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March 9, 2011
In 2002 Parker, Smith & Feek recognized the process for submitting and retrieving information from insurance carriers electronically was hopelessly out of step with modern technology. The vision was to create a system that would answer the decades-long goal of entering information once and having it transfer to all of the carriers that need it and having their responses return instantly. Within a couple of years we brought online our application called “MarketLINK” and, despite the silly name, it achieved this electronic dream.
To our clients, carriers and to us it was a savior. We could run reports and know exactly what the carrier appetites were for a given market, region or practice. The information entered was electronically distributed to all parties and could be used again at the next renewal. Yet the most important factor was that it was simple for everyone to use and created a direct real time connection between the broker and the carrier. Our submissions would rise to the top of the carrier list thereby helping our clients quickly receive the best coverage for their needs.
Not long after we brought MarketLINK online the insurance industry started buzzing about an industry-wide “Real-Time” idea. Not surprisingly it was a process that would allow the entire industry to achieve something similar to what we were already using. It was a brilliant concept that holds great promise but, unfortunately, it has hit a few speed bumps.
Since it was independent of the carriers and since most brokers did not have skilled database and data transfer technicians the concept needed a middle man to come to life. Like white knights riding in on silicon horses, the vendors responsible for the primary software for insurance brokers, our agency management systems, would implement “Real-Time” for us and directly connect it to the software we are already using.
To this day the software vendors preach at conferences to insurance brokers that we must use Real-Time because it is the future of the industry. Simultaneously they meet with carriers saying they must sign agreements to use their software because they do not want to be unable to communicate with the brokers. By bringing both parties to the table and handing the bill to the insurance carriers everyone would have seamless data transfer and our clients would be happy.
Not all the carriers were convinced that they needed a middle man to collect data that really is a private matter between the client, broker and carrier. Nearly every carrier kept a broker web site that often includes more features than is available in the Real-Time system – just in case. As a result the brokers find themselves using both the carrier web sites and the Real-Time software because there are different features available in each. So while this new electronic communication frontier has achieved the goal of tens of thousands of transactions it is also true that everyone is keeping one foot outside of it.
One of the concerns insurance carriers have with Real-Time is the control given to the software vendors. If at any point in time the software vendor feels like changing the arrangement they can do so and there has been some evidence recently that this is exactly what is happening. If the insurance carrier does not like the arrangement they can bail and return to their web site, which some have threatened to do, which is now forcing the brokers to think twice about putting their eggs in the fragile Real-Time basket. The utopian dream was a communication system that was direct between the broker and carrier, not this mixed up world we have inherited.
The industry has reached the moment where Real-Time should move to the next phase. In an era of HTML5, fiber optic connections, social media and decentralized networks there is no reason that carriers and brokers cannot exchange data directly. Back in 2001 when Parker, Smith & Feek started MarketLINK it was an exciting but somewhat complicated task but technology has evolved to the point that every broker could implement such a system. All the pieces to make the dream come to life are waiting to be tapped, from high speed internet to a database infrastructure that can handle direct communication, so all that remains is the basic software architecture to put the process in place. Brokers and carriers can start developing this bridge to a decentralized network and allow the relationship we have developed directly exist in cyberspace. If an independent software vendor wished they could easily sell a system that allows the communication to happen without a middle man needing to charge fees per insurance transaction and controlling the process. Direct communication is possible and with a little effort all insurance brokers can finally implement the one on one electronic infrastructure they have dreamed of for decades.