eData initiative update

Strong support from distributors and carriers is helping the eData initiative make giant strides towards its realization.

The eData initiative is a cooperative effort between CLIEDIS member carriers, distributors and system and software providers to develop a process for e-transactions and straight-through processing, starting with new business.

Scott Sinclair, COO, Transamerica and co-chair of the eData Bridge Group, is very optimistic about the initiative and the response it has generated. “Most distributors, and carriers for that matter, started coming to us before we could even get to them,” says Sinclair. “That’s a part of why we are feeling fairly confident at this stage, because honestly we haven’t had to do a whole lot of advertising yet to get the momentum rolling.”

The Bridge Group is a group of key decision-makers in the industry interested in developing a solution for electronic transmission of data.

The group’s biggest challenge is to bring the entire life insurance industry to one common platform. The life insurance industry in Canada is fragmented in its approach to data capture and exchange. While some companies are still fully paper-based, there are individual companies offering proprietary technology solutions.

The MGA community is really behind the initiative, but if each individual carrier builds their own data collection tool, that won’t help distributors, says Jamie McGeachin, VP, HUB Financial and co-chair of the eData Bridge Group.

“From a distribution standpoint, the centralization of this as an industry tool is incredibly helpful to us. Carriers are going to move down this path anyway; it would be better if we could do this together as an industry initiative,” says McGeachin.

The Bridge Group is promoting the initiative quite aggressively and has created a four-week window, effective today, to reach out to industry participants and to urge them to make a commitment by signing up for the initiative.

“If that four-week sign up goes well and we have a financial model and participation model around that, we would be hiring the required staff and putting the organization in place over the summer months,” says Sinclair.

He says the project is expected to kick off in September and is slated to run for six to nine months. This time will be spent on research work on the financial model and other key considerations, and a presentation will be made to the industry for final endorsement and for funding needed for implementation.

The initiative is moving along an aggressive timeline – four weeks, to be precise – a decision that Sinclair says is only logical.

“We have talked about this intensively now for many months as an industry. The four-week sign-up is to say: Are you prepared to actually put dollars, time and people on the table (so) we can get to the next stage, which is a very clear model for implementation?”

There will be a substation benefit to companies who decide to participate from the beginning, says the investigation project proposal of CLEIDIS. The proposal further states that organizations involved would be able to shape and contribute to an industry solution as well as enjoy preferred pricing versus those that don’t participate from inception. Companies that take the wait-and-see approach will not only miss the opportunity to set the course, but will also realize a financial penalty.

It may be noted that other industries are well ahead of the insurance industry when it comes to electronic information exchange. Banking and mutual funds, for instance, long ago adopted a common framework to leverage technology.

(06/22/2010)