach can provide useful insights into both planning and resourcing conversion tasks. Data conversion can be so infrequent it can skew the organizational risk management thinking and not get the attention it deserves. When traditional risk management approaches — i.e. risk avoidance, risk assumption, risk transference and risk mitigation — are contemplated, it seems at first glance risk transference may be the best approach for conversion. This is due to the high impact and medium likelihood of a failure and often the low internal IT knowledge base or experience in this area. Let’s examine this problem and determine if this thinking is accurate, recognizing that this issue is complex and approaches are unique to each carrier.
42 Canadian Underwriter February 2011
MANUAL DATA CONVERSION Using a policy data conversion example, here’s the math: • Policies in force = 120,000. • Working days/month = 20. Assume an equal distribution of policies monthly. The calculations show 6,000 policies per month or 300 policies per day need to be processed. If one person can process 20 policies per day, then 15 people are required for one year to do the full conversion manually. If one full-time employee costs $75,000 per year, then the cost of conversion is 15 x $75,000 = $1.125 million, or a little under $100,000 per month. This includes all of the detailed scrutiny per individual policy, updating and actions taken on all policies and exceptions and assumes an ‘on-renewal’ approach to conversion. Benefits to this approach include: • re-underwritten files; • standardized information sets; • more predictable and visible timeline; and • no costs associated with a software development lifecycle. Risks to this approach include: • finding, deploying and managing a group of
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Debbie Olsen
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knowledgeable staff (in this example, 15 people), either pulling them from normal day-to-day activity or hiring and training them; • increasing policy counts and/or adding historical transactions quickly becomes prohibitive (any difficulties doing these things with 15 staff become exponentially more complex with 150 or 250 staff); • manual data entry is error-prone; and • two systems are operated, maintained and used during the migration, decreasing productivity while at the same time increasing complexity, costs and risk.
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Benefits to this approach include: • auditable, accurate processes produce an accurate result; • mid-project changes can be managed and dealt with in-flight, and applied for all policies; • experience from “other carriers” can be applied in the form of vendor resources, and in proven software; and • internal IT resources can be deployed on other projects. Risks to this approach include: • finding a proven product and methodology to integrate with internal
AUTOMATION THROUGH THIRD-PARTY SOFTWARE Under this scenario, a vendor provides or uses data migration software to fully automate data conversion, implemented by a combination of both external and internal resources. The cost of requirements, development and testing, using ‘expert’ resources billing at hourly rates, can easily add up. Using our previous example, let’s say the vendor supplies 15 people who bill $1,000 per day for 20 working days in a month.That’s a monthly bill of $300,000 —– more than triple the inhouse cost. Of course, a valid counterargument is that 15 ‘expert’ resources are not required; only a sub-set of this number is needed. No matter how many external resources you have, you still need inhouse people who understand your existing data, format and technology (a.k.a. ‘the target’), as well as requirements for your new data format and technology (a.k.a. ‘the destination’). A typical issue in conversion is that the data is populated correctly into the destination, but then it doesn’t react or transact in the same way as data that was populated through the sequential manual data entry process that originally created the data. The need for in-house resources to complete testing is absolute for a successful conversion. These are the internal ‘experts,’ and are best considered that way. Internal experts will still likely be the ones to identify and resolve exceptions to the automated process.
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Data conversion can be so infrequent it can skew the organizational risk management thinking and not get the attention it deserves. processes and that can deliver anticipated results on time and on budget; • exceptions and unique situations must be dealt with manually; • costs can escalate without proper project management to ensure visibility; and • software vendor staff must understand insurance issues and work closely with internal team.
HYBRID APPROACH The ‘hybrid’ approach is to automate the majority of the solution, but not all of it. This can be done through analyzing what data can be populated ‘easily,’
via automation, and then allowing the ‘difficult’ and/or high-risk data automation to be completed manually.This approach balances costs, risks and timeliness of the partly automated solution with the resource costs and risks of the manual approach. This hybrid approach accommodates the typical reality that there will always be exceptions to successful conversions. These exceptions can be accounted for in a plan, so the conversion plan is exhaustive for all cases. The number of exceptions in the first ‘round’ of converted data is generally the largest, so the plan to handle them manually or add them to the automated solution for the remaining months is an available alternative. Analyzing policy distribution across the months can also result in a planned schedule, producing a productivity lift as the conversion proceeds. For example, a partially automated solution converting the first three months of data, representing 25% of the conversion, can be timed to begin so it represents the smallest percentage of policies in force. Analysis of the exceptions, errors and issues can be used to modify the conversion process and address the largest number of exception cases and/or the highest-risk cases. By the time the largest volume of policies is scheduled for conversion, the majority of exception cases have been automated and/or addressed. In addition to the benefits and risks of each approach, other benefits include: • the speed, repeatability and auditability of the automated approach is being combined with a lower-risk, more predictable manual approach; and • incremental results will motivate the team, and ensure accuracy. Risks to this approach include: • it still uses internal experts and third-party resources, which can increase costs; • problems inherent in both manual and automated approaches are represented in the hybrid approach; and • if third-party resources are not knowledgeable about insurance issues, problems will persist.
Advantage: Innovation Gain insight on the hottest risk management topics at RIMS 2011 Annual Conference & Exhibition. You’ll find more than 400 industry leaders sharing best practices and tricks of the trade. No matter what your level of expertise, you’ll benefit from the amount of information shared in the keynote presentations and educational sessions. Design an educational experience based upon your needs—120+ sessions to choose from! Take home strategies and innovations that can impact your bottom line. Discuss what’s on the horizon for the industry and how it will affect your organization.
The Early Bird discount expires March 4!
Advantage:
RIMS Vancouver | May 1-5
www.RIMS.org/RIMS2011
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-Serve -Serve, Self-Serve In the future, online broker services need to be offered in a full-serve, self-serve environment, in a system that brokers own and control. Scott Andrew President, CEO, Custom Software Solutions Inc.
Over the past few years, people have been talking about the need for brokers to embrace the “new” social media. Facebook, Twitter and LinkedIn are rapidly growing services, and we will find a need for them in our industry. But the focus on embracing their offerings may have taken the spotlight off of the need for brokers to concentrate on servicing new and existing clients in an automated online environment. The broker’s primary competitors, direct writers and banks, continue to move forward and expand their online platforms and offerings. The traditional broker is already seeing an erosion of his or her market share with no sign
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of this slowing. Much of this lost market share can be attributed to online services provided by the competition. With our competitors already ahead in the race, it will take little time for them to jump further ahead by launching services on mobile devices, thus extending the automated service gap between traditional broker and direct writers. Without question, consumers will continue to purchase products and services online. This reality will eventually encompass even the relationship-driven world of the insurance broker. Without a plan to compete online in a true fullserve, self-serve environment, the future existence of the broker channel will be in jeopardy.
LIMITATIONS OF ONLINE SERVICES Most brokers have moved forward and established a Web presence, but the online offering on Web sites is very limited. To date, we have seen development from established software vendors limited to quoting. In the absence of
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available online tools for brokers to deploy, insurance broker associations and insurance companies have developed online systems to fill this void. Although admirable, these initiatives will never fully get brokers to where they need to be. The associations’ initiatives to date have been focused on quoting and have not addressed added functionality. The individual insurance company initiatives have the potential to offer more functionality, but they are restricted to offering the online services only to the clients the broker has placed with that company. With insurance company initiatives, the broker ends up turning control of the online experience over to the company. When the broker remarkets the client, they are faced with moving to a different insurance company that may or may not have an online presence. If the new company has online tools, the client will be faced with different interfaces and new sets of user names and passwords.
FUTURE VISION In a perfect world, the broker vision for future online services should include everything they do today as a full-serve broker. The services need to be offered in an online self-serve environment, in a system that brokers own and control.This future full-serve, selfserve model should include the following as a start: • Anonymous quoting for home, auto and rateable commercial lines, including the ability to calculate replacement costs on personal dwellings, outbuildings and commercial buildings. • Online ability for the user to move forward with the anonymous quote and become a new secure client with a bound application.
