SEMCI: The Alternative to Herding Cats

by Karl Greenlaw, President and CEO of Brovada
As published in Canadian Underwriter Magazine, February 2011

It has been eleven years since the start of the ‘CSIO Portal’ project and over six years since it was officially terminated. Its goal was to provide a standard medium through which all insurance related transactions would flow; adding value to company and broker workflows alike. After five years of toil the project was shelved and now serves as a cautionary tale to those looking to implement industry-wide solutions. So what went wrong? Was it the lofty scope or the closed-door politics that sealed the fate of something that, on paper, sounded so good? What happened to the SEMCI (Single Entry Multiple Company Interface) dream?

A good place to start is to understand how things may have played out if the project had not been cancelled. If the CSIO Portal project had succeeded, would today’s landscape be different? The answer is a definitive Yes. Brokers would have the efficiencies and real-time access to data required to compete with the direct writers. A brokerage’s operating expenses would be reduced as there would be no need for a separate quoting solution. In fact, one natural evolution of the CSIO Portal could have been the introduction of real-time interface feeds allowing brokers to capture and send data using CRM’s and accounting systems. Systems such as Salesforce.com or Microsoft’s Dynamics CRM would have provided the more tech savvy brokers with the ability to circumvent the need for a traditional BMS and leverage mainstream software packages that are less expensive and more functional. Insurers would still need to compete on price but the true differentiator would be on the quality of service and highly influenced by the ability to effectively handle claims. The insurers and brokers who initially decided not to participate in the CSIO Portal would either have to succumb to the Portal’s benefits or risk losing their competitiveness to participating companies. Direct Writers may still have gained ground but not at the pace or to the extent that exists today.

So herein lies the problem, if there was so much merit in the SEMCI-based Portal, why did it fail? Perhaps it was because of the dependency on an industry-wide technical adoption of its use; a commitment that was surmountable from a technical perspective but whose political implications were too hard to overcome. The triumph of the participating brokers would have been the demise of many of the vendors in the marketplace ranging from BMSs to quoting solutions. The fierce competition of the insurers, whom for the most part are heavily focused ‘for profit’ organizations, would have made the creation of a level playing field almost impossible. Shareholders, looking for a return on investment, would still want differentiation thus adding to the political pressure of maintaining as much competitive advantage as possible. The fact that the CSIO Portal initiative survived as long as it did is an impressive feat and a testament to its proponents. Unfortunately, with the lack of ‘critical mass’ adoption, the Portal couldn’t build the momentum it needed to navigate the political obstacles in its path.

Is there a way of making SEMCI a reality? The answer is again a definitive Yes. But let us be clear as to what SEMCI is, and for that matter, what it isn’t. SEMCI as a single solution will not work, but as an end-goal constantly strived for it will begin to deliver on its promised efficiencies yet remain flexible enough to implement. No all-encompassing solution that demands total assimilation will have the political support required to generate a ‘critical mass’ of adoption. SEMCI is not a piece of software, rather it’s a mindset and approach to achieving the ‘start and finish in the BMS’ workflows.

So how do we get there? With the increased competition of direct writers coupled with the constantly evolving technical landscape, how do we as an industry work towards the SEMCI goal?  Brokers have been adamant that insurer portals are taking them in the wrong direction. Though there have been significant advancements made by companies to minimize the impediment of portals they are still saddled with the burden of duplicate entry and the fundamental assumption that brokers will need to leave their BMS to access them. One approach has been the automated integration between brokerage systems and insurer portals by way of connectivity solutions like WARP and Nexisys. Nexisys also provides automated upload functionality whereby the broker only addresses exception data. These implementations improve efficiency so dramatically (up to 80%) that brokerages who refrain from using them not only affect themselves but unknowingly harm the entire brokerage channel. If we as an industry don’t take advantage of the tools that provide significant efficiencies we will lose the opportunity to serve our clients. One of our partners shared the fact that, based on their market data, there are close to 1000 less independent brokerages today compared to a decade ago when the CSIO Portal initiative was just starting. It’s survival of the fittest as the books roll and companies merge.

There are solutions that are in production today that will get us close to our SEMCI goals. Recently we have had the pleasure of being involved in a number of carrier-projects leveraging our NexExchange product suite that are focused on a non-portal upload model. The feedback has been phenomenal as brokers now have the ability to work from within their respective BMS and only enter a limited number of company specific questions. Use the data in the BMS, supplement it with company specific questions, and send it to multiple carriers with one click.

As carriers, brokers and vendors work together it’s imperative to ensure that we provide the ‘critical mass’ adoption of the solutions that enable SEMCI workflows in order to overcome the political and technical challenges of wide-scale change. If we’ve learned anything it’s that a single technological solution cannot be forced on the industry; indeed we’ve seen time and again that attempting to herd the cats is not the answer. Rather if we work together as an industry to define the best practices and let the natural pressures of competition define how vendors and carrier IT teams work together to deploy them, we can achieve what we set out to achieve so long ago.