Filed Under:Risk Management, Public Sector Risk

New Insurance Technology: The Ultimate Connection

When I first started in the insurance business as an underwriter--which doesn't seem all too long ago in my mind--collaboration required assembling teams of people in a conference room, passing memos and documents through intraoffice and regular mail, and making phone calls. Networking meant glad-handing with colleagues and contacts at seminars and social functions. Real-time processing meant dealing with the paper files that were piled on my desk in front of the CRT, which I avoided using if at all possible.

Since then, real-time collaboration and networking technology have transformed the way we live our lives and the way we do business. People may complain about the "always connected" world, but technology feeds our need to be social and linked to people across the room or around the globe. Today's collaboration solutions also offer easy-to-use interfaces in ever more powerful computing devices.

It is against this backdrop that insurers, dragging along a legacy of technology, must operate. The challenge for carriers remains how best to incorporate modern and emerging technology in ways that make it easy for employees and agents to collaborate and do business.

"Collaboration platforms are critical because you have workers spread out everywhere. You have agents and other partners you need to interact with. There needs to be a lot of information sharing going on," says Karen Pauli, research director in TowerGroup's insurance practice. "Carriers that are willing to think in new and different ways, and understand they need to compete on technology, are investing in collaboration tools and platforms and developing front ends that are intuitive and flexible."

Come Together

In a changing marketplace, collaboration can make the difference between winning and losing business. For instance, in commercial lines P&C, carriers' appetites and available programs are in a constant state of flux.

"We use over 100 admitted carriers, and our contacts at those carriers are constantly changing. Carriers change appetites for certain classes of business and develop new programs. It's impossible for us to keep a centralized database of all this information," says Cristy Le?n, business development and risk management coordinator for the Seitlin insurance agency.

Also, as a member of the worldwide agency network Assurex Global, Seitlin needed a way to collaborate within its own firm and with other Assurex partners. "Whenever we were looking at doing business in another state or other places around the world where a client had offices, it was difficult to determine which of our partner agencies and which carrier could deal with that. It was a time-consuming and tedious process to call around to see who could place a piece of business," Le?n says.

Seitlin turned to an online networking and collaboration tool from ProspX, which it began using in January 2009. ProspX allows agency staff to search for and collaborate with colleagues within the agency, partner agents, and underwriters at different carriers who have expertise in a particular class of business. Contact information comes from agents and carriers within the ProspX network. Seitlin can also augment the database with proprietary information that can be kept private from competing firms.

"ProspX is hands-on in having the carriers they partner with keep information up to date. And on the agents' side, in the event we learn that someone has an appetite for a class of business or a contact for a carrier, we can add that information. We also have a 'ProspX champion' within each agency," Le?n says.

ProspX reports having over 100 broker customers using the networking platform and over 10,000 "underwriter expertise profiles" searchable on the network. Carriers also can pay for "premier placement" in searches, a similar concept to Google AdWords. Brokers pay per user/per month, and carriers pay annually for access to those brokers based on the current amount of premiums represented by the network.

Once agents identify an underwriter and begin the quotation process, ProspX tracks the communications made within the platform. E-mail communications can be captured via an Outlook plug-in. Seitlin maintains win/loss data in the system that the agency can use to fine-tune its marketing efforts. "Over time, we're building a marketing file within ProspX that we can pull out and attach to our agency management system and analyze," Le?n says.

This is helping Seitlin identify target markets more quickly, benefiting both its sales efforts and its clients. "Unfortunately, the tendency in this business is for every man to be an island, for no other reason than information gets lost in the hustle and bustle. By capturing this information, agents are connected," says Le?n.

"Recently, a marketer was preparing a renewal submission, and ProspX popped up some carrier contacts she hadn't thought of before," Le?n illustrates. "She didn't realize they had special programs that had potentially better rates and terms for that client. That gave her the ability to get the incumbent carrier to agree to better terms and pricing. It taught her to rely on not just who you know, but who you may be missing. Although we are not in the habit of switching business, we do want to get our client the best program available."

