New Tech Puts SEMCI Within Reach

Single-entry, multiple-company interface, or SEMCI as it ispopularly known, has been the “Holy Grail” of independent agentsfor more than 25 years. Its the ultimate agency ease of doingbusiness technology, and a worthy goal. Much effort has been putinto implementing SEMCI over time.

Nonetheless, for many reasons–inadequate technology platforms,proprietary agendas and industry politics, just to mention a few–ithas always been more of a dream than a real-world possibility. As aresult, many people in our business have become contemptuous aboutthe subject.

Today, however, the SEMCI game is changing–big time! Priorhistory notwithstanding, functional SEMCI capability could be justaround the corner. If, that is, we are all willing to “pay thepiper.”

What has changed? Simply put: the Internet, XML and IVANS'“Transformation Station.” The combined technologies enable 100percent accurate, multiple-company, real-time quotes againstcarrier edits from the agency management system desktop. With thistechnology broadly in place, the way we do business changesdramatically, and for the better.

What is Transformation Station? It is a “black box” that sitsbetween the agent and the company (and any other business partner,for that matter), and translates data formats and manages messages.The translation allows applications using dissimilar data formats(XML, AL3 or others) to share information with each other.

Business can be conducted through a single infrastructureregardless of platform or programming language. In the finalanalysis, Transformation Station is a viable SEMCI solution, aworkable technology, and one that can be implemented quickly.

The new technology actually transcends the original concept ofSEMCI. Today, a term such as NETART–nominal entry to anyone realtime–more accurately describes the potential for interface.

Nominal entry suggests the potential for directly importinginformation from other databases, or having the customer do dataentry. To anyone incorporates the possibility of easy data sharingwith all trading partners. Real time means instantaneous, ascompared to batch communications. The “NET” makes significantlyimproved communications and workflow possible, while the “ART”comes in assembling the technology in such a manner as to reduceoperating expenses of companies and agencies in the process.

How have the stars aligned to permit SEMCI to become a viableoption? The really big difference–the one that genuinely changesthe game, is the fact that both Applied Systems and AMS Services(the two largest agency management system vendors) are workingclosely together to facilitate Transformation Station development.Additionally, DORIS, a smaller vendor, has decided to incorporatethe product.

In effect, over half of the independent agencies in the countrywill soon have a potentially SEMCI capable platform throughTransformation Station, with the hope that additional vendors willjoin this effort in the future.

The Transformation Station sales story to agents, obviously, issignificantly enhanced agency effectiveness and cost reduction. Ifcustomer service representatives can get multiple-company,real-time, bindable quotes without leaving their managementsystems, and without duplicate data entry, why would they want todo business any other way (no matter how good the proprietarytechnology)?

One answer, of course, is if a carrier without TransformationStation capability has a substantially better price/product valuecombination. All things being equal, however, placing business withTransformation Station capable carriers is likely to become thepreferred course for many agencies.

What has to occur to make SEMCI a reality over the next threeyears?

First is widespread adoption of the ACORD XML standards forinsurance. Use of these standards is absolutely critical topositioning the company and vendor to use Transformation Stationand other real-time technologies most effectively.

Standards simply help solve big problems, and SEMCI is one ofthe biggest problems we face. Here, we need a mantra: “Theapplication must have ACORD XML on board.”

Second, agent associations, user groups, agency managementsystem vendors and IVANS must evangelize the Transformation Stationstory. It has to be a massive agency education campaign.

In turn, agents have to regularly and repeatedly tell theirinefficient workflow and real-time processing needs story tocarriers at all levels of management. The stories have to be tolduntil decision-makers get tired of hearing them and say, “Okay,okay, we get it; we'll do it.”

Third, and certainly not least, we all are going to have to makea very large financial and development effort investment. Thisincludes carriers, management system vendors, IVANS and agencies.SEMCI is possible, but not inexpensive.

Carriers must come to identify with the negative impact thatdealing with a multiplicity of separate company Web sites isstarting to have on agencies because of the separate log-ons, theentry of data multiple times, and the need to master a host ofdifferent company work flows and codes.

The net result is that rather than freeing up agencies to selland grow as the companies want, technology is overwhelming agencieswith servicing work. Agents need single-entry with multiplecompanies and real-time processing. Transformation Station is thetechnology that has emerged that has the best chance of achievingthe necessary industry critical mass.

The agency management system vendors must understand andappreciate that multiple-edit systems are a substantial barrier tocarriers adopting Transformation Station in significantnumbers.

Essentially, carriers all have unique approaches (for example,underwriting questions, pricing, coverage) to any particular pieceof business. Their technology applies unique “edits” to thetransaction before the company can present a bindable package backto the agent.

This is a major issue. The edit problem has to be solved. Acommon-edit methodology is necessary and it needs to be put inplace soon.

IVANS needs to look at Transformation Station transactionpricing very closely. It is another substantial barrier to carrieradoption. The price structure has to be made more attractive withthe promise of further reductions as volume builds.

Agents have to invest in upgrading their management systems toversions that support Transformation Station functionality. Thismeans hardware, software and training investment. Today,unfortunately, many agents systems simply are not ready forSEMCI.

Moreover, agents need to appreciate that however attractiveSEMCI is for them, it is often perceived negatively by carriers,which see it as comparative rating in real-time at the click of amouse. SEMCI, whether we like to face it or not, is perceived assomething of a marketing risk to carriers–and perception isreality.

Agents, then, have to make taking the marketing risk worthwhilefor companies. How? Simply by committing to grow with the carriersthat invest in Transformation Station technology, and then actuallyfollowing through with that volume as long as the carrier is withinthe competitive arena.

The payoff for following this simple but difficult formula forsuccess is achieving SEMCI critical mass and a quantum leap forwardfor our industry.

The technology is no longer the primary obstacle. There is noone to blame but ourselves if we fail to seize this opportunity. Inthis respect a quote favored by an old mentor comes to mind:

“Upon the plains of hesitation bleach the bones of countlessmillions who, upon the verge of achieving success, sat down towait, and waiting they died.” Let's not wait to leverage thetechnology available in the hope that something better will comealong. If we do, some innovator, probably from outside ourindustry, is liable to trample our bones into dust.

(The Agents Council for Technology is a group of agents,companies, vendors and associations assembled by the Alexandria,Va.-based Independent Insurance Agents of America to promote andfacilitate the use of effective technology solutions and businessprocesses within the independent agency system.)

John Carmody is assistant vice president of corporatemarketing and communications for Seattle-based SAFECO Insurance,which is a member of the Agents Council for Technology. Opinionsexpressed in this column may not be reflective of the entire ACTmembership.

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.