On Dec. 13, The Centre for Study of Insurance Operations (CSIO) announced that it is shutting down its portal project. Many reasons explain this step, but two were certainly decisive: insurers told the CSIO that they were no longer willing to finance the portal’s development, and the emergence of new competing technological solutions.
After years of development and $15 million later, the CSIO’s portal project didn’t get very far. On-line for just six months after it was rolled out to Ontario brokers in mid 2005, the portal did not attract many users. The CSIO portal initiative was aimed at providing a common technological platform for brokers and insurers to improve work flow efficiency.
In explaining its decision to abandon the project, the CSIO board of directors stated in an announcement, “The CSIO portal was designed some six or more years ago in response to the electronic needs of brokers at that time…in view of the proliferation of open market technological solutions available to brokers and insurers, the requirement for an industry based solution is significantly less.”
The organization also pointed to the emergence of competing multiple vendor solutions, in particular those based on XML Personal Line Standards, “which facilitate the ‘many to many’ connections in the insurance industry’s eBusiness space.”
But lack of funding for the project proved the decisive blow. In an information bulletin to its broker members, the Insurance Brokers Association of Ontario (IBAO) said that prior to the CSIO’s board of directors Dec. 8 meeting, “the funding partners unfortunately voted to cease funding the portal project. Without this support, the CSIO board of directors voted to shut down the portal and not proceed with an industry-owned solution.”
John Morin, Quebec’s CSIO president and president of the brokerage firm Morin Elliott and Associates, said that a mutual decision was made by brokers and insurers to stop financing the project. The insurers, however, were the main financial backers behind the portal’s development.
Mr. Morin was clearly disheartened by the turn of events. “I’ve been working on it from the beginning. I have put a lot of time into this project. For years, many brokers have spent time away from their offices and their families to attend meetings in order to provide our industry with an adequate technological solution. People have worked really hard on this.”
Other industry stakeholders also found the decision difficult to accept. The day after the CSIO’s announcement, The Insurance Brokers Association of Canada (IBAC) issued a statement expressing its “great disappointment” that the project would not be continuing. “The portal was a tool designed to bring insurance brokers to the next technological level as far as efficiency, lowering of information costs, and overall operational enhancement of the services they provide to their customers. Technology is something that our industry should embrace, not fear,” said Bob Kimball, IBAC’s president, in a statement e-mailed to The Insurance Journal and industry players.
The statement went on to add that IBAC was a major supporter of the portal since its inception and had done its utmost to drive its development through the myriad of obstacles associated with any new product. “Every industry is looking towards enhancing their productivity through innovation and technological advancement. The portal was seen as our industry’s vehicle to bring our profession to the next level of better serving our customers.”
Although disappointed, the portal’s demise came as no surprise to stakeholders. In its October edition, The Insurance Journal broke the story that the project was teetering on the brink. In IBAC’s annual report, published last fall, a submission from the IBAO stated that “Insurer commitment to the portal seems to have all but disappeared.” In that report, the IBAO also reported dismal usage rates with only 43 brokers at “full or close to full usage”.
Then, in its November-December issue, The Insurance Journal again broke the story that the Quebec broker’s association, the RCCAQ, had decided to drop its support for the portal due to repeated delays and technological obsolescence.
In that article, Hubert Brunet, the association’s general director, was sharply critical of the IBAO’s decision to launch the portal in Ontario. He said the technology was never fully ready.
His remarks have caused bitterness in other parts of Canada, he told The Insurance Journal. However, he stands by his previous comments that the IBAO made an error in launching the portal before the technology was up to speed.
The portal, as launched in Ontario, was simply a comparative rating tool. It did not yet have single sign on and submit functionality – this was the ultimate goal that the CSIO was working towards.
The IBAO says that it is currently negotiating the terms and conditions of the wind down and will be meeting with the CSIO board in early January 2006 to discuss this issue. The IBAO says, however, that portal users “can be assured that service levels will be maintained to facilitate a smooth transition.