The property and casualty (P&C) insurance industry stands accused of lagging behind other segments of the insurance industry and behind other industries in general, when it comes to demonstrating the benefits of connectivity between insurance brokers and carriers. The Insurance Brokers Association of Canada (IBAC) hopes to address this lag by demonstrating the tangible benefits of Application Programming Interface (API) for insurance brokers and carriers.
“IBAC has been leading the efforts to achieve real-time connectivity in the insurance industry for several years,” the association writes. “Currently brokers and carriers use their own separate systems to manage transactions. Brokers first enter client data into their broker management systems (BMS), and then must re-key the data into carrier’s portals. This double entry introduces delays and data quality issues and ultimately negatively impacts the client experience.”
They add that API technology makes it possible to transmit the data in real time and eliminates the need for double entry.
“Other industries have made great headway in real-time data sharing but the insurance industry is lagging,” they write. “To ensure that the broker channel remains the preferred choice for consumers in Canada, brokers and their insurance carrier partners need to up their game in this area.”
To help, the IBAC commissioned a study analyzing the effects of adopting APIs into brokerage operations, measuring the time it takes to process transactions by observing live broker operations over an extended period of time with a diverse set of participating brokerages.
“Connectivity dramatically increased the accuracy of insurance broker quotes. Today more than a third of quotes provided to clients do not match the price in the carrier portal. With connectivity, this becomes a non-issue. Improved accuracy saves over 10 per cent of the time taken to quote.” They continue saying allowing insurance brokers to make client changes in their own systems without double entry saved as much as 40 per cent of the work and reduced client wait times by the same amount.
“Removing the hurdles of process friction and double entry levels the playing field with direct writers,” they conclude. “That, combined with the broker channel’s strengths of choice and advocacy, will clearly make the broker channel the best choice for consumers and allow brokers to retake market share.”