A major technological work in progress, the exchange of digital data in the life and health insurance industry has room for improvement. MGAs cannot hope to make this connection until all insurers are ready.
Insurers currently send almost all new business data feeds in Canadian Insurance Transaction Standardization (CITS) format. These are the standards issued by CLIEDIS (formerly Canadian Life Insurance EDI Standards). Few, however, do so routinely in connection with in-force business – essential to enabling advisors to gain a 360-degree view of all their clients' product portfolios.
In addition, MGAs say that their companies are often the missing link in this connection. IDC Worldsource Insurance Network CEO Phil Marsillo said that the end-to-end connection does not yet exist in the distribution channel, and that its advent may take time.
“I wonder if the customers know that we (MGAs) are in the picture. They mostly know the insurer and their advisor. We work with insurers to be better connected. But we do not yet see the consolidated portfolio of advisors with different insurers. It won't be the case for another two or three years,” he predicts.
The situation is similar for Groupe Cloutier. Its vice-president and executive officer, Michel Kirouac, said he recognizes the limitations in communication. "Our connection is not fully computerized in our investment subsidiary, and it is not optimized in individual and group insurance," he said.
End-to-end connection is coming but it's not as smooth as we would like, added Kirouac. "What we need to aim for financial needs analysis: projections, electronic applications, police issuance and, ultimately, commission payments. All of this information should be made as digital as possible. Everything that the advisor has entered in the financial needs analysis should be communicated to the other links in the chain. I guess within two years we should be there," he said.
PPI CEO Jim Virtue said he believes the last step in the connection is the most important. He said PPI’s Wealthserv administration system connects to the digital information on new business, and all of their advisors use it. He added that the industry is continuing work on the next stage of this technological transformation: developing a pipeline to supply in force business data. PPI is currently piloting this project with a few suppliers.
Reliability and data protection
Senior vice president of Equisoft in Canada, François Levasseur, said that a connected pipeline is not enough. The data must be reliable, which he said is not always the case.
"The goal is to offer advisors a 360-degree view of their business portfolio. Allowing the advisor to see if a customer has several products with him, or a complete plan, allows him to improve service. It can ensure better customer retention. Without a system to do this, the advisor remains reactive,” said Levasseur.
The system must be complete but the majority of insurers do not exchange CITS files on in-force business, he says. “It is difficult for an advisor to segment clients if he does not see their assets under management or if they have life insurance but no disability insurance. This is why the pipeline must be complete with bridges between each link in the distribution chain,” said Levasseur.
Even if all the data circulates, he said he wonders whether the CITS files sent by insurers will be reliable. "It’s not always the case right now," said Levasseur. “They sometimes contain minimal data or low-quality data. Fields are missing or there are duplicates. Sometimes the files are very good. It varies from insurer to insurer," he said.
Phil Marsillo said he believes that the industry will have to be extremely careful making this connection. “In terms of compliance and cybersecurity, what could be the impact of a data breach, as we store more and more digital information, if it is transmitted between the insurer, the MGA and the advisor? And how do we mitigate the impact of this and reduce the risks?"
