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Special Report: buying commercial insurance | Canadian Insurance
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Special Report: buying commercial insurance

Editor’s Note: CI-Top Broker recently caught up with Lisa Kerr, a tech consultant to brokers, about how she perceives brokers are adapting to a cumbersome commercial insurance buying process while waiting for real-time commercial data exchange solutions. Kerr has been a Canadian Accredited Insurance Broker since 1994. Before becoming president of Zynamic Solutions, she was at Nicol Insurance Inc., where she served as CFO, vice president of personal lines, and vice president of administration and finance. Below is what Kerr told us:

 

There is a lot of room to improve the current process for buying commercial insurance in Canada.

In a brokerage, fully half of the 24 common touchpoints involved in processing a single new commercial policy could be removed through automation, according to a white paper released in 2017 by the Toronto Insurance Council (TIC).

Having worked as an insurance broker for many years, I have heard many promises about forthcoming tech solutions from carriers, broker management system (BMS) vendors and industry leaders. To date, none have completely addressed my needs.

We recently met with a smaller brokerage to discuss their current processes. We found they faced the same challenges as large brokerages: they want to grow, but they don’t want to keep investing significant amounts of dollars without seeing a significant return.

Based on my meetings with various brokers over the years, I have compiled some comments about the workaround processes I have seen brokers use to process the purchase of a new commercial insurance policy. Before I share these comments, let me define the scope of my discussion.

First, there are four basic cycles in handling a commercial insurance policy: sales/new business, renewals, changes and re-marketing. I could discuss each one of these cycles in much greater depth. But for now, let’s just review the first cycle – sales and new business. Within this cycle alone, we have several stages; the process could potentially halt at each of these stages.

Sales and New Business

Phase 1: Prospecting

Good sales producers and managers should always know the answer to the question, ‘What is in my pipeline?’ A solid structure should be in place for tracking this. The good news is that most BMS solutions address this. But for the reporting to be accurate, the brokerage must be 100% committed to ensuring the data is always entered. All new prospects should be entered in the BMS and reporting is recommended.

Okay, so let’s say our sales producer has a new prospect and she can’t wait to get it on the books. She has completed the first phase by inputting a policy and an expiry date into the BMS.

Phase 2: Gathering some information

We need to know about the premises, the client’s insurance history, and what exactly this potential client does. Absent a real-time data solution at the brokerage, there are a few workaround options. Each solution has its own pros and cons:

Option 1:   Paper survey forms, applications

Pro:   Inexpensive; easy to grab and fill out

Con:   The data needs to be manually entered or types into a database

Option 2:   Fillable PDF form

Pro:   Easy to fill out and better than handwritten

Con:   Same as in Option 1 – it is not integrated with a BMS/CMS and the data can’t be searched if it is not in a database

Option 3:   Mobile app

Pro:   Easy to collect information

Con:   It may or may not bring in enough data to receive an accurate quote. Also, there needs to be integration with the BMS/CMS system so that the data doesn’t have to be entered twice.

If the data is submitted into your BMS in a seamless fashion, you can move on to the next stage. However, in many instances, this information must be typed; this takes time and is subject to errors.

Phase 3: Getting this data from your BMS to the insurance companies

You have two options here. The first is to use the carrier’s online portal. This might be good if you have a small business, there are no complications (straightforward type of business exposure) and you only want to get one or two quotes. Ideally, future tech solutions will be able to automate the process fully, so you can retrieve multiple quotes all at the same time, within minutes, without having to retype any of the information.

Company portals do come with limitations. For example, they will not likely meet your needs if the commercial business you are quoting requires a more competitive rate, or if it is a larger risk. In those instances, you will have to send submissions to your companies. A couple of key considerations attach to this.

First, in most instances, the submission will not be accepted if it falls outside the range of 90-120 days prior to the renewal. Second, you are operating under a tight deadline, so want to get this to the company as soon as possible. You need to have that email set up and ready to go for 12:01 am. The brokerage needs to have a procedure in place to make sure that this deadline is not missed, because it could result in the market being blocked.

Phase 4:  Making sure each quote is received

Assuming you meet the deadline, you need to follow up with a good tracking process to make sure the quote is received. You need to know to whom you sent the data, and who has responded. A good commercial system would have this stage of the process built into it.

You may have some back and forth with underwriters. You need to be able to track what is being asked and get the answer to the underwriter who has asked the question. A good system will gather the questions together; that means the sales producer does not have to pester the client with multiple requests for additional information. You may even have declines; likely you will want to determine the reasons why and share this with your marketing rep.

As submissions come in, there must be a method for reviewing the rates received and the policy terms so you can do a proper comparison.

Stage 5 is the presentation to the prospect to win the business. A good system will offer a professional-looking document for the sales presentation.

Successfully closing the sale is Stage 6. Once the proposal and presentation has been made to the prospect, the coverage will need to be bound; the successful company will need to have any additional information they might require prior to issuance. A binder must be issued for the client and a copy provided to the insurer.

Issuance is the final phase. A system must be in place to make sure the policy documents are received electronically. Otherwise, some sort of accounting or invoicing will need to be done in the BMS.