Page 12 - CU-20200201.pdf

DECLARATIONS
SURVEY SAYS...
BMS provider consolidation
Canada’s broker management system (BMS) providers have been active
in the M&A space over the past five years. Examples include Applied Systems’ acquisitions of TechCanary and Indio; Acturius’ acquisition of Power Broker, and Vertafore’s acquisition of Keal Technology, to name a few. One hundred and thirty-eight Canadian brokers told us how they feel about choice in a consolidating BMS market.
How do you feel about existing choice in the BMS tech vendor marketplace today?
A lot of variety
Some variety
Neutral
Little variety
No variety
Would you like to see more or fewer BMS tech vendors in the Canadian P&C marketplace?
Far more
8% Some more 45% Existing is fine 42% Fewer 4% Far fewer
1%
5% 35% 25% 32% 3%
Council, said in November when asked about BMS provider consolidation.
What is the impact, if any, of all of this consolidation on brokerage operations?
Canadian Underwriter put the question to brokers in a recent poll. Out of 138 responses, about two-thirds of brokers said BMS provider M&A did not affect their operations at all. Of the 34% that said it did, 44% reported a negative im- pact, 23% said the impact was neither positive nor negative, and 21% said it was positive.
Where brokers most noticed the dif- ference was in their operational plan- ning. “We moved to TechCanary and Ap- plied purchased it and shut it down six weeks after we launched the new man- agement system,” said one broker in the survey. “We recently purchased Indio and now Applied has purchased them...”
A second broker said their brokerage was using Policy Works, but then they moved to Applied’s Epic. “We made the decision to spend months creating a commercial application and started entering the data from Policy Works to Epic,” the broker reported. “When it was announced Applied acquired Policy Works, it felt like months of work was wasted.”
In an attempt to avoid these types of administrative hiccups, one broker took the cautious approach: “Was planning on reviewing options to switch,” the bro- ker said. “Now holding off again to see how the M&A pans out.”
Tech vendors acknowledge the ad- ministrative headache of duplicate entry. But in the case of Indio and Applied, the products are complementary, said Ap- plied CEO Taylor Rhodes. Consolida- tion also helps close this “painful gap,” he said. “A broken process full of paper and PDFs, duplicate forms from many carriers that [brokers] have to fill out in a painful way that often asks for all simi- lar information.”
CONDO RISK CZAR | JAN 7
As condo coverage becomes more difficult to obtain, Insurance Bureau of Canada (IBC) announced it is “engaging” a risk manager who can make practical recom- mendations to condominium corporations to reduce their risk.
For example, with Indio’s solution, Rhodes said, there is a smart, intuitive way for brokers to pre-fill and de-dupli- cate a lot of these forms in a smart form library. The benefit for the agent or CSR is improved workflow management. “It tells them when a renewal is up, what steps they’ve taken, where the custom- er is in returning their form, and really walks them through, in a foolproof way, the entire renewal or application pro- cess,” Rhodes said.
Asked if consolidation improved their workflow management, brokers
were largely neutral (48% of 120 re- sponses), with 24% disagreeing and 21% agreeing.
Many brokers did agree that consol- idation will lead to better connectivity between their brokerage and insurers (45% of 120 brokers agreeing, 28% neu- tral and 16% disagreeing).
Also on the upside, concentration is bringing new players into the market, Rose said, citing the example of U.K- based Acturis’ acquisition of Power Bro- ker. “So, I don’t think it’s fair to charac- terize it as all negative.”
LIABILITY MARKET | JAN 6
In a hard market characterized by shrinking returns on several lines of business, “many general third-party liability treaties are ancil- lary to traditional property treaties and have generally remained profitable for (re)insurers,” reported reinsurance broker Willis Re.
12 February 2020 | Canadian Underwriter