Broker management systems (BMS) are one of the most used pieces of technology in the insurance industry, with almost 100% adoption across all geographies surveyed in the Applied Systems ‘2021 Digital Technology Adoption Survey’. However, despite this high adoption rate, not all brokers are using their BMS to their full potential.
According to Applied’s annual survey – which is intended to provide an industry-wide benchmark for brokerages to measure their digital technology adoption and progression towards digital transformation – only 23% of Canadian brokerages are using the integrated commercial lines submissions and renewals features within their management systems. This is a far cry from the 92% of Canadian brokerages that use their BMS to manage documents and 90% for accounting and financial reporting.
One roadblock perhaps preventing brokerages from utilizing their BMS for commercial lines submissions is the “lack of standardization” in the commercial lines space, according to Steve Whitelaw (pictured), vice president and general manager, Canada, Applied Systems.
“Commercial lines is a more complex line of business than personal lines,” he said. “Within commercial lines, there’s small business, such as contractors, retail, business and professional services – where the premiums are the same as or less than what some people pay for their homeowners’ insurance – and then there’s the middle-market and the large, complex business.
“Traditionally, it’s all been treated the same. A broker will send in a submission to a carrier, and it’ll either go by email, or it used to be by fax, and each carrier will have their own different preferred way of documenting those submissions. So there hasn’t been standardization inside the commercial line space.”
To combat that lack of standardization, Applied has been working closely with the Centre for Study of Insurance Operations (CSIO) on the development of standardized industry APIs (application programming interfaces) that will enable real-time data exchange – including small business insurance submissions and quoting – between brokers’ and insurers’ systems.
These standardized APIs will provide a more fluid information delivery and “a much better experience for the customer,” according to Whitelaw, because brokers will be able to present numerous quotes in real-time and then focus more on advising their clients on the best-fit coverages.
“As you move up the scale to the mid-market and large business, it’s important to have a standard process for the brokers,” he told Insurance Business. “They may have to collect more data, they may have to collect different data, but when it comes to the submission, the process for that submission should look the same to them, whether it happens through digital connectivity or whether it happens through email, and the form that is used for that should be the same.
“We’re really talking about data-driven processes as opposed to form-based processes. If you can drive the processes using data, there are efficiencies made inside the brokers’ office, and the carrier can receive that data, they know it’s complete, they know it’s good, and they can apply automation to it at their end. They may just route the email to an underwriter to look at the submission, or they may be able to apply some automation and intelligence to it to streamline their own processes.
“We’re at a point of change in the industry in terms of how we’re trying to bring efficiencies so that those [commercial lines] submissions can increase more directly and happen straight from the BMS.”
Applied describes BMS as “an indispensable tool that help brokerages manage customer relationships, administer policies and benefits, automate sales, process accounting, and manage documents.” The international firm has developed a system that enables standardized commercial lines submission, and it is increasing those capabilities to allow for real-time quoting.
The next step for Applied – and the P&C insurance industry at large – is for all key stakeholders (insurers, brokers, and vendors) to agree on standards. That, according to Whitelaw, is where the “connectivity partnership” really comes into play.