Paper Routes

Going paperless by creating electronic policy documents is ostensibly about reducing an insurers’ environmental impact, but the route to paperless may instead be creating a new impact on insurers’ brokers. Whereas some consumers welcome the idea of having often-lengthy insurance policies and endorsements land in their inbox rather than on their doorstep, some brokers are voicing concerns that this new method of policy delivery may be creating more difficulty in their workflow. In a worst-case scenario, a broker may be left out of the insurer-consumer loop altogether, leaving the broker without a copy of their customer’s policy.

Part of the problem, brokers say, is that currently no industry standard dictates a protocol on how the policy is ultimately delivered to the consumer — i. e. whether it’s sent directly from the insurer (and thus potentially bypassing the broker altogether), or if the broker is responsible for plucking it from the insurers’ respective portals and then passing it along.

The Centre for Studies in Insurance Operations (CSIO), which creates standards for the industry’s paper and electronic data, says such a protocol for policy delivery falls outside of its mandate. CSIO president Steve Kaukinen says the centre establishes standards for what the data should look like, but not how it is transferred from one party to another. That sort of process, he added, would be up to the carrier and the broker.

LOWERING IMPACT AND RAISING INEFFICIENCIES

Efficiencies in broker workflows have always been a point of contention when it comes to developing and applying new technologies. What some see as a positive step forward in terms of leveraging new technologies can also create extra steps in the processing cycle in a broker’s office.

“The lack of an industry standard mechanism for brokers obtaining electronic policies certainly comes up from time to time in broker circles,” says Richard Shallhorn, the chief information officer at HKMB Hub in Toronto. “Some companies send those electronic documents, the broker’s copy, to the broker via email. Some of the carriers have the broker go to their portal and have the broker download that document. Some of them have a combination of things: the broker is alerted by email that the policy is ready for pick-up on the portal. That’s just not in the interest of the broker.”

Debbie Jodin, director of personal lines at Rhodes & Williams Insurance Brokers adds that while a benefit of electronic policies is having the exact same document that the client is looking at when answering questions, not all documents are provided in PDF format, making it difficult to print or extract specific pages of the policy. Also, she continues, no two insurers provide the same means of document retrieval.

A standard mechanism, continued Shallhorn, would ideally see an insurer send the policy documents in a structured fashion.

In situations in which the policy is sent directly to the consumer, Anna Baginski, vice president of Lyon & Butler Insurance Brokers Ltd., said the process might potentially create confusion and frustration for the consumer — the exact opposite of the intended effect of going paperless.

“When we [brokers] get the actual documents, we review it for the accuracy of the information printed on it,” Baginski says. “And then, if there are any mistakes, we can correct that right away without going to the consumer and without upsetting them.”

She added that sometimes policies are re-issued and re-sent when small clerical changes are made that don’t affect the coverage. “It would create even more confusion if those were all sent to the consumer,” she said.

Baginski agrees with Shallhorn that situations in which copies of the policies need to be retrieved one-by-one from insurers’ respective Web portals is labourous and therefore costly to the broker. “In the beginning, that was okay,” she says. “But we’re gearing up towards the option where the insurer would be sending it straight to our vendor system and it will be attached to our client’s file.”

CLOSING THE LOOP

Peter DiSilva, vice president of personal lines at Intact’s Central Atlantic region, explains that the newly-named insurer is in the process of developing its paperless policy. He says Intact’s vision would not take brokers out of the loop, but rather would have “the broker using emails and standard email protocols to get the information and to send the information.”

Intact is still sorting out whether the broker in the near-term will retrieve the policy from Intact’s site or if Intact will send it out to the broker. But “our ultimate vision is that we would drop it into the broker’s management system,” says DiSilva. “There may be an interim step before we get there.”

So-called “middleware” technology has yet to be developed that would allow the policies to be dropped from the carrier directly into a broker’s BMS.

Gore Mutual ventured into the paperless realm in 2004. Now all policy and claims documents are currently stored and used in an electronic document management system. In 2005, brokers gained real-time access to Gore’s policy documents, and brokers can now email policies to clients using GoBroker. It’s currently working to deliver a system that would allow “instant broker-branded, electronic delivery of documents,” a Gore Mutual spokesperson says.

The inclusion of the broker brand when delivering policy documents is key, says Cory Young, vice president of Rhodes & Williams. While Young supports electronic versions of policy copies, he also cautions that the value of a broker extends beyond just sending documents. “If [a policy document] was stored on the company site, accessible through the broker Web site — with our branding and our “face,” and not that of the insurance company — I believe this would be a win/win/win (client/broker/company),” he says.

“I have heard arguments from other brokers about delivering the policy being a key point of contact for the relationship with the client,” he says. “I feel we need to bring a lot more value to the relationship, rather than forwarding on documents from the company, to our clients, in a format that they no longer want or need.”

Brokers can bring more value by being aware of a client’s life changes — such as retirement, purchasing a new home, etc. — and discussing with the client how such changes might affect their insurance coverage, he says. “Seeking other value-add points of contact is how we win,” he says.

In November 2008, Aviva Canada also commenced a process to reduce its environmental burden, says Maurice Tulloch, executive vice president of Ontario broker and specialty distribution at Aviva Canada. One of the first steps is to eliminate the distribution of paper copies of policies to brokers.

“But we want to build a system whereby the broker could receive a digital copy and even more importantly than that, we’re developing a system whereby a PDF version of the policy would be downloadable to the brokers’ BMS and can be attached to existing policyholder information,” he continues.

Technology does exist today that would allow this, DiSilva says, but it does not integrate well with the insurer’s legacy systems. “Over the next two years, there is a priority to really get a handle on how we manage our documents with our brokers and really get this thing to come to fruition.”

Baginski remains confident her insurer partners will make it happen.

“When [the electronic policy] option came up, it was really enjoyable, but now it creates too many problems for brokers having to retrieve those,” she says. “When I speak with insurers, they all think [creating a process in which the policies would be downloaded into the BMS] is a great idea. I think it’s feasible and it will happen — just not in the next month. But I have big hopes that it’s going to happen soon.”

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“Middleware” technology, it would seem, has y et to be developed. It would allow policies to be dropped from the carrier directly into a broker’s BMS.