Streamlining agency functions with a computer

By Martin Glenn, Bartlett, Baggett & Shands, Lufkin, Texas

From AA&B June 1985

Two and a half hours versus two and a half days. That's how long it takes us to run an end-of-month program on our new computer system compared with the time it took on a model we bought back in 1980.

I think that comparison dramatically illustrates just how far agency automation has come in the last five years, and it also shows the great potential computers now have to increase the efficiency of all agency functions. I our firm, we're in the process of putting this potential to work. In this article, I'll tell you about some of the ways we presently are using our new system and point out some of the exciting capabilities we expect to derive from it in the near future.

Bartlett, Baggett & Shands has been doing business in the Lufkin area for many years. The agency is a partnership owned by six persons, including myself. Tree of the partners currently are active in the firm. In addition to the partners, the agency employs eights persons. We're a fairly large firm, having more than 4,000 accounts. Our book of business is 60% commercial.

Our first experience with automation came in 1967, when we went from a hand posting system for our bookkeeping to a batch processing service. We continued to use service bureaus until 1980, when we purchased an inhouse computer system that we used almost exclusively for accounting and Texas rating. It had a 10-megabyte disk drive and a single terminal.

Our big jump into total agency automation came last year when we took delivery on an Agena system. We've been on line with it since last September. Agena/Safecom is owned by a consortium of insurance companies two of which we represent. One of these companies helped us purchase the system by extending us a 90% loan, which will be forgiven if we meet premium volume commitments for three years.

We witnessed a demonstration of the Agena software on a Digital Equipment Corporation system that could accommodate up to eight terminals. We decided, however, to select a larger, more powerful model from Digital's VAX series of minicomputers. Our system can accommodate more that 20 terminals. At present we have 11 CRTs, one for every active person on staff.

I'm the agency's office manager and head of its accounting department, and I must say that I'm pleased with the Agena system's ability to handle our bookkeeping and related functions. Our customer service representatives used to type their invoices and hand them to our computer operator, who would enter them on our former system's single terminal. Now all CSRs can input their invoices into the system.

When we enter customer payments in our cash receipts journal or process invoices on the system, it automatically records these transactions in the customer files, too. We don't have to run an end-of-day routine to bring client records up to date. They always are as current as our accounting data.

The speed of the system is of great help in our accounting routines. When we ran our end-of-month program on our old system, we couldn't use it to obtain customers' balances or for any other purpose. We would have to tell our CSRs to stop typing invoice forms for the computer operator and start preparing the bills manually. We certainly didn't want to suspend our invoicing, and thus interrupt our flow of payments, until the end-of-month routine was completed. Once the system was again available for other work, we would have to key in the invoices that had been prepared manually, thus bringing the system up to date, before starting work on new invoices. Now when we run our end-of-month program, we tell our CSRs to halt their invoicing at lunch time. That afternoon, we run our end-of-month routine. Later that day, the CSRs can resume using the system for invoicing or any other work.

We also use the system to keep track of our accounts current and to maintain production records. The system generates reports showing monthly and year-to-date production by producer, by line of business, by company, by company within a line of business, etc.

We'll be able to start using the system to its fullest potential after we've finished loading our customer and policy data into it. This is a time-consuming task, as any agent who has attempted it knows. The CSRs are entering each policy as it comes up for renewal or whenever an endorsement is ordered. We've been loading the files in earnest for about two months. The job will take about one year to complete.

By the time our files are loaded into the system, we expect to have a claims program incorporated into our software. At that point, we will have the ability to call up a client's file and review everything about that account. It will show us what policies we write for the client, covered locations, insured vehicles, etc. We'll be able to tell at a glance whether the client has a balance due and how old it is. Commissions earned from the account and total premium it has generated will be displayed. By comparing this data to claims paid, we will be able to quickly ascertain just how profitable (or unprofitable) a given account has been.

Once our files are loaded, we also will be able to make use of the system's word processing capabilities to conduct direct-mail solicitations to selected accounts.

Our Agena system gives us the ability to interface with our companies, which was a major reason we selected it. We are agency members of Insurance Value Added Network Services, and we look forward to conducting business with our companies through IVANS or other networks in the near future.

Like many agencies, we've found that personal computers lend themselves very well to rating. Since the rates and programming are kept on floppy disks, they can be updated quickly and inexpensively. We bought a rating package from Insurance Rating Systems, Inc., that we run on an IBM PC. We use this software to rate not only personal lines business but many commercial-lines coverages, too, including workers' compensation, general liability, inland marine and Texas multi-peril. The software also can be used to calculate return premiums for pro rata and short-rate cancellation, and can prepare amortization schedules.

When an agency has a system as large and sophisticated as ours, vendor support is crucial. We've been pleased with the service we've received under our maintenance contract. We dial a toll-free number to reach our Digital representative in Houston, 120 miles to the south. Whenever we've reported a problem with our hardware, Digital quickly has had someone on the road to Lufkin. Agena/Safecom services our software directly from its headquarters in Seattle, to which our system is linked by a modem and telephone line. Recently our system was shut off by a power surge. After we brought it back up, Agena/Safecom checked our system from Seattle and ascertained that all data were intact and that the programming was undamaged.

All in all, we're quite happy with our new system. It's greatly improved our accounting department operation and, as we make progress loading our files, it's enabling us to serve our clients better, too. The longer we have the system, the better it seems to get.