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• Electronic delivery of the new in-
surance policy documents in real time, if available, based on the rules of the insurer, and/or the electronic delivery of the policy documents at a later date, once the broker has received them. • Electronic delivery of renewal documents to the client. • Client will have online access to perform all policy transactions including endorsements, cancellations and reinstatement. • Client will be able to view policy and related documents, billing information and claims information. • Online account payment. • Online claims management.
The focus on embracing the offerings of the “new” social media such as Facebook, Twitter and LinkedIn may have taken the spotlight off of the need for brokers to concentrate on servicing clients in an automated online environment. This vision of online services, owned and controlled by the broker, may appear to be a stretch. But many of the tools and most information required to make this work reside within the broker’s management systems, depending on the solution the broker employs. The management systems need to be fully integrated to work as one and must include tools to deliver the services identified above. Quoting, rating and underwriting systems need to be integrated into business and accounting systems, all
wrapped in a robust client relationship manager. If commercial is to be included, it must be fully integrated into the solution. Once you have the management systems integrated and operating as one, the extension to online services is not a huge lift. Exposing the information and automation tools in a secure online environment to the end client becomes the next step for the broker management system providers.
NEXT STEPS Broker management system (BMS) providers will require assistance and participation from insurance companies and brokers to move forward on this next step in service. Insurance companies will need to be involved in development, because their systems would have to be automated to provide additional processing capabilities and to allow brokers’ systems access to certain types of information. To deliver a system as described, brokers will need to be committed financially to assist in development and fully committed to deployment to the end client. Delivering a usable experience to the client and driving costs down for brokers and insurance companies will rely on how well the integration between the different parts in the delivery chain work — client, broker Web site, broker management system and insurance company. The extension of full service online will happen over the next few years. The end client will have the ability to perform many of the transactions described in the list above. For the broker to ensure their clients’ future success, providing an online full-serve, self-serve service will be important. The lift will be significant but so will the rewards.
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Putting the
‘Flow’
Back into Workflow
Pat Durepos President, Keal Technology
Peter Silk
Senior Vice President, Business Processes, Lombard Canada.
Insurance workflows should be easier. People working within the day-to-day operations of a brokerage or an insurer would not dispute this statement.The unique complexities of commercial insurance can make daily workflows incredibly challenging. This is why broker management system (BMS) and insurance company integrations are so important to help us all compete more effectively in our day-to-day activities. Brokers, insurers and broker management system vendors all share one common goal: to increase the ease of doing business together, thus gaining efficiencies, reducing costs and providing faster and more meaningful service to our clients. We all approach the same insurance transaction from different perspectives. Our actions often overlap in execution, but they are always unique to our respective business. Brokers interact directly with the client. Insurers underwrite the risk and provide the necessary capacity to cover the insured. BMS vendors provide the tools to manage the brokerage’s daily tasks — quotation, submission, accounting or carrier integrations — effectively. All of us are interested in
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handling the transaction easily, but each of us must ensure our specific needs and requirements are met. These overlapping areas of handling the transactions have consumed a lot of time and resources over the years. The ongoing quest for single entry, single sign-on connectivity between brokers and insurers — and potentially a single system — remains the ultimate pursuit within our industry. What has stood in the way of this goal? The need for each of us to gather and store data related to the client; proprietary systems; high transaction counts; and the complexity of commercial lines insurance. Have we made inroads to meeting our ultimate aim? Absolutely. We have seen the development of industry standards and the creation of hardworking industry groups to find common ground and understand each others’ requirements — all with the goal of working more efficiently together and meeting our unique needs. Is there one simple solution available to all of us? No. But clearly we must continue to work on ways to improve the ease of exploring business opportunities together.
Illustration by Philippe Béha/www.i2iart.com
The unique complexities of commercial insurance can make daily workflows incredibly challenging, highlighting the importance of broker management system (BMS) and insurance company integrations.
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WORKING TOGETHER With this goal in mind, Lombard Canada and Keal Technology sought to address this challenge together. From Lombard’s perspective, it was important to work with a partner who understands the complexities of commercial insurance for policies of all sizes and coverages.We needed to partner with a vendor that shared our vision about how we can reduce double entry for the broker in high-transaction areas such as renewals and ultimately endorsements. It was important for us to work through the various roles our respective platforms would play, and then develop true commercial lines download capabilities within the broker’s work environment. Along the way, we conducted broker focus groups to ensure we were meeting the needs of our mutual clients. Lombard and Keal have long supported the concept of integration between their respective systems.The challenge has always been how best to achieve this while at the same time ensuring data integrity and providing efficiencies to the broker, company and client. Using Lombard’s Lincq system, brokers can now download Lombard’s Business Choice renewal data directly into Keal’s commercial management system (CMS), comXP, along with a complete PDF of the policy. This allows any producer or owner in the office to see real time data on the client, along with the complete PDF of the policy, without needing to leave their desk or sign onto another system.
COMMERCIAL INSURER-BROKER INTEGRATION Insurer and BMS/CMS integration brings the following things to the broker: • more efficient, streamlined workflows greatly reduce the manual data entry often required to manage clients; • quicker and easier access to information, including the declaration pages; • improved time management; • enhanced customer service through access to real time information on mobile devices; • paperless processing to minimize E&O exposures;
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• increased data integrity. Data errors are reduced, since the download matches what’s on the carrier’s portal; and • training consistency. When transactions are initiated or completed directly in the CMS, the learning curve isn’t as steep for brokerage staff and internal workflow procedures are easier to enforce. “Before using the comXP and Business Choice integration, our Client Manager’s workflows were manual and time consuming, says Keal and Lombard client Wendy DaSilva, CEO of Cornerstone Insurance Brokers Inc. “The integration allows us to download the dec [declaration] page directly into comXP, which has given our commercial team more time to sell and service clients.”
MAKING TRANSACTIONS SEAMLESS If we believe that ultimately the complete transaction route should start in the broker/commercial management system where the business resides, move into the insurance company system to be underwritten and quoted, and returned back directly into the CMS for real time inquiry by the producer, the real question is to how best to achieve this? What roles do everyone’s systems play in this transaction? For example, Lombard’s Lincq system performs edits and checks for all sorts of regulatory and non-regulatory reasons. Rather than duplicate all of those in comXP, we needed to recognize the flow we wanted the business to take, while at the same time ensuring the broker entered the data only once. Keal is working with various carriers and has already developed each phase of this round trip transaction.
Software development is sophisticated. As much as we’d like to do it all at one time, it’s just not feasible. Selecting the high-transaction areas such as renewals, which include the complexities of multiple locations and different coverages, has an immediate benefit for the broker.
LEVERAGING MOBILE TECHNOLOGY Data download is only part of the solution.To increase the ease of doing business for our mutual clients, we wanted to leverage the power of mobile devices — including Apple and Android mobile digital devices like iPad, iPod touch and iPhone. We know the emerging power of these devices is due to the mobility, accessibility and flexibility they offer a producer. Imagine visiting a client armed with nothing more than an iPad and being able to have a complete renewal discussion purely from a mobile tablet. No more scribbled notes and having to dig out data once back at the office. A Keal client recently started offering new hires the choice of working in a traditional, office-bound, paper-rich brokerage or a new mobile, paperless office using tablets. The different work styles appeal to different generations. Such a choice is an important factor in employment incentive and retention, especially for younger producers. Another critical variable in this equation is broker adoption of new integrations. Brokers are trying to adapt to technological change, but it’s proving to be a challenge. Keal recently asked presidents, chief information officers (CIOs) and chief technology officers (CTOs) to express in percentage terms how many new technological developments brokers adopted. The average answer was a mere 20%. One CTO stated that due to the lack of broker adoption, they were re-evaluating any future development. Insurance workflows should be easier. We believe we’re making significant inroads towards this goal by working together, listening to the needs of each party and delivering efficiencies that benefit brokers immediately.
