Building Consensus

Sometimes building a consensus is harder to achieve than building the most complex piece of infrastructure.

Catherine Smola, the new president of the Centre for Studies of Insurance Operations (CSIO), has spent a great deal of her career in the insurance industry bridging the gaps between stakeholders’ disparate points of view.  

Smola was first exposed to the insurance industry when she spent her summers in university working as a ‘Girl Friday’ in a brokerage. She liked the brokers’ attention to detail and focus on customer service. “The personalized service, the personalized advice, the fact that the brokers took the time to really understand each and every clients’ situations and insurance needs, that impressed me,” she says.

Once she finished university, she pondered what to do next. CIGNA Corporation (now ACE) was advertising a management trainee program for recent university graduates. Her summers working in the brokerage had sparked an interest in joining the industry, so she applied and was accepted.

“The program was fantastic,” she says. “I worked through various departments and my permanent placement landed me in the commercial lines area. I loved it. The complexity of the risks really drew me to the commercial files. No two risks were the same. I had the opportunity to go out with the engineers from the loss control department and visit the factories and facilities that we were insuring. It was an outstanding learning experience.”

After two years with CIGNA, Smola moved on to manage the property facultative department of Swiss Re. From there, she moved to ING, where she worked primarily in the insurer’s corporate office. Her various roles and responsibilities at ING included research and development, writing the commercial lines fleet underwriting manual, to developing a whole new suite of commercial lines products.

In 2005, she was appointed vice president of Trafalgar Insurance Company, and the next year ING (now Intact) purchased Grey Power and appointed her president of the brokerage operation.

“So, that’s my path to date,” she says. “I began as a broker, went to a big American company, moved to a European reinsurer and ended back up at a Dutch-Canadian company.”

Smola officially joined the CSIO as its president in January 2012.

Achieving Consensus

CSIO’s central mandate is to seek ways to provide a competitive advantage for the independent broker distribution channel in Canada by working with its membership base of 2,100 brokerages, 21 insurers, 43 mutual insurers, and 25 vendors. “The key to CSIO’s mandate is the leadership role it plays, by providing a dynamic and open forum in which all industry stakeholders work together to develop and enhance existing standards and to seek ways to improve both the efficiencies and competitiveness of the industry as it continues to evolve,” she says.

Of course, given the multitude of stakeholders representing different corners of the industry, achieving this mandate sounds easier said than done. Smola observes her professional background has prepared her well to take the reins of CSIO. Both Swiss Re and ING/Intact helped her to hone her collaboration skills.

“As a reinsurer, you need to go out and market your organization’s ability to reinsure accounts,” she says. “You have to work with carriers to build the confidence that we’re the right reinsurer to partner with.

“And certainly in my role at ING/Intact, being in the corporate office, I was responsible for working with the three regions — western Canada, central Canada and Quebec to develop national strategic initiatives such as the implementation of a commercial lines rating tool. I brought the regions together, with their respective vested interests, and we built the tool. If we had a disconnect, if one region wanted something and another opposed it, then we had to work together and find consensus.”

CSIO is essentially doing the same thing, but on a much larger scale, she says.

“I didn’t have the authority [at Swiss Re or at ING] to say: ‘I know you disagree, but this is what we’re going to do,’ just as I don’t have that authority at CSIO,” she says. “But I have developed skills throughout my career — project management, leading strategic initiatives, bringing various stakeholders to the table — that are essential in building a consensus.”

And while CSIO has been around for 30 years now, finding that consensus is more critical now than ever before. “In the last 10 years, the independent broker channel has lost approximately 10% market share of personal auto and 13%  personal property to the direct writers,” she says. “There are a number of reasons to believe this trend will continue.”

Direct writers enjoy an “efficiency advantage,” she notes. They sell one set of products which allows them to have standardized workflows with more efficient processes. Direct writers are also leveraging Internet technology to attract customers who prefer to do their insurance purchasing online.

Brokers, on the other hand, work on different company systems, each with their own specific workflow and processes. “I think driving the consensus is not necessarily going to be the biggest challenge moving forward,” she says. “It’s going to be the speed at which we can get the standards implemented. CSIO’s mandate is to build those standards, but then we can’t just leave it at that. We need to get our members to understand just how important it is to move towards using the standards. We’ll develop the standards, but then the vendors need to program them into their systems and the carriers’ systems need accept them as well.”

The Insurance Brokers Association of Canada (IBAC) has developed guiding principles necessary to deliver a technology solution designed to improve the competitive position of the independent broker channel. In a nutshell, IBAC identified a number of key principles: •     data transactions that start in the BMS must end in the BMS; •     data flows between systems electronically and transparently, without user intervention; •    all data transmissions must strictly adhere to CSIO standards;•     XML data that flows to a company’s system is processed and returned in real time; •     workflows must avoid connection to and a broker’s use of an insurer’s web portal; and •    translations are to be addressed on the insurer’s side of the transaction, not on the broker’s side.

Time for Optimism

In all of CSIO’s 30 years of existence, Smola believes there has never been a time like the present when brokers, insurers and vendors are so committed to seeing the CSIO’s mandate through.  

Why is this particular moment so promising? Smola says that despite the continuing momentum of the direct writers, as well as the fact that company portals have been out for a while now, the workflow savings and efficiencies that portals initially promised just haven’t materialized.

“Portals had a place at one point, but they are not going to stop the erosion of market share towards the direct writers,” she says. “In fact, many brokers believe the use of company portals today is actually a contributing cause of their slower market share growth because of the inefficiencies that go along with using them. These portals do not facilitate the brokers’ workflow to allow them to spend their time and energy doing what they do best — assessing each customers’ insurance needs and providing them the best coverage advice.

“The vision and guiding principles outlined by IBAC need to be respected as we work together to develop technology solutions designed to improve the competitive position of the independent broker channel in Canada. Certainly we at CSIO are committed to working with the industry stakeholders as we develop and implement industry standards that will advance the once-and-done, real-time vision.”