Path to Commercial Data Standards

By: Catherine Smola, President & CEO | Canadian Underwriter, September 2018

One of the most exciting initiatives under way for the broker channel is implementing data standards for commercial lines.

The Centre for Study of Insurance Operation’s (CSIO) data standards facilitate the exchange of data between broker management systems and carrier back-end systems. Today, the use of personal lines Electronic Data Interchange (EDI) data standards is extensive. Expediting the workflow between brokers and insurance companies, the standards result in quicker turnaround times for quoting and underwriting, ultimately enabling brokers to better serve their customers. The industry is at the point where it is ready to realize those same benefits in commercial lines with CSIO’s XML standards, which are mature, robust and can support all lines of business.

Recently, CSIO commissioned the Conference Board of Canada to conduct a research study to better understand the barriers for implementing commercial lines data standards. The researchers surveyed 130 brokerages and conducted several phone interviews with carrier executives and vendors. The study found that:

  • Due to the complexity of commercial policies, it is difficult to define what information is required to quote and write commercial risks. Adoption of commercial line data standards will be most successful if handled in stages.
  • The initial cost of implementation for carriers and BMS vendors is high: broad support is needed for the industry to implement standards with confidence. Once carriers and brokers have agreed on an implementation strategy, vendors will be able to program commercial lines standards.

These insights led CSIO to form a working group involving 11 carriers and broker representation through the Insurance Brokers Association of Canada (IBAC), with the objective of defining a minimum data set for commercial risks (i.e. the basic underwriting information requirements that do not change from policy to policy). This minimum data set will provide members with a clear, defined entry point for commercial standards, reducing the cost and risk of implementation.

The same XML standards used for commercial lines also support real-time transactions that can enable brokers to quote, bind and issue policies within their BMS in a single step and significantly improve workflow for underwriters. CSIO has been involved in various industry initiatives to implement real time, such as The Guidewire Broker Connectivity Accelerator project.

CSIO’s experiences with these types of industry collaborations have resulted in processes that can be applied to any system to accept and respond to standard CSIO XML messages. CSIO is developing an XML real-time blueprint, which can be used across the industry to ensure the streamlined and uniform implementation of real-time transactions.

Work on the commercial lines data standards is among many objectives included in the CSIO’s new three-year strategic plan for 2018-21. The organization’s expanded strategic mandate also responds to changing consumer expectations for digital service.

Navigating the regulatory landscape

In order to stay competitive and meet consumer expectations, brokers must be able to provide a digital experience to their customers. CSIO works with the industry to explore digital solutions that solve broker pain points and benefit all members equally, including the recent launch of My Proof of Insurance eDelivery solution. Canadians have been clear in their demand for digital proof of auto insurance: a recent Insurance Bureau of Canada (IBC) survey shows 74% of consumers want the option of receiving their insurance documents electronically.

To understand the regulatory framework that applies to digital proof of insurance, CSIO commissioned national law firm Fasken to conduct a legal review in every province. In its 2016 report, Fasken found that across Canada, statutory change is not required; regulators have the authority to approve eSlips simply by issuing a bulletin.

CSIO submitted this report to the Canadian Council of Insurance Regulators (CCIR), which announced in 2018 that eSlips should be made available in Canada and recommended that each province move forward with approval. Currently Nova Scotia is the only province to take this step; it has reported no concerns raised by either consumers or law enforcement.

CSIO is continuing to work with industry partners to advocate for updated regulations that permit drivers to use eSlips in place of paper.

Even though regulators have been slow with approvals, brokers are already using My Proof of Insurance eDelivery to send thousands of eSlips. This widespread enthusiasm for the technology demonstrates the value that a collaborative solution brings to the broker channel. Under its new strategic plan, CSIO will continue to identify, evaluate and support similar initiatives that benefit its members going forward.

Next steps

The new strategic plan will roll out over a three-year period. While it will take time for our objectives to take shape, CSIO has taken the first steps to ensure that our industry is headed in the right direction. CSIO continues to build a strong, responsive and collaborative organization committed to improving the competitiveness of the broker distribution channel for the benefit of the industry.