Brokers and MGAs spend their days connecting information held in separate systems, and replacing those systems is seen as a risk, according to Eric Purdy (pictured), strategic corporate development and operations associate at Rival Insurance Technology, an insurance software company.
Purdy told Insurance Business that the combination keeps technology change slow in the industry, and that adding AI on top of old systems will not close the gap.
Purdy said conversations with MGAs and brokers kept returning to one thing: "the fragmentation of systems." Information lives across different systems, emails, documents, quoting tools and portals, he said, and brokers and MGAs "have to do all that work themselves."
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Historically, a management system has been passive, he said. It stores information, and brokers need to know how to navigate it to get results. The aim, Purdy said, is for brokers to spend less time navigating systems and on administrative tasks, and more time serving clients.
He said technology in the industry has "stagnated to some degree" because incentives have not favoured innovation, and the industry has had a successful model.
"Anytime you change your legacy system or any type of system you've been using for 10, 20, 30 years, it is seen as a risk," Purdy said. Brokers ask whether they will lose their data, how long it will take to learn the new system, whether staff need training and what happens to their integrations, he said.
"Those are all rational concerns," Purdy said.
He said leaders managing a change have to get to the groundwork and understand why and how workflows are done, a lesson reinforced during Beyond the Tech, a panel discussion hosted by Rival on technology adoption and change management. Clear communication on goals helps reduce the risk, he said.
"End of the day, this is a change management problem," Purdy said.
Brokers who have done the job well for decades may not welcome "a new shiny tool that changes the way you're going to work," Purdy said, and "we have to respect that." The company has to find a way to "walk that narrow bridge" toward what it considers the future, he said.
Rival holds weekly focus groups with brokers and builds from what they ask for, he said, instead of telling them how the work will be done.
"I don't know if we have a perfect answer for it," Purdy said. Not everyone will buy into what is coming, he said, but the technology has to be built anyway, and the best way to do it is by listening to the people who use the software.
AI is useful where it removes friction from everyday work, Purdy said. It can act as an assistant with instant access to information, reviewing material, drafting communications and organizing data.
It also needs checking. "You can't trust it blindly," he said, and "even though it looks pretty, it will literally lie to you to some degree."
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Purdy said the hype is greatest around systems built 20 years ago.
"You can't just bolt AI to the side with a chatbot and say it's an AI-native or AI-powered system," he said. He compared it to "trying to put a square peg in a round hole." He said "the AI opportunity might be the biggest ever," though a system has to be built for it.
Purdy said the biggest change coming is a shift from a system of record to an active system of work. A management system, he said, would understand that a renewal is approaching, pull together the relevant information, identify what has changed and help the broker decide what to do next.
Brokers will also want more connected technology, he said, with integrations across management systems, rating, carriers, MGAs and third-party apps and data, in an open ecosystem and not a closed one. The broker and underwriter stay responsible for the judgment that matters, he said.
"The brokers are not going anywhere," Purdy said.