Congratulations to our Change For Change Winner! DAS Canada has only been on the Canadian property and casualty insurance industry landscape since June 2010, but already it has shown its ability to create change in the marketplace, about $1,765.42 in change, to be exact. This represents about 20% of a total of $9,000 in change collected by Ontario property and casualty insurers in 2010 for the Women in Insurance Cancer Crusade (WICC)-Ontario’s ‘Change for Change’ (C4C) Ontario Industry Challenge. All donated funds will go to the Canadian Cancer Society. DAS Canada’s C4C contribution was tops among Ontario insurers, proving that big contributions can come from small companies. DAS Canada started out with only five employees, and has now expanded to about 20. “We’re small, but mighty,” said DAS Canada CEO and president Barbara Haynes. Haynes and her executive assistant, Andrea Muzzi, have been involved with WICC for more than 10 years. Muzzi revealed a significant part of DAS Canada’s success in the C4C challenge was based on Haynes’ facility for business lingo. A Corporate Cliché Swear Jar generated the most money for DAS Canada’s C4C campaign. For the event, Muzzi drew up a list of corporate clichés and people had to donate $1 to the CRC campaign vourites as each and every time they uttered one of the words on the list. The terms included such office favourites g.’ ‘going forward,’ ‘low-hanging fruit,’ ‘giving 110%,’ ‘win-win,’ ‘value-added’ and ‘forward-thinking.’ nd an Other C4C events at DAS Canada included silly-hat days, dress-down Fridays, funny-joke days and Office Olympics Day.
Thank you for joining WICC’s Fight Against Cancer. For more information about WICC’s 2011 Change for Change Campaign visit wicc.ca
Design compliments of Informco ormco
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Should I Stay or
Should I Go Now? A BMS touches all departments of the brokerage. Thus, if a change to another system is being contemplated, many questions should be considered.
Shannon Major Marketing and Communications Manager, Keal Technology
I recently had a satellite salesman knock on my door, soliciting our business. As the salesman started his pitch, my children and dog made a break for the open front door, and the pot started overflowing on the stove. I abruptly said: “Thanks anyway, but we’re happy with our current provider and not interested in your offer.” I hadn’t even heard the offer yet. He politely asked who our provider was. He then asked if he could come back at a more convenient time, because he was 100% confident his company offered enhanced service and benefits at a reduced cost. “Okay, gimme an hour.” I replied. He was right: the offer was appealing. But the thought of switching providers wasn’t. Before we could responsibly decide, we researched all competitors’ offers and spoke with our current provider. This experience is similar to what our broker clients, prospects and internal sales team encounter.Whether you are a broker striving to win new business from the competition, or fielding calls from vendors, the question ‘Should I stay or should I go?’ can be a challenging one.
BUSINESS IMPACT A BMS touches all departments of the brokerage. It can streamline or hinder operational productivity, expose or minimize E&O exposure, sup-
52 Canadian Underwriter February 2011
port growth initiatives or erode profits. In thinking about a change, some questions to explore include: • Why are you considering a BMS switch? What are the specific areas you’d like to change with your current system or vendor relationship? • Are your current workflows a result of technology limitations? If you designed ideal workflows, could the BMS to support them? • How consistently are procedures being followed, especially those with the greatest E&O risk? • How secure is the brokerage’s data? • Does the BMS support and measure marketing efforts? Can you segment your clients? Can you use the BMS to create campaigns, track success and measure return on investment (ROI)? • Is your opinion sought after and valued by the vendor? Do you have a beneficial relationship? Do you see your provider as a business partner? • Does your BMS provide you with retention figures on PIF (policy in force), premiums, commissions by insurer, CSR, producer, branch or insurer? • Does your BMS electronically balance your agency and direct bill statements? • Is your book of business providing the information you require to see how your brokerage is performing daily? Selecting a system to meet today’s needs is im-
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portant.The system should be adaptable to change and offer robust features to support future endeavors. For example: Scalability: At Keal, we continue to see healthy mergers and acquisitions (M&A) activity. As a purchasing brokerage takes on new staff and clients, the system must scale to accommodate that growth. Whether a result of M&A or other business reasons, it might be necessary to segregate the brokerage’s accounting into separate divisions and departments, for example. Does the BMS support this? New Business Initiatives: Many brokers are looking for ways to offer enhanced customer service and identify new revenue streams. Premium financing is a perfect example of both. Does the BMS offer integrated premium finance options to create your own finance division or partner with a third party? Web 2.0: Statistics Canada data show more than 75% of Canadians aged 16 or older used the Internet daily in 2009. Most brokers know being online is critical, but few have attempted to tie existing Internet opportunities back to their BMS. Keal’s BMS, sigXP, uses an application program interface (API) to allow broker Web sites to speak directly to sigXP and even instigate automated processes, drastically saving time and sustaining market efforts. Attracting and retaining top talent: Today’s labour force is increasingly tech-savvy, especially the younger generations entering the workforce. They expect to work in a tech-savvy office and won’t stick around if they are confronted with outdated, labourious workflows riddled with duplicate data entry. Longevity of software architecture: Consider the technological architecture upon which the BMS has been developed. Is the database modern, supported and still being developed? If not, it will be more difficult to effect bug fixes and enhancement requests.
INTEGRATIONS When evaluating a BMS, the level of available integrations cannot be overlooked. Sophisticated integrations will reduce or eliminate duplicate data entry
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and offer opportunities with third-party vendors to further automate the brokerage. Key areas to investigate include: In-house BMS vendor integrations: Software applications planned, developed and supported by one centralized vendor offer more comprehensive integration and efficiencies. Does the BMS vendor offer its own commercial management system (CMS), document scanning and management system, premium finance options, etc.? You might not require
When evaluating a BMS, the level of available integrations cannot be overlooked. They can reduce or eliminate duplicate data entry. these tools today, but you may need them in the future. Insurance companies: Efficiently transacting business with insurance companies is a requirement, but not all broker management systems offer the same degree of connectivity. Explore the BMS/CMS’s available company integrations and participation in industry initiatives like Insurance Brokers Association of Canada (IBAC) Data Exchange project. How strong are the relationships between the BMS vendor and carriers? Is there a structured partnership between both that spells out future development projects? External or third-party connectivity: What other integrations have been developed to further extend the BMS benefits? For example, direct writers have been leveraging the benefits of integrated call recording for years. These benefits are now available for brokerages of all sizes.
TECH TALK What’s under the hood of the BMS? The BMS is the engine of the brokerage, pumping business critical information to all requiring it. Researching the technology and process used to build the software begs the following questions: • What is the database structure? Problems can arise if the BMS is built on outdated technology.
• Does the BMS offer an Application Program Interface (API)? Think of this as a gateway to allow other systems — such as the brokerage’s Web site, for example — to integrate with the BMS. • What type of future development is being planned? How often are new releases available? • Does the vendor offer an Application Service Provider (ASP) service? Many brokers are choosing to outsource their server and IT requirements by having their data hosted offsite. What is the Service Level Agreement (SLA) and security features? • How are new releases prioritized, planned, developed and tested?
TRAINING AND ONGOING SUPPORT The BMS is a sophisticated tool that can be underused — especially without sufficient training and tenured support. Inconsistent and inefficient workflows will emerge without training custom tailored to your unique environment. Investigate how purchased software will be supported, by asking: • Is the support and training offered by live in-house employees or via prerecorded standard videos? • What is the tenure of staff supporting and training the applications? • How will the training be delivered? (Online, in-person, via CDs or manuals, etc.) • Does the vendor have an independent, active user group representing the users’ interest? • What ongoing training and user documentation is available? • How are new version upgrades supported?
CONVERSION AND IMPLEMENTATION A brokerage’s business is based on its data — client, carrier, historical and financial data. Securely extracting data from one BMS to another requires experienced, exceptionally trained professionals. One should therefore ask: • Has the vendor done this type of conversion before? Can they provide references? • Can all data be electronically moved from the existing BMS to new BMS? • Will there be any down time? • What set-up work is required by the brokerage?
