AUGIE Proves Agents Case

We agents and our staffs individually have felt the pain abouttechnology and workflow for decades, and now for the first time wehave collective proof that were all in the same boat.

That proof comes in the form of the most comprehensive study ofagents and technology ever undertakenrecently completed by theACORD User Group Information Exchange (AUGIE). Lets take a look atsome of the findings of the survey of some 9,000 agencies.

Duplicate entry and proprietary systems are significantbarriers to workflow and interface.

As the growth in proprietary carrier systems or vendor andthird-party solutions increases and the realities of multiple dataentry come into play, an agencys cost for training and educationbecomes prohibitive.

Broadband access to Internet is more widely used thanexpectedcarriers and vendors must build systemsaccordingly.

Agents and carriers alike need to keep abreast of technology.Carriers need to better educate their field reps on technologyissues and what upload and download means, the impact it has onagents, and what the carriers capabilities are.

Carriers need to understand a simple and inescapable fact: Youragents are your sales force. If theyre frustrated or slowed down byinefficient workflow, you will not get as much premium volume.

To be sure, carriers have been investing in proprietary systemsand Web interfaces for agents. Many agents view this as a positivestep, although certainly not a means to an end. Carriers shouldntthink when they hear, “We love your Web site!” that their jobs arecomplete. And they shouldnt think download equals single entry,multiple-company interface, or SEMCI. It does not.

While carriers obviously tend to look at the world from theirpoint of view, they need to get around 180 degrees to the otherside of the table with their business partners and look at businessfrom the independent agents perspective.

We agents represent an average of eight carriers each. We agentsneed to look at entire accounts, not a single piece of businesswith one company. We agents need to provide comparisons for theconsumer. In todays market it is incumbent on agents to look atseveral alternatives for our insureds. With coverage reductionsandin some cases, coverage eliminationsalternative rates areessential. When you multiply a particular carrier solution by manycompanies, you can see how inefficient our world has become.

In a recent agency workflow study, ASCnet sought to quantifywhat it costs in time to deal with various workflows. In severalagencies, we looked at business flow for new business and policyservice. The survey found that an industry SEMCI solution,called IVANS Transformation Station, took seconds where proprietaryWeb sites took minutes. For example, for new BOP business ratingand issuance, from start to finish CSRs took seven minutes to getthree comparative quotes via Transformation Station; it took them64 minutes via three carrier Web sites.

A billing inquiry, for example, took two minutes viaTransformation Station, eight minutes on the phone, and nineminutes on the Internet. Over the course of a day or week in thelife of an agency, youre looking at many hours of wasted time induplicate entry, entering Web sites and training staff. Agents andCSRs need more time to market, sell, service and buildrelationships.

Moreover, there are also immeasurable costs to agents(and companies), the time study found. These include explaining tothe customer why the quote doesnt match the rate, why her name isspelled wrong on the policy, why it took so long to get the policyto her, and why state agencies, lien holders and others are notproperly notified.

Meanwhile, the AUGIE survey shows that CSRs and agencyprincipals are apt to take the path of least resistance, e.g.,carrier Web sites, and say they prefer that when, in fact, theydont know a better way yet. Thus, we caution carriers to be carefulto place individual AUGIE survey questions and answers in theiroverall context. Do CSRs like proprietary systems? Surethey getback an accurate quote pretty quickly. But in the absence of analternative, what else are you going to do?

Carriers are hearing, “I like your proprietary site.” Theacceptance of this as a temporary solution is not a benediction ofthe solution. It is merely an affirmation that the current systemis an improvement from the old system as carriers move to a SEMCIsolution.

We think its fine for companies to develop a Web site and areal-time automation solution. But we ask that they go one stepfurther and invest in their automated agents, who areprobably responsible for 80 percent of their business. They shoulddevelop that additional pipe to their agents with TransformationStation using ACORD standard XML. Transformation Station providesflexibility to carriers. For example, they can have the uniqueedits on the company side or on the agency management systemside.

Based on what we agents already knew, which is validated in thenew AUGIE study, we urge insurance carriers to provide moretechnology leadership to their staff in the home office, andparticularly field offices. That education must go beyond simplywhat the companys Web site can dothe field staff must have aworking knowledge of upload and download and agency workflow.

Carriers, too, should encourage their agency plant to get onboard with an agency management system, and keep it updated.Carriers are getting most of their business from agencies withmanagement systems, so why cater to a smaller percentage of agentswho make it more expensive to deal with you? Agency managementsystems have more than 90 percent of the market share, and probably95 percent of commercial lines premium. Thats billions of premiumdollars.

There are thousands of independent agencies equipped forreal-time SEMCI using ACORD XML. Applied Systems alone has 80,000desktops ready with the new technology, representing some $40billion in premium. We urge companies to get on board. The goal isto put independent agents and their companies in a better positionto compete.

Carriers often say theyre concerned about the cost of acquiringnew business. Agents, too, have acquisition costs to get newbusiness. Remember that we need to manage the entire account, notjust a single piece of business with one company. Agents arespending too much money going after various markets with multiplequoting and keying it not once but two or more times. Were askingcompanies to pay some of the acquisition cost by investing inTransformation Station. Theyll get it back in spades. For example,100 percent accurate policy applications are worth a lot. Areal-time ratenot a tentative quote, but a ready-for-prime-timerateis worth a lot.

This is a competitive environment. Who wins the business? Thecompany has to be in the competitive price arena, as the AUGIEsurvey found, but if it offers a straight-through-processingalternative, agents will choose the path of least resistance.

IVANS Transformation Station is the most obvious way for agentsand carriers to get to a clean, true, real-time SEMCI workflow.Even those carriers that have invested in proprietary, real-timequoting on the Web site are 90 percent of the way towardsTransformation Station, an industry-wide solution.

Peter Anderson ([email protected])is president of both the Applied Systems Client Network, (ASCnet),and of Marshfield, Mass.-based Anderson Insurance ServicesInc.

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, July 22, 2002.Copyright 2002 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.