CSIO portal a difficult technological challenge for insurers

By Stéphane Desjardins | May 20 2002 06:45PM

The Centre for Study of Insurance Operations (CSIO) general insurance portal is taking longer than expected to create. It is a difficult bit of technology, say insurers, and needs to be taken in baby steps.

In its initial phase the portal will provide the property and casualty (P&C) broker channel with a comparative quoting service and a single sign-on link to company web sites for their broker partners.

Klaas Westera, President of the CSIO, says using the portal will improve the current rate of insurance applicant rejection of 25% to 40% to less than 5% using the portal. Portal services would be sold at cost, and target subscriber fees would be less than for current broker management systems (BMS).

Many insurers plan to participate, including Lombard, ING, Economical, Pembridge, Pilot, Citadel, CGU, Dominion, AXA, L’Union Canadienne, Royal & SunAlliance, Gore, and Farm Mutuals. All are taking their time in doing so, however.

Harry Binks, President of Binks Insurance Brokers and Chairman for the technology committee of the Insurance Brokers Association of Ontario (IBAO), surveyed 280 IBAO members. He found 57% were concerned the portal would even work, and 51% weren’t sure that insurers would participate. Twenty percent were excited by the notion of discontinuing insurer proprietary systems. Sixteen percent were excited about saving money. Conditional to insurer participation, 80% said they would subscribe to the portal in 2002. Five percent said they would in 2003.

Despite this, George Cooke, President of The Dominion of Canada General Insurance, says many of the 17 participating insurers are openly questioning the odds of the portal’s success. Their issues are with providing real-time and unabbreviated quotes, concerned that their technologies will be unable to deliver.

Janet Babcock, Vice-President of Information, expects Dominion to be connected to the CSIO portal by November. She revealed that the insurer had set up a large team for the project, but – seeing how the project was dragging on – decided to freeze the file for a few weeks. “We will be starting up again this summer,” she said.

“I think the industry needs to learn how to use this new technology,” says Igal Meyer, President of CGU. “We need to determine the level to which a company can be comfortable with a very automated process. In this case it is clear that we are trying to satisfy the client, but we have to do it step by step.”

Mr. Meyer is worried about moving forward too fast. “Even if the project does present some clear advantages, I’d rather take the process in small steps. If we go too fast we will hit a wall. A false start would be the worst thing to have happen to the industry.”

Grace Webster, Vice-President for Business Solutions at Royal & SunAlliance, says the portal project is a difficult thing to coordinate. “On the technological side it is quite complicated. Then on the political side, even without a major disagreement between the players, it takes some doing to get everyone playing in the same range. When the portal finally does take off, it will be the catalytic element for sweeping changes in the insurance brokerage industry.”

Pierre Lemonde, the President of AXA Canada Tech, shares that view. “The biggest challenge for us is to prepare a full (or certified) quote. That requires us and other insurers offering services through the portal to do a considerable amount of work. Whatever is being said, I think insurers are feeling the pressure to deliver on time.”

When they realised the amount of work involved, companies began to look at technological alternatives in order to connect to the portal without undue delay, continues Mr. Lemonde. “Tests and demonstrations have shown that most of the large insurers would have trouble reaching the objective within the initial CSIO deadlines.”

Mr. Lemonde concedes that some insurers “foresaw a project, resources, and time. Others were waiting to see what CSIO could offer them,” he says.

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