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SEMCI:
It is imperative for carriers, brokers and vendors to work towards a ‘critical mass’ adoption of solutions enabling SEMCI workflows. Karl Greenlaw President, CEO, Brovada Technologies Inc.
It has been 11 years since the start of the ‘CSIO Portal’ project and more than six years since it was officially terminated. Its goal was to provide a standard medium through which all insurance-related transactions would flow, adding value to company and broker workflows alike. After five years of toil, the project was shelved and now serves as a cautionary tale to those looking to implement industry-wide solutions. So what went wrong? Was it the lofty scope or the closed-door politics that sealed the fate of something that sounded so good on paper? What happened to the SEMCI (Single Entry Multiple Company Interface) dream? A good place to start is to understand how things may have played out if the project had not
54 Canadian Underwriter February 2011
been cancelled. If the CSIO Portal project succeeded, would today’s landscape be different? The answer is a definitive ‘Yes.’ Brokers would have the efficiencies and real-time access to data required to compete with the direct writers. Brokerages’ operating expenses would be reduced: there would be no need for a separate quoting solution. In fact, one natural evolution of the CSIO Portal could have been the introduction of real-time interface feeds allowing brokers to capture and send data using Customer Relationship Management (CRM) and accounting systems. Systems such as Salesforce.com or Microsoft’s Dynamics CRM would have provided the more tech-savvy brokers with the ability to circumvent the need for a traditional broker management system (BMS) and leverage mainstream software packages that are less expensive and more functional. Insurers would still need to compete on price, but the true differentiator would be on the quality of service and highly influenced by the ability to handle claims effectively.The insurers and brokers who initially decided not to participate in the CSIO Portal would
Illustration by Philippe Béha/www.i2iart.com
The alternative to herding cats
BASEMENT FLOODING Symposium May 26, 2011 Toronto Board of Trade Presented by the Institute for Catastrophic Loss Reduction (ICLR) Basement flooding is one of the biggest challenges facing homeowners, municipal governments and personal property insurers across the country. All industry stakeholders are invited to join the Institute for Catastrophic Loss Reduction (ICLR) at a comprehensive full-day event, as we discuss the issue of basement flooding in depth. Symposium discussions will focus on basement flooding causes, mitigative best practices, homeowner perceptions research, as well as the legal side of the issue - including discussions surrounding government liability and the role of laws and bylaws.
Contact: Tracy Waddington 416 364 8677 or twaddington@iclr.org for both attendee registration and event sponsorship opportunities. For more info see www.iclr.org
Presenters at this one-day symposium will include: * City water/wastewater experts and managers * Researchers * Insurance experts Cost: $295 per person (includes HST)
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either have to succumb to the Portal’s benefits or risk losing their competitiveness to participating companies. Direct writers may still have gained ground but not at the pace or to the extent that exists today. So here’s the problem: if there was so much merit in having a SEMCI-based portal, why did it fail? Perhaps it was because of the dependency on an industry-wide technical adoption of its use. This commitment was surmountable from a technical perspective, but the political implications of the project were too hard to overcome. The triumph of the participating brokers would have meant the demise of many of the vendors in the marketplace, ranging from broker management systems to quoting solutions. Fierce competition among the insurers — which for the most part are heavily-focused, ‘forprofit’ organizations — would have made the creation of a level playing field almost impossible. Shareholders looking for a return on investment would still want differentiation, thus adding to the political pressure of maintaining as much competitive advantage as possible. The fact that the CSIO Portal initiative survived as long as it did is an impressive feat and a testament to its proponents. Unfortunately, given the lack of a ‘critical mass’ adoption, the Portal couldn’t build the momentum it needed to navigate the political obstacles in its path. Is there a way of making SEMCI a reality? The answer is again a definitive ‘Yes.’ But let us be clear as to what SEMCI is (and, for that matter, what it isn’t). SEMCI as a single solution will not work. But constantly striving for such an end goal will begin to deliver on the solution’s promised efficiencies, and yet retain flexibility of implementation. No all-encompassing solution demanding total assimilation will have the political support required to generate a ‘critical mass’ of adoption. SEMCI is not a piece of software; rather, it’s a mindset and approach to achieving the ‘start-and-finish-in-the BMS’ workflows.
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So how do we get there? Given the increased competition between direct writers and the broker channel, coupled with the constantly evolving technical landscape, how do we as an industry work towards the SEMCI goal? Brokers are adamant that insurer portals are taking them in the wrong direction. Even though companies have made significant advancements to minimize the impediment of portals, brokers say they
SEMCI as a single solution will not work. But constantly striving for such an end goal will begin to deliver on the solution’s promised efficiencies, and yet retain the flexibility of implementation. are still saddled with the burden of duplicate entry and the fundamental assumption that brokers will need to leave their BMS to access company portals. One approach has been the automated integration between brokerage systems and insurer portals by way of connectivity solutions like WARP and Nexisys. Nexisys also provides automated upload functionality so the broker only addresses exception data. These implementations improve efficiency so dramatically — up to 80% — that brokerages refraining from using them not only affect themselves negatively, but
unintentionally harm the entire brokerage channel. If we as an industry don’t take advantage of tools that provide significant efficiencies, we will lose the opportunity to serve our clients. One of our partners shared market data suggesting that there are close to 1,000 fewer independent brokerages today compared to a decade ago, when the CSIO Portal initiative was just starting. It’s survival of the fittest as the books roll and companies merge. Solutions are in production today that will get us close to our SEMCI goals. Recently, leveraging our NexExchange product suite, we have being involved in a number of carrier projects focused on a non-portal upload model. The feedback has been phenomenal: brokers have the ability to work from within their respective BMS, entering only a limited number of company-specific questions. They use data in the BMS, supplement it with company-specific questions and send it to multiple carriers with one click. As carriers, brokers and vendors work together on this issue, it is imperative to work towards the ‘critical mass’ adoption of solutions that enable SEMCI workflows.This will help overcome the political and technical challenges of wide-scale change. If we’ve learned anything, it’s that a single technological solution cannot be forced on the industry. Indeed, we’ve seen time and again that attempting to herd the cats is not the answer. If we work together as an industry to define the best practices, and let the natural pressures of competition define how vendors and carrier IT teams work together to deploy them, we can achieve what we set out to achieve so long ago.
Correction and Apology In ‘Necessity Breeds Invention,’ (Canadian Underwriter, January 2011), a production error resulted in human resource firm vpi Inc. being incorrectly referred to as ‘vip.’ Canadian Underwriter sincerely apologizes for making this error.
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Commercial Data
Exchange In the future, commercial insurers will increasingly be moving towards the ideal of a no-touch, straight-through data exchange with brokers. Steve Pieroway
Vice President, Marketing and Client Services, Policy Works Inc.
“Opportunity is missed by most people because it is dressed in overalls and looks like work.” - Thomas Edison Electronic data exchange has become a reality for commercial brokers in Canada. As insurance company offerings proliferate, it is now up to brokers to keep pace and offer clients the best in choice, service and speed. Grand pronouncements of ideal technological solutions are fine. But figuring out the details related to commercial data exchange is far more important. This goes well beyond technology: it means addressing how people work, how they communicate with others and where they will derive the greatest efficiencies. Yes, there are glitches, unexpected wrinkles and delays in this process. However, the end goal of single-entry, straight-through processing
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of small and mid-sized commercial business from broker to insurance company (and back) is well worth it. Many solutions for real-time transactions are ready and waiting for brokers willing to roll up their sleeves and get started. Keep in mind there is no one “silver bullet” solution for every broker. This is a competitive industry with diverse insurance companies of different sizes and risk appetites.There are few black-and-white technology answers. Some insurers with online portals are adopting bridging solutions to streamline workflows to brokers’ Commercial Management Systems (CMS). Others are choosing to integrate CMS directly to their back-end underwriting systems. In the future, more insurers will be moving to this model of no-touch, straight-through processing. Whatever the individual solution today, insurers and brokers realize there are some crucial ground rules for data exchange. First, more insurers are agreeing to use the CSIO (Centre for Study of Insurance Operations) commercial lines XML standards. This is the industry standard for the collection and transfer of commercial data. Second, insurers are using secure Web services to exchange commercial data with brokers and CMS. There is plenty of room for individual insurer solutions, but there has to be a common framework for data exchange. Insurance companies participating in the Policy Works Certified Data Exchange Partner
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program all strongly concur with these principles.These insurers include Intact Insurance, Gore Mutual Insurance Company, Aviva Canada, RSA Canada, The Economical Insurance Group, The Missisquoi Insurance Company, L’Unique, SGI Canada, Coachman, The Insurance Company of Prince Edward Island, AXA, and L’Union Canadienne.
