Increasingly, independent agents are being asked (or required) by their carriers to use agency self-service Web sites. These carrier Web sites often provide quoting/rating, underwriting reports, submission support, and binding, as well as direct bill, claims, product and commission information. Because the rates, rules, and information are current and accurate, agents and carriers benefit. This new approach is an improvement over estimated quotes, delay, and paper. But it creates new problems as well.
Each carrier implements its service in its own unique way. That means agency staff has to learn and then deal with an increasing proliferation of systems, logons, and look-and-feel - all external to their agency management systems. Over the last ten years or so agents have had some success centralizing all their workflow into their management systems. The flowering of carrier Web sites is forcing agents in exactly the opposite direction. Even with download from carrier sites, and thus single entry, agents are receiving a mixed blessing from the proliferation of carrier Web sites.
The Canadian industry saw these opportunities and problems coming two years ago and decided to do something about it. Early in 2002, Canadian brokers (independent agents) will be able to go to one Web site, the CSIO Insurance Portal, to get accurate and up to date comparative quotes and to do policy maintenance into multiple carrier systems. Not the complete solution perhaps, but an improvement over what U.S. independent agents face.
Who is CSIO?
CSIO (Centre for Study of Insurance Operations) is a cooperative broker and carrier association focused on improving the efficiency, effectiveness, and competitiveness of the independent Canadian insurance distribution system though the use of technology. We have no direct correlate to the CSIO in the US. It's a bit like ACORD, IVANS, and a national vendor rolled into one.
CSIO is like ACORD in that it fosters the development of standards - in forms, EDI (batch interface), and XML (real-time processing). CSIO has gone further than ACORD in creating standards. For instance, it has created a presentation standard for rating, policy information, and other insurance information needs. CSIO is unlike ACORD, though, in that it serves only the Canadian independent P&C system - not the all-insurance, all-distribution systems, global orientation of ACORD. Though CSIO affects less of the insurance picture, it can affect it more deeply. While ACORD cannot favor the independent distribution system over the captive or direct systems, CSIO can. It's an out-and-out advocate for independents and that makes it more effective for that group.
CSIO is like IVANS in that it fosters the implementation and use of private, insurance industry communication networks. Like IVANS, it was an early customer of IBM's Advantis network. But unlike IVANS, three to four years ago CSIO (and the Canadian industry) replaced Advantis with a private IP (Internet protocol) network. The move immediately cut industry communication costs by 70%. Canadian brokers and carriers have the advantage of using Internet technology without exposure to the unmanaged, and somewhat scary public Internet. The availability of a private industry IP network is important because it provides a measure of security and performance not possible with the public Internet. When the public Internet is bogged down by denial of service attacks, viruses, worms, or other significant nuisances, Canadian brokers and carriers won't be affected.
CSIO is like a national insurance technology vendor in that it will soon be providing comparative rating services, something that Canadian rating vendors already do today. But CSIO is not-for-profit and it's owned by the carriers and brokers it serves. Its focus is on the success of the industry, not simply on its bottom line.
Over the years CSIO has created Electronic Data Interchange (EDI) Standards, Form Standards (paper and computer formats), Web Screen Standards, XML Standards, Terminology Standards (including an English to French Glossary), and developed an industry extranet (CSIOnet). And it's done this with a staff of fewer than ten.
Portal point
I had a chance recently to talk with Klaas Westera, CSIO President, about his organization and its portal effort. What's behind the portal effort? According to Westera, the CSIO Insurance Portal "is a new vision of broker-company communications through the use of Internet technologies. It will provide the industry with a modern and efficient way of trading information and transactions between all stakeholders." Westera added that the design of the portal is based on six key concepts:
It's worth unpacking these points a bit. The Canadian insurance industry didn't want to leave the process to chance or to one or two vendors. They thought the results wouldn't meet their goals. The industry agreed that it made no sense for each carrier to create its own portal and then expect brokers to come to it. That would mean redundant expenses and chaotic broker workflow. The quotes are issuable. They come from the carriers themselves and the process uses carrier underwriting rules. The problem with traditional comparative quoting via third-party vendors is that the rates may not be current and the premium quoted is usually an estimate, not what the carrier would actually write the business for. Carriers and brokers have a wide variety of installed technology. The design of the portal is to be flexible enough to accommodate everyone. So, for instance, carriers that cannot provide real-time rating through their mainframes can use third-party ASPs as a stand-in. The process must be single-entry. It doesn't make sense to proliferate technology and services if the broker must re-key information to pass it between platforms. And finally, since stakeholders have invested a great deal in batch interface via AL3 standards, the portal must accommodate them while they, over time, convert to real-time interface via XML.
