Tactical Tech

By Chris Paradiso

A NEW AGE OF CERTIFICATE DATA

Insurtechs are using data from insurance certificates in innovative ways

The certificate of insurance has been around since the 1970s, but it took a long time for certs to begin to move toward digitization. Here we are in 2020, and electronic processing of certificates is common. Now insurtechs are taking another step forward by using the information found on a certificate of insurance (COI) in new ways.

One company that’s active in the space is Certificial, a startup that’s working to transform the insurance verification process. It has devised a way to provide dynamic data updates that let certificate holders monitor supplier and vendor compliance. Founded by a former ACORD exec, Peter Teresi, the company can connect straight to an agency’s management system to make sure data is constantly up to date.

The change is coming because certificate holders are starting to demand it.

That’s better than the traditional process of extracting data from a point-in-time document or record. Of course, it’s identified as having been point in time, but as we all know, a lot can change between renewals. By integrating directly with the management system, Certificial can get updates daily or sometimes even hourly.

The change is coming because certificate holders are starting to demand it. Just like for all of us, nearly everything in their world has gone digital and is practically in real time. It only makes sense that they want to make certain their suppliers, vendors, and subcontractors also are appropriately covered in real time.

By having coverage information readily accessible, certificate holders can not only be aware of who might be out of compliance, but they also can take action on that information in a systematic and automated way. If a supplier is found to be uninsured or underinsured for its contractual obligations, a certificate holder could then shut off building access. This would eliminate the possibility of an uninsured event. They also could stop a payment, cancel an order, or remove system access to the supplier to ensure compliance and ultimately lower their risk exposure.

Impact on agents and brokers

With this direct connection between the data and the certificate holder, we as agents and brokers

will no longer need to be on standby to issue a certificate of insurance. At any time, a certificate holder can view the current coverage of its suppliers and even generate the most recently available COI. By reducing time spent, we reduce our agency overhead and operational expenses, and we most likely also can reduce our E&O exposure.

Think about it: Now your producers or service reps are not having to take time to generate a certificate of insurance and then get it to the customer, whether that’s by email, fax, or mail. The certificate holder is happier as well because it no longer has to wait for the certificate and can access it at any time.

Bringing this new level of automation to the process has allowed agents and brokers to start managing the vendor insurance compliance process on behalf of their customers. This kind of value-added service can help integrate our agencies into our clients’ normal business operations and have a huge impact on client retention.

The majority of independent agents—particularly the informed and engaged ones—have stopped viewing insurtechs as always being the enemy. Certificial is a perfect example of a startup offering tools to help independent agents and brokers operate more efficiently and enhance the customer experience.

The company has built a tool that lets us eliminate the COI as a way to transfer coverage information and replace it with dynamic data integrations. We still can generate a certificate as we currently do—that’s not been taken away from us. But platforms such as Certificial appropriately place the certificate at the end of the process and allow it to be generated with the most recently verified information at any given time. The certificate holder has now gone fully digital, and the possibilities are endless for how that data can be used.

The author

Chris Paradiso is the owner and chief executive officer of Paradiso Financial & Insurance Services in Stafford Springs, Connecticut. Contact Chris at cparadiso@paradisoinsurance.com.