SINGLE SIGN-ON So, what is the current state of affairs in commercial lines data exchange? The companies noted above are laying the groundwork and offering value to brokers on a wide platform of functions. For example, the brokers’ Number 1 complaint about insurer portals is dealing with multiple user names and passwords. Policy Works has a single sign-on capability for participating Certified Data Exchange Partners’ insurer portals. When Policy Works users click the “portal” button on the main toolbar, a dropdown menu appears with the data exchange partners. One click on a partner brings the user directly into the insurer’s portal landing page, bypassing the log-in prompt by securely signing in the user. “For us, it is all about a single point of entry,” says Chad Hudson, vice president with Access Insurance Solutions in Alberta. “If we can use our CMS to access multiple company portals, it makes our job that much easier.” Single sign-on opens brokers up to a world of electronic opportunity in commercial lines. Electronic upload of business insurance submissions — whether to a portal or through insurer Web services — reduces data entry for brokers and gives them the option of a real-time quote. In the world of electronic marketing, it becomes that much easier to submit business to multiple carriers.
e-MARKETING “I think e-Marketing really helps producers who need to get quotes back on tight deadlines,” says Donna McNeill, business insurance broker for Cooke Insurance in PEI. “The speed of the process will be improved greatly be-
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cause all of the information is there in our electronic submission.Then we can turn it around extremely quickly for the client. It will take several steps out of the commercial marketing process.” “In terms of e-Marketing, I don’t have to go into the various portals and make individual submissions,” adds Kira Gretchev, commercial account manager for Sound Insurance Services in Ontario. “I can enter the information into my CMS and submit everything online. It is much simpler and easier to make submissions to multiple carriers.” On the carrier side, insurance companies are providing the ability to download quotations right to the broker CMS electronically. This helps brokers bind more policies by eliminating data entry
Single sign-on opens brokers up to a world of electronic opportunity in commercial lines. Electronic upload of business insurance submissions reduces data entry for brokers and gives them the option of a real-time quote. for proposals. “The exciting part for us now is that when we receive the quote back from the insurance company, it is all in a standard electronic format as well, along with all related policy information,” notes McNeill. “We don’t have to re-input any data. Everything is there and can be opened right up in the CMS. That will cut down on the amount of time our producers and CSRs need to process a quote.”
POLICY-RELATED INQUIRIES In commercial lines, the industry is also seeing a greater emphasis on servicing of in-force customers. This means electronic inquiry functions that give brokers instant access to policy, billing and claims information. In today’s online world, customers increasingly expect immediate answers to their policyrelated questions.
“For existing clients, we want to have that data stored in our CMS, but also easily accessible through the insurance company,” says Hudson. “It makes it much easier for us to do policy changes, endorsements or updates.” Insurance companies are also developing in-force download, whether through batch or in real time. If a broker can do a portfolio transfer of existing clients to the CMS via the carrier, it will eliminate start-up data entry and forge stronger relationships with companies. If insurers can synchronize inforce transactions between their systems and broker systems, data entry will be reduced or eliminated for standard customer service transactions. “Once everything is entered into the CMS, the process from submission to quoting to binding to renewals or endorsements can go much more quickly – especially if it is synchronized on the company side,” notes Gretchev. “Putting a few more minutes in at the front end can save me a lot of time at the back end. I am all in favour of that.”
THE FUTURE Looking to the future, insurers and brokers will increasingly have the ability to exchange data as partners freely and securely. We think portals will likely recede into the background, as carrier investments in Web services give brokers low- or no-touch submission upload and real-time download. This is what straight-through processing is all about. And this is directly in alignment with the principles of data exchange enunciated by broker groups such as ORBiT and IBAC. That future is likely to happen fast. To keep up, brokers will need to educate themselves about the existing opportunities to improve efficiencies, trim expenses and heighten the customer experience. Commercial data exchange will continue to evolve rapidly as long as insurance companies make the right investments in open formats and brokers avail themselves of carrier solutions and make the electronic leap. After all, who’s afraid of a little work?
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INSURANCE INTERNET DIRECTORY ASSOCIATIONS Canadian Independent Adjusters' Association (CIAA) "The voice of Independent Adjusters in Canada" www.ciaa-adjusters.ca Honourable Order of the Blue Goose—Ontario Pond Our fraternal organization has been dedicated to fellowship and charity since 1908. www.bluegooseontario.org The Insurance Institute of Canada The professional educational arm of the industry. www.insuranceinstitute.ca
Informco Inc. Integrated Graphic Communications Specialists. www.informco.com
CONSULTING FIRMS
INSURANCE COMPANIES
Cameron & Associates Insurance Consultants Ltd. Claims consultants to the insurance and reinsurance community. www.cameronassociates.com
Aviva Canada Inc. Home Auto and Business Assurance. www.avivacanada.com
Keal Technologies Complete technology solutions for insurance brokers. www.keal.com
CONSTRUCTION CONSULTANTS Risk & Insurance Management Society Inc. Dedicated to advancing the practice of effective risk management. www.rims.org
MKA Canada, Inc. Providing creative solutions to the Construction, Legal and Insurance Industries. www.mkainc.ca
CLAIMS ADJUSTING FIRMS
DAMAGE COST CONSULTANTS
ClaimsPro Inc. Committed to providing leading-edge claims management services. www.scm.ca
SPECS Ltd. (Specialized Property Evaluation Control Services) Providing Innovative Solutions to Control Property Claim Costs www.specs.ca
Crawford & Company (Canada) Inc. Enhancing the customer experience, every day. www.crawfordandcompany.com Cunningham Lindsey International independent claims services. www.cunninghamlindsey.com Kernaghan Adjusters Doing What Is Right®. www.kernaghan.com McLarens Canada International Loss Adjusters and Surveyors. www.mclarens.ca PCA Adjusters Limited Adjusting to Meet your needs™ www.pca-adj.com
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GRAPHIC COMMUNICATIONS
Quelmec Loss Adjusters Identifying, Investigating, Resolving...for over a quarter century! www.quelmec.ca
EMPLOYMENT ONLINE I-HIRE.CA Canada's Insurance Career Destination. www.i-hire.ca
ENGINEERING SERVICES Giffin Koerth Forensic Engineering and Science Investigate Understand Communicate www.giffinkoerth.com Rochon Engineering Inc. Forensic Consulting Engineers & Code Consultants. www.rochons.com
Catlin Canada Underwriting Ambition. www.catlincanada.com Chartis Insurance Company of Canada Your world, insured. www.chartisinsurance.com FM Global The leader in property loss prevention. www.fmglobal.com Grain Insurance and Guarantee Company Commercial Lines Underwriters www.graininsurance.com RSA Leading car, home and business insurer. www.rsagroup.ca Sovereign General Insurance Company of Canada Since 1953 www.sovereigngeneral.com The Guarantee Company of North America “Specialized insurance products...professional service” www.gcna.com Wawanesa Insurance Earning your trust since 1896. www.wawanesa.com
INSURANCE LAW Walters Forensic Engineering Inc. Providing scientific answers to complex engineering incidents. www.waltersforensic.com
The ARC Group Canada Inc. Your Partner in Insurance Law & Risk Management. www.thearcgroup.ca
INSURANCE SOFTWARE APPLICATIONS Keal Technologies Complete technology solutions for insurance brokers. www.keal.com
REINSURANCE Guy Carpenter & Company The world’s leading reinsurance intermediary. www.guycarp.com Munich Reinsurance Company of Canada Complete reinsurance coverage from Canada’s largest reinsurer. www.mroc.com Swiss Reinsurance Company Canada The leading P&C reinsurer in Canada. www.swissre.com Transatlantic Reinsurance Company For all your reinsurance needs. www.transre.com
RESTORATION SERVICES Winmar Property Restoration Specialists Coming Through For You! www.winmar.on.ca
RISK MANAGEMENT The ARC Group Canada Inc. Your Partner in Insurance Law and Risk Management. www.thearcgroup.ca
SPECIALTY INSURANCE William J. Sutton & Co. Ltd. Insuring Special Risks since 1978 www.wjsutton.com
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Climate Change in
Action
RSA Canada travels to Churchill, Manitoba, where the impact of climate change is far from remote.
