Why the next two months are critical for CSIO’s connectivity solution

The next two months will be critical in getting insurers’ commitment to the Centre for Study of Insurance Operations’ (CSIO) industry-wide, real-time data connectivity solution, says industry veteran Michael Loeters.

“August will be when most of the insurers are setting up their budget and strategic plans for 2027,” Loeters, senior vice president of commercial insurance and risk management at PROLink, tells Canadian Underwriter in late July. “So, the reality is, if we don’t have a commitment by October, this is not happening in 2027,” says Loeters, who is also on CSIO’s board of directors.

But CSIO president and CEO Kathryn Sinclair tells CU the timing isn’t so cut and dry. She says ongoing discussions with insurers are focused on industry collaboration and participation in the API Gateway initiative. Under the new initiative, it is proposed CSIO would be the intermediary through which brokerages and insurers can connect to each other through application programming interface (API) technology.

“Insurer participation isn’t tied to a single deadline. It’s an ongoing process,” Sinclair tells CU. “We’re continuing conversations with insurers throughout planning, procurement and development as they align participation with their business priorities and technology roadmaps.

“As the project progresses, we’ll continue working on additional insurers to expand participation ahead of our targeted Q2 2027 launch.”

At the Insurance Brokers Association of B.C.’s AGM and Leaders Conference in early June, Sinclair said the connectivity solution could be rolled out by 2027 Q2. It would keep the brokers’ system of choice, such as a broker management system. The broker would enter the information and request a quote, and the insurer’s response will come back into the BMS, Sinclair said at the time.

The API Gateway means brokers connect once and insurers connect once. CSIO is the intermediary in the connection between brokers and carriers on this ‘superhighway.’

Strong insurer interest

Sinclair reports CSIO has received “strong interest from insurers across the industry, and discussions continue as organizations evaluate participation alongside their technology roadmaps…

“The API Gateway initiative continues to make excellent progress,” she says. “We’ve had very positive conversations with insurers across the industry, and discussions continue as we work to align participation with each insurer’s technology roadmap and implementation priorities.

“We’re continuing to refine the solution with insurers to ensure it meets industry needs from Day 1. As an industry initiative, broad participation and collaboration are essential to delivering a shared connectivity solution that benefits the broker channel.”

For Loeters, it’s important to have at least five or six large carriers on board.

“There has to be enough critical mass, which I think is going to be at least five or six insurance companies that…[have] agreed to go, and I think that’s our biggest challenge between now and the end of the year,” he says. “I’m not concerned about the proof of concept being successful, I’m sure it will be.”

He adds that while carriers are supportive of the solution, “how many of them have committed to this as an initiative on the roadmap with a budget for 2027? That’s the unknown number.”

For Loeters, the biggest risk is not getting enough insurer participation. But he believes once five or six major carriers commit to the project, others will come.

Juggling business priorities

“The question of every CEO of every insurance company is going to be: ‘I’ve got a lot of priorities for 2027. I’ve got a lot of technology priorities. I’ve got a lot of business priorities in 2027. For me to feel confident and give a green light to invest in this, I need to know that I’m not the only one participating.’”

Loeters says he hears concerns from insurer CEOs that the project will ‘commoditize’ insurance. In other words, companies will no longer be competing on who’s offering the best tech solutions. That’s because the API Gateway is designed to connect the entire industry through the same API technology.

Loeters says he understands where the concern comes from, but he calls it unfounded.

“It’s not going to commoditize insurance,” Loeters says. “Because, as a broker, I’m still obligated to offer my client the right product with the right coverage, put my reputation on the line around who that insurer is, and I’m recommending [insurers] from a claim perspective, their expertise, their stability in the market, all those things.”

This lack of change and greater convenience also applies to insurers.

“Insurers will still compete on all the things they compete on,” Loeters says. “They will still compete on coverage; they will still compete on claims; they will still compete on premiums; they will compete on reputation; they will compete on their expertise.

“None of those things change.”

Sinclair said in June the API Gateway doesn’t make portals redundant; rather, it will allow information into the portal without a broker necessarily doing the work. Loeters notes the current process is too cumbersome and laborious, with multiple entries for brokers and portals of different qualities.

“What CSIO is building completely levels the playing field, because it’s all going to be the same,” Loeters says.