Leaders of an insurance industry initiative aimed at creating a common eData system for new business processing is now asking stakeholders, such as insurers and distributors, to sign up to support the project and back their commitment with financial and human resources support.
"The benefits of an industry eData solution would enable the industry to reverse the costs of fragmentation: long cycle times, high processing costs, recruiting barriers, to name a few," stated a press release distributed by CLIEDIS, the Canadian Life Insurance Standards Association, on June 22.
Spearheaded by CLIEDIS, the eData project got underway with an industry summit meeting last January. Following that meeting, a bridge group made up of 20 industry representatives was formed to develop a proposal to provide the industry with clear direction and a structure for the project. In June, the bridge group presented a document called the eData Investigation Project proposal to more than one hundred members of the Canadian life insurance industry.
In a press conference held on June 22, Scott Sinclair, Co-Chair of the Bridge Group and Chief Operating Officer of Transamerica Life Canada explained that over the next four weeks, industry stakeholders will be invited to sign up for the project and provide a financial contribution and human resources expertise to enable the project to go forward to the next phase. In the proposal document, insurance carriers are asked to give $45,000, distributors $7,500 and service providers, associations and reinsurers $5,000. The proposed budget for the next stage of the project is $655,000.
Mr. Sinclair says if enough participants sign on, then the next stage of the project is scheduled to kick off in September and is expected to be completed in six to nine months. The next part of the project would involve planning details, exploring financial models related to carrying out the project, etc. A recommendation would then be presented back to the industry "for final endorsement before moving forward with the build-implementation," said Mr. Sinclair.
He added that he is "very confident" that this project will eventually lead to an insurance industry eData solution and he already sees progress. Since January, the tone of the discussion has changed from whether there is enough common ground to go forward to "Given that we would like to go forward in some format, let's talk about the challenges of what that would mean to go forward."
Another reason for his confidence is that senior executives from various carriers have been consistently contributing their time to the initiative. Not only technology executives are participating, he underlined. "It's business leaders, sales leaders, presidents of companies, seemingly understanding that this is an inevitability, so I look at their participation...and that gives me faith that we're going to make real traction."
Jamie McGeachin, Co-chair of the Bridge Group and Chief Operating Officer of Hub Financial, added that she has seen great interest from distributors in the project, especially since they know that individual insurers are moving down the eData path anyway. "But, if each individual carrier builds their own eData collection tool, that's not helpful to us as distributors. It puts us in much the same situation as we're in now where there are 32 different apps for each of the carriers in Canada and we have to support them all." From a distribution standpoint, a centralized industry eData tool would be "incredibly helpful to us," she adds.
Mr. Sinclair added that a key aspect of the next phase of the project would be to gain acceptance from advisors at point of sale. For an eData system to work, advisors must accept and adopt new ways of doing business, he explains. For this reason, the next phase of the project would include an advisor engagement subcommittee.