Brokers, with justification, often express dissatisfaction with some insurers’ clunky, outdated computer systems. However, JAVLN, an Australasian insurtech, says brokers should look at their own legacy computer platforms.
A media release from the firm warned that brokers are “yet to catch up” and take advantage of their data.
“Today’s brokers are still grappling with antiquated insurance technology, burdened by manual data entry into siloed systems,” said the release.
Dale Smith (pictured above), JAVLN’s CEO, told Insurance Business that he sees “the pain that they [brokers] go through on a daily basis” using their “very poor technology.”
Smith said it’s not just data opportunities that brokerages are missing out on, it’s also productivity and efficiency.
IB asked the CEO for a rough estimate of how many Australian and New Zealand brokerage firms use outdated technology systems to run their businesses?
“At least 60%,” said Smith. “To answer your question, all brokers use a platform, almost all of those platforms are really old and cumbersome and not very efficient and they’re not enabling the brokers collect the right data on their clients and their clients’ risks.”
As a result, he said, many brokerages are “really inefficient from a business perspective.”
Which could suggest that brokers in glass houses shouldn’t throw stones at insurers.
“I’ve had some experience with other industries and it’s nowhere near those numbers,” he said. “I think insurance is probably one of the last bastions to move forward with cloud and newer platforms but it has to be time!”
Smith said the fact that brokers operate in a regulated environment under an AFSL [Australian Financial Services Licence] means at minimum they need a computer system that enables invoicing clients for premium, paying insurers and paying taxes and levies.
He suggested that many of the brokers languishing with outdated tech don’t have the ability to do much more than that.
“Those platforms are, in some cases, from the 1980s.”
He said CBS is an example of a decades old business support computer system still used by many brokers.
“It still has a blue screen,” said Smith. “You can’t operate with technology like that anymore, it is not fit for purpose.”
He said only those brokerages that have invested in technology can take advantage of artificial intelligence (AI) and its ability to suck useful risk-related information from structured data sets. The legacy systems aren’t very good at providing structured data.
“AI needs a basis for which to add value and if you don’t have the basis to start with, then AI will be of no use whatsoever,” he said.
Smith said brokers “in particular” have suffered from underservice on the productivity side of technology.
“Brokers are being asked to interact with different siloed technology and in some cases entering the same information once, twice, three times to get terms for insurers - it’s really inefficient,” he said.
Smith said the claims process around large events like bushfires is an area where AI could have a big impact for brokers.
“I think AI could be used to gather terms from insurers,” he said. “That’s something we’re having a good think about but the use cases are endless which is what’s so exciting about it.”
Smith suggested that the technology brokers should be considering needs to be able to handle data intelligently.
“You have to feed the language models with data to get the value out and then AI is just probably part of the toolkit that proves the efficiency that a broker should be demanding from the technology,” he said.
Smith said for brokers who want to be able to use AI, updating their technology is not a choice.
“If you want to use AI, to the best of its ability, you need modern technology to do things,” he said.
However, productivity gains are also a prime result, he said, from adopting new technology.
“We’ve worked with a broker client of ours and we’ve proved that we can provide 20% more productivity on a per person basis in their business,” said Smith. “Not only do you get the technology, you can then offer your clients better service, you can then use innovations like AI - it’s a total no brainer.”
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