Adrian Hall
Director of Personal Specialty Insurance and Corporate Communications, RSA Canada
Sometimes climate change seems like a remote issue. So it’s fitting that while travelling to one of the most remote corners of this country, Churchill, Manitoba, the realities of climate change suddenly became very real to me personally. It also became clear that we as insurers have a role to play in tackling the issue. And with that responsibility comes opportunity.
CLIMATE CHANGE IN ACTION RSA was invited in November 2010 to join our corporate partner, WWF-Canada, and an exclusive group of companies on a tour of the far north to see the impact climate change is having on the Arctic and the polar bears that inhabit the shores of the Hudson Bay. I travelled with RSA’s chief financial officer Nick Creatura and RSA employee Sylvie Paradis, who was invited after winning an internal contest that awarded a coveted prize to the team
with the most innovative and feasible idea in helping to lower our company’s carbon footprint. In this instance, Sylvie and her team devised a paper reduction initiative resulting in thousands of dollars of savings. Sylvie was selected from her team in a random draw to join us on an adventure that would completely transform the idea of climate change as we knew it. Extreme weather events, aging infrastructure and increased water damage claims have placed climate change high on the agenda for insurers in recent years.There can be no denying that our world is changing; given that insurers often use the past to help predict the future, the unpredictability of this changing world is troubling for our industry. This was not a new concept for me. And yet, standing on the shore of the Hudson Bay looking out over open water on a shockingly warm Arctic day in November, was chilling. I was watching climate change in action. WWF-Canada’s senior species officer Dr. Peter Ewins says our group was witnessing one of longest “ice-out periods” in living memory.The longer it takes for ice to form, the longer the polar bears inhabiting the area are trapped on shore and unable to hunt seals. Scientists say that after 120 days on shore, this iconic species starts to experience serious physiological symptoms due to extreme weight loss and other devastating
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CU Seminar ad February 2011
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Putting the pieces together.
Events and Seminars Calendar You work hard to protect your clients’ property. Now, it’s time to ensure that you apply the same kind of energy and commitment to your own success. CIP Society Events and Seminars give you the opportunity to learn, to network, to catch up on industry developments and to think about your career.
CIP Society Events and Seminars Vancouver – CIP Society “Battle of the Insurance Bands” . . . . . . . . . . . . . . . February 17
Toronto – CIP Society Curling Bonspiel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 2
Moncton – Maximizing Outlook for Personal Productivity . . . . . . . . . . . . . . February 17
St John’s – CIP Society Curling Bonspiel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 2
London – Annual Volleyball Tournament . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 18
Vancouver - PROedge Seminar: Finance for the Non-financial Professional . . . March 9
London – Knights VS Windsor Spitfires . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 21
Burnaby – PROedge Seminar: COC VS Wrap-up Liability . . . . . . . . . . . . . . . . . March 22
Toronto – PROedge Seminar: Subrogation Insurance . . . . . . . . . . . . . . . . . . February 24
Moncton – CIP Society Curling Bonspiel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March 24
Regina – Introduction to Surety Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February 24
Saskatoon – PROedge Seminar: Advanced Business Interruption . . . . . . . . . . March 28
Ottawa – PROedge Seminar: Leading Insurance and Liability Cases . . . . . . February 24
Kitchener – PROedge Seminar: Leading Insurance and Liability Cases . . . . . . March 29
Halifax – PROedge Seminar: Boiler and Machinery Insurance . . . . . . . . . . . February 28
Regina – PROedge Seminar: Advanced Business Interruption . . . . . . . . . . . . . March 29
Toronto – PROedge Seminar: Fiduciary Insurance . . . . . . . . . . . . . . . . . . . . . . . . March 1
Toronto – CIP Symposium 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April 6
Canada – National Education Week . . . . . . . . . . . . . . . . . . . . . . . February 28 – March 4
Halifax – PROedge Seminar: Leading Insurance & Liability Cases . . . . . . . . . . . April 28
Kitchener – PROedge Seminar: Severe Weather . . . . . . . . . . . . . . . . . . . . . . . . . . March 2
Halifax – CIP Society Spring Fling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April 28
Keeping you at the forefront of the P&C industry. The CIP Society. MEMBERS BENEFIT. www.insuranceinstitute.ca/cipsociety
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effects such as lower birth weights and smaller litters. At the time of our journey, the polar bears we saw had been on shore more than 150 days. This is significant, because scientists have long viewed the Arctic as the barometer of health for our planet’s overall eco-system.The changes to Arctic climate are a prelude to the increased risk that insurers are likely to face going forward. We have already seen the early effects. According to the Insurance Bureau of Canada, water damage makes up the highest proportion of property claims, increasing from 20% to 50% of claims over the past nine years. In 2009 alone, water damage claims cost the Canadian insurance industry more than $1 billion.
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use energy more efficiently and wisely. “By investing in renewables, we can meet our energy needs and create a sustainable green economy while passing on a healthy planet to our children and all future generations,” says Josh Laughren, director of climate and energy at WWF-Canada. This is exciting news for insurers and brokers who are involved in renewable energy solutions. There has been significant growth within the sector in Canada over the past 12 to 18 months, particularly in Ontario, mainly due to the provincial government’s Feed-inTariff (FIT) and microFIT programs.
RENEWABLE ENERGY The pace at which our world is changing can be overwhelming and daunting, but there is room for optimism and opportunity for insurers who want to be part of the solution. Both the Insurance Bureau of Canada (IBC) and the Association of British Insurers (ABI) have called on insurers to face the challenges of climate change and play a role in supporting adaptation and mitigation. According to the report, Insurance in a Climate of Change: The Greening of Insurance in a Warming World, sponsored by the U.S. Environmental Protection Agency, “the insurance sector is a lightning rod, serving as global integrator of impacts across all sectors of the economy, and messenger of these impacts through the terms and price signals it projects to its customers… The implications of rising disaster losses on insurers are as important as defining the industry’s role in furthering understanding of the problem and advancing loss-prevention solutions.” If that sounds lofty, you may be relieved to know the solution to climate could already be in our grasp, according to WWF-Canada. They believe climate change is largely an energy issue. To reduce our greenhouse gas emissions, WWF-Canada says, we must produce more energy from renewable sources and
opportunity for insurers to use risk management expertise and innovative product development to help devise solutions for energy savings, particularly around claims handling. In claims and other areas, we are seeing more products on the market now that provide customers with the opportunity to upgrade to more sustainable appliances and building materials in the event of a claim to their home and business.These upgrades not only help make homes and buildings more energy efficient but can, in some circumstances, help provide additional resilience against the impact of extreme weather. Our aging infrastructure and its vulnerability to extreme weather require the strengthening of building codes, stronger designs values and land use risk mapping — all areas where insurers can leverage expertise.
