Waterloo, Ont.-based insurer Manulife Financial Corp. is taking the next step in electronic communication for distributors’ back offices.
Canadian insurance carriers and distributors want to exchange data electronically, with data moving securely between their respective systems without manual entry, says Manulife. To that end, the insurer launched the Canadian insurance industry’s first new business-notification feed in July. The feed meets new national standards for delivery of information to managing general agents and their advisors.
“Behind the scenes in the insurance world, we have a very archaic landscape of systems that have pretty much been tied together with duct tape,” says Tim Traill, director of distributor-facing solutions at Manulife. “We realize, as an industry, that we need to come up with an efficient and common way to distribute information to our distributors.”
NEW STANDARD
The Canadian Life Insurance Electronic Data Interchange Standards, an organization of insurance carriers, distributors and vendors dedicated to co-ordinating the development of public life insurance data exchange standards, finalized the Canadian insurance transaction standards guide for new business in June 2006.
The CITS guide provides instructions on what the minimum set of information to be sent is and what format — the ACORD XML for Life data standard — to send it in. This allows distributors to receive consistent information from multiple carriers.
“Eventually, everyone is going to be on the same page, which will be good for the entire industry,” says Julie Parrott, president of the standards organization. “It will save distributors and carriers money. The distributors will receive the same information from the carriers, so they know they can count on the information they receive.”
Many have been comparing Manulife’s new business-notification feed with Toronto-based FundSERV Inc. in the investment industry, which was founded in 1993. Almost all mutual fund transactions go through FundSERV, with the exception of bank-placed trades at the same bank and a few paper-based funds sold at life insurance carriers.
A mutual fund distributor who wants to check information about a client on a supplier database does not go to the supplier site but rather to a single FundSERV portal that is connected to all suppliers.
Advisors can further access the system through a Web browser and see how their clients’ holdings are doing. Advisors can even consolidate client reporting.
Insurance advisors can now log into the Manulife system and find out how their insurance cases are doing and what business is still pending, Manulife says. Advisors can also view the underwriting status of polices on a daily basis, which greatly reduces time spent on inquiries and follow-up calls.
Calgary-based VirtGroup Inc. , a major back-office vendor that specializes in a distribution management system called VirtGate, is already using the Manulife system. “The system is working great,” says VirtGroup president Tim Fitzpatrick. “Manulife has been fantastic. It listens, responds and quickly patches up any glitches when it can. It has a fantastically enlightened approach to technology.”
Fitzpatrick estimates that once Manulife’s CITS-approved new-business feed is implemented across all carriers, it will free up the time of more than 100 full-time employees at more than 40 of VirtGroup’s MGAs. He conservatively estimates a savings of $3.5 million a year. “And that is just across our customer base of insurance dealers,” he adds.
Manulife says that even with the competitive relationship that exists between insurance carriers and distributors, co-operation in the creation of a common standard is necessary for the industry to move forward.
OTHER CARRIERS
“If anything, there is more pressure put on vendors now to take advantage of the standardized feed,” Traill says. “I assume there is more pressure on some of the other insurance carriers to get their feed into this format.”
Manulife says that it wanted to create a system that was not competitive but that would enable the vendor market to evolve while allowing distributors to deal with multiple carriers.
The company believes that other suppliers will develop similar systems in the near future.
“All the major players in the back office have been waiting for this for a long time,” says Traill.
“I know that other people will be following suit with this technology,” he adds. “We just happened to be the first out of the gate.” IE
Manulife launches notification feed
Similar to FundSERV, the new system promises to centralize data exchange
- By: Clare O’Hara
- October 3, 2007 October 3, 2007
- 15:39