Insurance distributors lambasted manufacturers for how slowly they’ve moved on electronic data transfer.

John Hamilton, president of Financial Horizons Group, a Kitchener, Ont-based managing general agency led the charge at the annual general meeting for the Canadian Life Insurance Standards Association in Toronto on Friday.

“The message is not getting through to you,” said Hamilton, a veteran of the industry for more than 30 years.

The grievance was aimed mostly at carriers that still will not accept electronic data from distributors for applications processing. At best some of the manufacturers require distributors to log into a website and manually enter information that the carriers already have in some form or another.

At worst, some carriers ask that distributors print and then fax the data for manual entry into their own systems. His presentation was labeled “We’re Mad as Hell and We Don’t Want Paper Anymore.”

The cost to the distribution industry is too high, and the cash would be better spent hiring and training more brokers in an industry that needs new talent, Hamilton argued. Two employees at his firm input commission for brokers, he notes. Another three people input details for insurance contracts.

Financial Horizons has more than 70,000 client records, but more than 1 million fund transactions and insurance policies to track for them, he also noted.

Representatives for most of the major insurance carriers were in attendance, although, not surprisingly, not a single CEO was present. Hamilton extracted promises from each representative that they would take the message to decision-makers at their respective firms.

Brian Gore, president of FundSERV Inc. — who was in attendance — noted that insurers are each stuck with legacy systems from the 70s.

He attributed quick growth in the mutual fund industry in the 90s to common data systems and coding. The fledgling fund industry was able to achieve that easily when it was starting out 20 years ago. He was on an early committee that included the first 10 fund carriers. The fund companies weren’t excited to share information to start, but eventually they hashed out the details.

Other attendees suggested that it was time for distributors to stop doing business with insurance carriers that refused to join the digital age.

The Canadian insurance industry has made good progress — mostly shepherded by CLEIDIS — but it’s “not smooth sailing yet,” noted Byren Innes, senior vice president and a director at NewLink Group Inc., an industry consultant that was hired to conduct a survey of progress for the industry.

His data showed that most new business is being transferred electronically in some manner or another. Digital filing for in-force policies is on its way, but on the key issue of common codes for products, the carriers and distributors are on different wavelengths. The carriers don’t see it as a priority, nor are they interested in opening their proverbial doors to distributors to exchange client and product information electronically because security was a big challenge.

A representative for HUB Financial Inc., a Toronto-based MGA, noted that although the firm was “imaging” (or scanning) all new policies, it was sending the files in five different ways to five different carriers — a matter that could be resolved easily.

Many in attendance pointed out that investments in this sort of fundamental information technology would cost a lot but pay back in multiples.

IE