SUSTAINABLE CORPORATE BEHAVIOUR
The changes to Arctic climate are a prelude to the increased risk that insurers are likely going to face going forward. We have already seen the early effects. RSA launched its microFIT insurance product in the summer of 2010 for home and small business owners who started their own “micro” renewable electricity generation projects on their properties. Those participating in the program are able to sell the energy produced to the grid and receive stable prices under long-term contracts. As a renewable energy insurer with global scope, RSA is continuously looking at ways to leverage our expertise to help combat climate change.There is also an
Climate change also provides an opportunity for insurers to adopt more sustainable behaviour within their own organizations, by seeking ways to reduce their footprint and energy consumption internally. By changing our own behaviours, we are in a stronger position to share best practice across the industry with brokers and customers. For innovative companies, the possibilities are endless. An article by the Intergovernmental Panel on Climate Change sums up nicely the position insurers can take, stating: “The future role of insurance in helping society to cope with climate change is uncertain. Insurers may rise to the occasion and become more proactive players in improving the science and crafting responses. Or, they may retreat from oncoming risks, thereby shifting a greater burden to governments and individuals.” Having personally witnessed the chilling impact of a warming Arctic, I hope we all choose to be proactive players in tackling climate change. For more information on RSA and WWF’s partnership or the trip to Churchill, please visit www.wwfrsapartners.com
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MOVES & VIEWS
UPCOMING EVENTS: FOR A COMPLETE LIST VISIT
www.canadianunderwriter.ca
AND CLICK ‘MY EVENTS CALENDAR” ON THE HOME PAGE
1
Wendy Hillier has joined Intact Financial Corporation as vice president of procurement and claims supply chain. Hillier has held several key management positions with major insurance companies and has worked with all aspects of claims operations, including setting up high-performing supplier networks.
2
Cunningham Lindsey Canada has appointed 11 new regional managers and four new Ontario branch managers. The regional managers include: • Andrew Hernandez, regional manager for British Columbia; • Allan S. Tole, regional manager for the Prairies; • Paul Robertson, regional manager for Northern Ontario; • Mike Alwyn, regional director of the Greater Toronto Area; • Dan Buch, regional manager for East Ontario; • Edward J. O’Hearn, regional manager for Southwest Ontario; • Geneviève Beaulieu, regional manager for Gatineau region; • Richard Cuende, regional manager of the Quebec City region; • Sylvie Dorion, regional manager of the Montreal Region; • Larry Hay, regional manager of the Atlantic region; and
64 Canadian Underwriter February 2011
•
Roger Persad, regional manager for Claims Management Services (CMS) and national accounts. The Ontario branch manager appointments include: • Rick Bahen, branch manager of the Newmarket office; • Shelley Glover, branch manager of the Ottawa office; • Rod Greyling, manager of the commercial risk division at the Mississauga head office; and • Hector Palma, manager of the Barrie office.
3
Forensic Investigations Canada Inc. (FIC) has acquired Mustang Investigations Inc. “We’re very excited by the coming together of our two companies,” says FIC president Corey Smith. The combined organization — to be operated as Forensic Investigations Canada — will continue to employ both teams. “By combining our organizations’ geographical, service, and technology strengths, we’re now able to offer even greater value to clients across Canada,” the FIC says in a press release
4
Crawford & Company (Canada) Inc. and The North Waterloo Farmers Mutual have launched Crawford’s Contractor Connection program at North Waterloo. Contractor Connection provides insurers with a man-
1 aged repair network for residential and commercial property claims programs in the Canadian insurance marketplace. The program provides indemnity management and all facets of the repair are tracked and managed in realtime on a management system. “We are looking forward to working with Crawford Contractor Connection to provide our customers with access to a credentialed contractor network with service and performance standards that improve the overall claims experience,” said Geoff Bean, property claims team leader at North Waterloo Farmers Mutual.
5
Jody W. Ickovitz has been admitted to the partnership of Gilbertson Davis Emerson LLP, a Toronto-based insurance law firm. Ickovitz articled with the firm in 2006-07 and joined as an associate upon his call to the Bar in 2007. He is active in the civil litigation section of the Ontario Bar Association as technology liaison. He holds a B.Sc
5 (Eng.) in mathematics and engineering (Hons.) and a Juris Doctor, both from Queen’s University.
6
Aviva Canada Inc. has announced 10 recipients of its second Aviva Community Fund competition.The competition awards a total of $1 million to diverse local projects in communities across the country. The winners of the 2010 Aviva Community Fund include Capital City Condors (Kanata, ON); Crystal Bay Yard Improvement (Ottawa, ON); Deamcoat! The Joy is Contagious (North Bay, ON); Dream Playground (Rexton, NB); Northwest Territories SPCA Northern Community Animal Shelter (Yellowknife, NWT); Playground Activity Area (Essex, ON); Playground Legacy— 100 Years in the Community (Vancouver, BC); The Hill of Dreams (Tillsonburg, ON); Therapeutic Garden (Cleveland, PQ); and Supporting families affected by cancer (Oshawa, ON). The brokersupported idea earning sup-
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MOVES & VIEWS
7
11 port outside of the $1 million in funding went to ‘A Well Connected Knowledge Centre’ in Ottawa, Ontario. In association with Smith Petrie Carr and Scott Insurance Brokers Ltd., “The Well” will use the funding to provide a knowledge hub at a drop-in centre for women and children.
7
GrowthWorks Atlantic Venture Fund has made a $1-million investment in ClearRisk Inc., which provides Web-based risk management solutions for the insurance industry and small- to medium-sized enterprises. Based in Newfoundland and Labrador, ClearRisk will use proceeds from the financing to ramp
10 up their sales initiatives. “ClearRisk is delighted to be partnering with GrowthWorks,” said Craig Rowe, president and CEO of ClearRisk. “We have an established product embraced by the market and an excellent team, but current demand is starting to outpace our capacity. With this capital we will be well positioned to pursue significant growth.”
8
Totten Insurance Group Inc. (Totten), one of Hub International Limited (Hub)’s wholesale insurance brokerage operations, has acquired the assets of CULE Insurance. Terms of the acquisition were not disclosed. The CULE operations will become part of Totten’s Toronto office. CULE President Ken Rayner will be joining the senior leadership team of Totten. CULE (Canadian Underwriters for Licensed Establishments) is an insurance brokerage wholesaler, located in Toronto, that works with more than 100 brokers in Ontario, Manitoba
and Atlantic Canada. In a press release, Hub said CULE’s “commitment to serving retail brokers within the entertainment, hospitality and surplus lines property industries will now be expanded to offer the full range of products offered by Totten, including professional liability, environmental, specialty personal lines, protective services and larger limits in both property and casualty.
9
CARSTAR Collision Centre’s social media campaign to raise funds for the Canadian Cystic Fibrosis Foundation has caught the eye of Canadian songstress Celine Dion. For every “like” CARSTAR Collision Centres receives on its Facebook page (www.facebook.com/carstarcanada), the company will donate $1 to the Canadian Cystic Fibrosis Foundation. If the page receives 10,000 “likes,” president and CEO Sam Mercanti will donate an additional $5,000. To date, the company has collected more than 9,000 likes, catching the attention of Celine Dion. An official blog post on Dion’s Web site encourages fans to “like” the CARSTAR page. “Celine is one of the biggest supporters of the Canadian Cystic Fibrosis Foundation,” said Lisa Mercanti-Ladd, assistant vice president of marketing and client services at CARSTAR.
“We are thrilled and honoured that she is assisting us in our campaign. With her help, and the help of all of those who have been affected by cystic fibrosis, we know we can reach our goal.”
10
Elliott Special Risks LP (ESR), a Markel International company, has opened an office in Vancouver, B.C. The B.C. office will be home to Elliott's newest member of the team, Glenn Minnis. ESR operates across Canada with offices in Toronto, Montreal and now Vancouver. In existence for 45 years, ESR was acquired by Markel International on Oct. 1, 2009 and underwrites on behalf of Lloyd's Syndicate 3000.
11
Andy Hall is returning to CNA Financial Corporation as branch vice president of its Seattle office. Hall joined CNA in 1990, and held a number of branch and leadership positions, eventually serving as the president and chief operating officer of CNA Canada. He left CNA in 2008 and joined GCAN Insurance Company as a senior vice president. While at GCAN, he was responsible for the leadership and management of its Western Canada region, encompassing two branch offices and $98 million of gross written premium.