Tracking wins and losses pays long-term dividends, as well. "When we are negotiating with carriers for the following year regarding business targets, we can come armed to meetings with better information. For instance, we can show them that, while they claimed to be a target for a certain type of business, they were only responsive to a very low percentage of submissions. Likewise, they can show us where we might have been bringing them the wrong classes or quality business. It improves collaboration and communication," says Le?n.

Building a Better UI

The effectiveness of collaboration depends in part on how easy the user interface is. Seitlin had considered other sales and CRM platforms, but chose ProspX because it was designed for the insurance transaction.

"If agents have to answer questions to use the tool that aren't related to insurance or are cumbersome to answer, they won't use it, and that was a problem we found with other systems," Le?n says. "Sales people are drivers. They need a tool that fits into the way they already work, doesn't bog them down, and gives them information to get where they need to go next."

Although it has become clich? for insurers to talk about being "easy to do business with," the phrase does describe an essential objective in UI design. People are accustomed to interacting with systems that incorporate a high-performance user interface. Carriers are challenged to provide that experience in order to attract agents--particularly independent agents--as well as customers.

"Firms need to keep in mind that, when it comes to the UI, they're not just competing with other insurance companies," says Lee Kowarski, principal at kasina, consultant to the asset management and insurance industries. "They're competing with users' expectations, which are being set by Google, the New York Times, ESPN. A financial advisor is not going to think, 'Oh, I'm on an insurance site, I can accept less functionality.' Instead, they think, 'Boy, this is clunky.'"

14 Days to 14 Minutes

"Agents need more information, easy access to multiple accounts, and the ability to do multiple tasks. They need a job support tool," says Paul Giurata, managing partner and lead solution architect at user interface design firm Catalyst Resources.

"The back-end functionality for a lot of legacy [insurance] systems hasn't needed to evolve, but the user experience needs to," he adds. "In some cases, it's still terminal based. Organizations should look at legacy applications and determine, even if they don't want to change the functionality, whether it needs a new UI."

In 2001, Farmers Insurance Group Web-enabled its legacy commercial lines processing system (CLS). Although the effort--dubbed eCLS--was a significant upgrade over the hard-coded, green-screen CLS interface, shortcomings of eCLS became apparent as the years passed. The system was designed with a product-driven, rather than agent-focused, approach, leading to redundancies and duplicate or unnecessary data entry. Additionally, while agents used eCLS, underwriters used the legacy platform interface, making it difficult for the two constituencies to collaborate.

Farmers had definite usability objectives in mind in a 2007 revamp of the system, now called Farmers Business Insurance Express (Express). The company's overarching goal was to change the system to be customer-driven, which included significantly simplifying the user interface. The system's initiative coincided with a sales strategy aimed at encouraging agents who primarily wrote simpler, personal-lines coverages to expand into more complex commercial lines policies.

Farmers went straight to the source to determine what features agents most wanted in a user interface. "Agent experience was the driving force of the project," says Paul Burger, Farmers' director of commercial IT. "We had been collecting feedback from agents on the previous incarnation of the Web system, and we also conducted agent surveys and agent and underwriter focus groups regarding what they wanted in Express."

Listening to users is a best practice, but many insurers fall short in "user experience awareness," says Giurata. "Insurance companies don't have enough people spending time studying those users. The typical approach is to have a subject-matter expert or an outside consultant [responsible for design], but they don't spend enough time with the actual users."

Farmers' listening efforts enabled the company to determine gaps and needs, which it then prioritized. In general, gaps fell into three general categories: simplifying and demystifying the agent experience; increasing the pass-through rate by incorporating more automated decisioning; and dramatically reducing the time to deliver documents such as bound policies and certificates of insurance.

"We identified that we needed to provide agents and underwriters the same interface and eliminate some of the manual steps they had to go through by prefilling data using Web-service calls to third-party data sources," Burger says. "We also wanted to automatically underwrite some of the smaller risks to free up underwriters to handle more complex accounts."

Prefill is essential to a high-performance UI in insurance, according to Pauli. "Prefill provides both speed and capability in the front end," she says. "You have to bring that from the external provider through your own corporate system, which also means you need to have enough firepower in your portal architecture to handle that prefill integration."