What will the portal do?
At least to begin with, the portal will focus on two areas: personal lines point-of-sale support and single-login to multi-carrier policy systems. Point-of-sale means pricing and creation of appropriate documents for new customers with download of data to broker management systems (BMS) for internal processing and/or submission to the carrier. If the broker wants to rate a renewal, they can upload the data to the portal from their BMS.
One of the problems with the proliferation of multiple carrier Web sites is that brokers need to keep track of and use multiple logon/password schemes - one or more for each carrier site. Then they must deal with different screen layouts from each carrier, even though they treat the same line of business. The CSIO portal is intended to allow agents to do one sign-on that will be good for multiple carriers. The broker comes to the CSIO portal, logs on, and then clicks through to a carrier site. The CSIO portal passes the identifying information on to the carrier, who then should have enough information (and confidence in the CSIO process) that an additional logon won't be needed.
In addition, CSIO has created screen layout standards carriers are expected to use when presenting Web pages back to the broker. That means brokers should not have to deal with unique layouts carrier to carrier. Even though the broker will be using multiple carrier Web sites, the broker will use only one sign-on and have only one look-and-feel to learn. Given that the CSIO portal will also support upload and download with broker management systems and XML interaction between portal and carrier systems (with carriers doing download to management systems), there isn't much to complain about. Single-entry and what appears pretty much as one system.
Carrier uniqueness
What about the special features carriers like to include in their products? How will this comparative rating environment support them? Besides the presentation level standards, CSIO has created standards that specify the messages that flow back and forth between the portal and carrier rating systems. One part of that standard allows for the inclusion of company specific information. So when quotes come back to the portal they can contain additional information the carrier considers important to fully describe what's being offered for the price, and the portal will display that information as part of that carrier's quote.
CSIO does not insist that carriers who already have broker self-service sites dismantle them. If a carrier wants its own site to present its particular mix of products and services in its own special way, that's fine. It's only important that the carrier also participate in the CSIO effort, so that brokers wanting comparative rating and single logon can have it. It's not either/or - it's and.
What happens to rating vendors?
Like the U.S., Canada is home to a number of personal lines comparative rating vendors. How will they make out? Won't the CSIO portal put them out of business? According to Westera, the vendors can have a good future providing carriers with ASP rating services the portal will tie into.
Many carriers cannot support real-time rating today - something the portal demands. Their mainframe policy systems are designed to do overnight rating. Rather than try to create a real-time facility, the carriers can contract with rating vendors who already know how to handle quoting interactively. So rather than providing retail service to brokers, rating vendors can change the focus of their businesses to private label real-time rating services for carriers. According to Westera, "This will also create an opportunity for these vendors to move from the business of supplying approximate rates to more accurate or guaranteed rates. This strategy would help vendors solidify their new niche by taking pressure off of companies to implement their own real-time rating ASAP. The non-guaranteed status of rates will force company development if vendors don't provide more accurate rating."
What's next?
Ideas for enhancements for the second (and future) editions of the portal include:
Where does the money come from?
To start with, CSIO is funding the effort through use of its available surplus. This together with a relatively modest special assessment to carrier and broker members will see the project through to a breakeven cash flow position.
Once the portal is running, continuing development is to be funded out of some of the incoming revenue. Though subscription pricing hasn't yet been made public, it's expected brokers will pay about what they do now to comparative rating vendors, but the brokers will have the advantage of guaranteed quotes and single logon.
Will it work?
Once the portal is made available for general use in early spring of 2002, we'll know more about the quality of its technology, its operational responsiveness, and the brokers' real interest. But early signs are positive. Seventeen carriers are already committed to the project and intend to be ready by spring. The carriers represent about 55% of broker-placed personal lines premium, enough to develop critical mass and some momentum.
A few years ago, several Canadian carriers put together a project called Synchron, a technology service intended to perform some of the functions that CSIO is now implementing. The project never got off the ground and is seen as a major industry fiasco. Supported by six major carriers at its high point, Synchron wasn't really an industry wide effort, and it didn't make use of Internet technology. Westera is confident the CSIO portal will succeed and its roll out won't be diminished by the Synchron experience. In a sense, Synchron's failure helped guide CSIO in developing a more suitable industry solution and approach.
CSIO isn't trying to do all the work itself. The CSIO Insurance Portal has been designed by CSIO, but is being implemented by IBM and DWL, a Canadian vendor that focuses on the insurance industry.
Will it work? I don't know. But I do know that the pain of failure, which is chaos, will be more intense than the pain of cooperating for the common industry good.
For more information, visit www.csio.com and www.csioinsuranceportal.com.
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