February 2011 Canadian Underwriter
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Salute BC presented Brent Atkinson of Atkinson & Terry Insurance Brokers with the Insurance Person of the Year Award on Oct. 28, 2010 at the Pan Pacific Hotel in Vancouver. Barb MacPhail of Hub International Insurance Brokers, TOS Division, received the Rising Star Award. In addition, three post-secondary students received scholarships. Four-hundred and fifty insurance industry professionals attended the event.
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GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
February 2011 Canadian Underwriter
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GALLERY
The Ontario Chapter of the Risk & Insurance Management Society (ORIMS) held its Christmas Luncheon on Dec. 16, 2010, at the Sheraton Centre Hotel in Toronto. More than 650 attended. In keeping with the spirit of giving, the ORIMS executive chose to raise funds for The Daily Bread Food Bank. ORIMS president April Savchuk presented a cheque for $7,500 and hundreds of pounds of food to the food bank in support of its fight to eliminate hunger in and around Toronto.
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GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
February 2011 Canadian Underwriter
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McCague Borlak LLP ushered in the New Year by hosting industry guests at its annual ‘Christmas in January,’ a traditional reception of cocktails and hors d’oeuvres. The event gave guests a chance to tour McCague Borlak’s newly renovated office space on the 26th floor of 130 King Street West in Toronto.
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GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
ADVERTISERS’ INDEX ACE INA Insurance
7
Applied Systems
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Brovada
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canadianunderwriter.ca
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ClearRisk
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Compu-Quote, Inc.
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Crawford & Company (Canada) Inc.
19
Cunningham Lindsey Canada
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Custom Sofware Solutions
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Duck Creek Technologies, Inc.
33
The Guarantee Company of North America
13
GroupOne Underwriters
23
ICLR – Basement Flooding Symposium
55
Canadian Underwriter - Insurance Media Group
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Insurance Institute of Canada
5, 29, 62
Keal Technology
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Ontario Insurance Directory
73
PCA Adjusters
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Pencross Financial Corporation
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Policy Works
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RIMS
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Risk Management Services (RMS) – An SCM Company RSA – Royal & Sun Alliance Insurance Company of Canada
35 76 (OBC)
Starlight Insurance Gala
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WICC BC
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WICC Ontario
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The Insurance Institute of Ontario held its 112th Annual Convocation & Awards Night on Jan. 20 at the Metro Toronto Convention Centre. Carlos Rodrigues, president of the Insurance Institute of Ontario, served as the master of ceremonies. Franรงois Faucher, chairman of The Insurance Institute of Canada, addressed more than 400 Chartered Insurance Professional (CIP) and Fellow Chartered Insurance Professional (FCIP) graduates. Kevin Newman, Canadian television news anchor, was the keynote speaker.
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GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
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2011Ontario Insurance Directory
This outstanding directory is your personal address and telephone book dedicated solely to the Ontario Insurance Industry… find the company contacts you need immediately! Used on a daily basis by all segments of the Industry — the O.I.D. is the Undisputed Source for Insurance professionals to make contact with companies quickly and easily.
The coil bound O.I.D. contains:
s pages of information s company listings s advertisers s key industry sections: s Insurance Companies / Wholesalers s Brokers s Independent Adjusters s Appraisers
s Rehabilitation Services s Restoration Services s Lawyers / Dispute Resolution s Engineers / Accountants
s Bodyshops / Collision Repair s Automotive Recyclers s Insurance Industry Associations s Industry Suppliers Guide
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Completely Updated for 2011– over 10,000 changes!
February 2011 Canadian Underwriter
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GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
The Portuguese Insurance Professionals Association (PIPA) held its annual Christmas luncheon on Dec 8, 2010. PIPA members and guests enjoyed fine fare at Lisboa a Noite Restaurant in Toronto. PIPA’s mandate is to foster and promote professionalism by providing an outlet to develop and solidify networking opportunities and relationships in the insurance industry.
Doug Hurlbut In Memoriam
Doug and his wife Susan Douglas Nathan Hurlbut passed away quietly at St Michaels Hospital on Jan. 23, 2011, after a very brief encounter with cancer. The Ontario Pond of the Honorable Order of the Blue Goose, a fraternal organization composed of members of the property and casualty industry, recognized the passing of Hurlbut. “It is with great sorrow that the
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Pond learned Gander Doug Hurlbut took his Long Last Flight” the Ontario Pond posted on its Web site. During his 13 years with the Flock, Doug was a loyal Gander and rarely missed participating in an event.” A celebration of Doug’s life was held in Toronto on Jan. 30. Hurlbut, 64, an avid sports enthusiast, was enjoying retirement after many years of
serving as a claims manager with Aviva Canada. Hurlbut began his career with The Cooperators in 1969. Prior to his time at Aviva, he was a claims manager with the Canadian General Insurance Company. “A member of the Quarter Century Club and past President of the Canadian Insurance Claims Managers Association (CICMA), he enjoyed many friends in the industry and will be sadly missed,” the Pond wrote. Hurlbut was the husband of Susan Spierling and brother to Susan HurlbutLuna and Randy Luna. Hurlbut is praised for his positive outlook and true affection towards people. In June 2005, shortly after Hurlbut’s retirement, industry colleagues and friends
held a retirement celebration titled ‘Dougstock.’ Hundreds of industry revellers attended the party at Toronto’s Pilot Tavern, an establishment Hurlbut says he supported over the years. The evening’s entertainment featured performances by various bands and artists, including Hurlbut himself. At the event, retirement well-wishers referred to Hurlbut as a “relationship crusader” and the “kind of guy you want to live next door to.” A ‘Dougstock II’ event was held the following year, in June 2006. Proceeds from that event went to WICC (Women in Insurance Cancer Crusade). The Honorable Order of the Blue Goose reports that a ‘Dougstock III’ event will be held this spring.
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COMMERCIAL INSURANCE | PERSONAL INSURANCE
THEY WERE FORCED TO FLEE WITH JUST THE CLOTHES THEY HAD ON.
WE MOVED JUST AS FAST.
It was a bright and sunny day on April 30th in Halifax, Nova Scotia, so it was easy to see the thick, black smoke coming from a nearby forest fire. By nightfall the flames had crept up close, too close, to neighbouring homes. Some 500 families, like Isabella, Holly, little Lauren and their parents, were forced to bundle a few things together and abandon their homes. Like everyone else, the girls had no idea what the next day would bring. What it brought was a remarkable and uplifting response from RSA’s Atlantic team, a group of whom were conducting business some 1200km away when the fire started. They saw the drama unfolding on an airport TV. At first light, a team of Underwriting, Sales and Claims met up to put together and execute a plan. We quickly made the decision to waive all deductibles, despite not knowing the full scale of loss. Our brokers faced one of their most stressful days in business, but woke up to discover that RSA had already done the
Docket #:
RS 7231
Description of Ad: Client:
halifax ad RSA
Creative Network Contact: Daveral Prins
Ad or Trim Size: Type Safety: Bleed Size:
8.125 x 10.875” 7 x 10” 8.375 x 11.125
Publication: Issue: DUE@PUB:
eMail: mail@creativenetwork.ca Phone: 416.488.1033 x26
legwork for them. We located all the files of RSA customers who were affected, so the brokers could quickly contact their distressed clients and offer reassurance. By 11am an RSA Claims Vehicle was on site helping local residents, including the girls and their family. The Claims team provided snacks to keep the girls’ hunger at bay and their minds off the fire, while mom and dad had their questions answered. RSA’s decisions and actions that day demonstrated how proactive, collaborative thinking can deliver peace of mind even in the midst of potential disaster. When the smoke cleared the family found their house relatively unscathed by the fire. Cue sighs of relief from them, and a few from us too.
Discover more about the ways we keep people and businesses moving at www.rsabroker.ca/movingstories.
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