CSIO portal teeters on the brink

par Stéphane Desjardins | October 19 2005 02:32PM

Eight years and $11 million later, the ill-fated portal designed by the Centre for Study of Insurance Operations (CSIO) is once again teetering on the brink. With only 43 regular users in Ontario, brokers and insurers are skittish about embracing a project plagued by missteps and delays.

Within the Insurance Brokers Association of Canada’s (IBAC) latest annual report, is a report by the Insurance Brokers Association of Ontario (IBAO) on the portal’s usage. The tone of the report, signed by IBAO’s chairman, Doug Grahlman, is clear, as this excerpt shows: “Insurer commitment to the Portal seems to have all but disappeared.”

Interviewed by The Insurance Journal, the IBAO blames insurers for not enabling the creation of an environment where brokers can move from their brokerage firm management system to the portal in a mouse click. For now, this transition is neither instantaneous nor smooth. This is not the fault of the technology developed by CSIO, insists Randy Carroll, IBAO’s chief operating officer.

Changing operating methods is not easy in any industry, he says. In the case of the portal, insurers are not keeping their promises to let brokers use the portal properly, as soon as possible. Brokers want the portal but will not adopt it if they don’t feel that insurers are clearly supporting this initiative.

In fact, 30% of Ontario brokerage firms have registered for the portal and pay for this technology. They just don’t use it.

Dismal figures

Based on figures supplied by CSIO, the IBAO concluded that the usage rate of the portal is extremely disappointing. IBAO confirms that it has made a huge effort to encourage brokers to register with the portal. The organization hoped to see 215 brokers signed up by the end of this year. This objective was exceeded by more than 10% as of last month.

Of those signed on, 186 were live and connected to the portal. The remaining are either in the process of connecting, or have seen their applications deferred or deemed ineligible due to technical problems.

Of the connected subscribers, “106 are consistently registering no activity on the Portal, or paying for, but not using the service,” says the IBAO. “We have identified 43 brokers as being close to full usage and 37 who have some activity, but not enough, in our opinion…to be using it as their primary quoting tool,” Mr. Grahlman wrote in the report.

The IBAO noted that CSIO has guaranteed financing by its members (insurers and brokers) until January. The association did not comment on the future of the portal after that date.

“It is true that we are facing a cash call and a fairly tight deadline,” Mr. Carroll noted. “I still have faith in this project and our organization is trying to convince insurers to get more involved. We asked them to get back to us before our annual meeting on October 19. It would be a shame, after having resolved all the technological and governance problems, if the CSIO would have to throw in the towel. We’re so close to reaching our goal…”

In Quebec

“We have seen these statistics and are asking many questions,” said Hubert Brunet, general manager of the Quebec Insurance Brokers Association (RCCAQ). “We commissioned a study to explain the lack of interest among Ontario Brokers.”

Mr. Brunet admits that the usage situation is unacceptable, despite the portal’s being completed and operational in Ontario. He does not think the portal is near death, but he admits that today, technology must be fairly advanced to eliminate complications. “We’re not there yet,” he continued.

“You are asking me if the portal is threatened? Let’s be frank: if this issue doesn’t change quickly, you would have to be blind not to see disaster ahead. Right now, the sky is filled with huge clouds and the portal is directly in harm’s way,” Mr. Brunet commented.

Insurers sceptical

Scepticism is mounting at some insurers. Gregg Hanson, president of Wawanesa, got straight to the point: “The CSIO portal has a difficult hill to climb.”

For some, CSIO’s problems implementing its portal reflect the inability of insurers that deal with brokers to join forces to develop an industry-wide solution. Mr. Hanson rejects this argument outright: “In some projects, we work with our competitors. For others, we opt not to. The beauty of the capitalist system is that each company develops its own game plan. I noticed that today P&C brokerage insurers active in Canada do not all share the same vision of a broker-insurer interface. And I doubt that the CSIO portal will emerge as this solution.”

In addition, he pointed out that the industry lost millions in the early 90s with the Synchron project. “The industry does not seem to want to adopt this approach. But the technology today would make it possible to introduce a low cost data exchange interface between brokerage firms’ management systems and insurers. The perfect example is the technology developed by Custom Software Solutions. We have been dealing with them for six years, and over 70 of our brokers exchange data with us on a daily basis, using this system. We have invited the other insurers to use this technology. But there is resistance, because several insurers are wary of letting a third party that they don’t control into the distribution chain.”

Wawanesa has no holding in Custom Software Solutions, a management systems supplier for brokerage firms whose star product is Broker’s Workstation, but it did subsidize up to $2 million in research and development for the interface that Mr. Hanson described.