Farmers used Pegasystems' SmartBPM solution to power the Express platform, which it rolled out in 2007, beginning with its restaurant product. SmartBPM uses ACORD XML messaging services that serve as the backbone for interfacing with both internal processing platforms and third-party data sources. It also incorporates IBM's Insurance Application Architecture (IAA) and includes workflow templates that Farmers used to simplify and automate application and underwriting processes. Product configuration capabilities enabled Farmers to take a rules-based, template approach to extend Express to its remaining commercial lines product portfolio over the course of a two-year rollout.

"Once we had the first product created, we could build upon that template for the next products. Also, there's already a base workflow for quotes and applications within the Pegasystems platform. Underwriting rule configuration is a standard feature. We're able to do much 'out of the box' with configuration rather than a lot of custom coding," says Burger.

The Express system has accomplished Farmers' goal of simplifying the interface--and the overall application process--for agents. "Previously, there were too many data fields that needed to be entered. Now we are able to go out to D&B [Dun & Bradstreet], NCCI, Choicepoint [now LexisNexis Risk Solutions], Polk Automotive, and other sources to prefill that data," Burger says.

Also, by shifting the emphasis of the Express interface from product to user, and by using dynamic underwriting rules, Farmers has reduced the number of questions agents have to answer and eliminated redundancies and irrelevant questions. Agents also have greater visibility into the application process. "In the life cycle of the quote, agents know exactly where the application is, who the underwriter is, and how to contact the underwriter," says Burger.

That in turn has improved collaboration. "With eCLS, the application would go from the agent to the underwriter and the agent would have to wait to hear back. Now, the underwriter and agent can communicate in an online format and transfer information more easily back and forth. We've also implemented automated e-mail notification so that if a quote that has gone to an underwriter for approval has been approved, the agent can go to their queue and pick it up."

The impact of Express has been to reduce the time it takes to issue a quote and approve an application from 14 days to 14 minutes through the elimination of manual processing steps. New business has increased, thanks in part to the addition of 1,500 personal lines agents as new commercial lines producers who are taking advantage of the easy-to-use interface and automated workflows of Express.

Farmers also sees a convergence between prefill and cross-sell. Recently, the company implemented a project to apply rule logic to data from existing policies and prefill applications for other lines of coverage. "We've already seen an increase in sales by improving the efficiency of the application process," Burger says. Farmers intends to expand the application automation functionality into other areas, such as automatically offering endorsements based on account characteristics.

Burger says the only point of frustration for agents and underwriters is the speed of the Express platform. "Pegasystems takes a lot of memory--users wish it was faster. But on the other hand, we have many more agents writing commercial business today than ever before, and they are thrilled with the ease of application and the transparency into the quote life cycle. They keep asking for more and more capabilities," he explains. Planned capabilities include incorporating additional third-party data sources, Web 2.0 features, and social networking applications into the Express front end.

The Rich Internet Experience

Delivering a better user experience that facilitates collaboration continues to evolve toward pushing more functionality to the front end itself. While a modern UI can solve many frustrations of agents in dealing with a legacy platform, calculations and processing are still dependent on the back end. "Doing more without having to click through to a certain page, or having to refresh a site to perform a calculation, is a key functionality" insurers should strive for in a high-performance, rich Internet application (RIA), says Kowarski.

He illustrates the difference with a common insurance calculator for life insurance. "Users should be able to have the results change dynamically as they 'slide' their age, policy limits, or other parameters. But at many sites, you have to change the data, click 'submit,' and wait for the results to refresh," he says.

"With rich Internet applications, the software itself is defined by the experience it creates, not by the back-end system. All the Web apps before RIA have been rotary phones. RIAs are pushbutton phones, and just as it makes no sense to develop a rotary phone anymore, it makes no sense to do traditional Web development for new apps," Giurata claims.

"For new development, it's also more efficient, requires less development effort, and delivers a longer application life to do RIA," he says. "As a result, this year is the first year we've seen that if a Microsoft shop is entertaining a new application, they will seriously consider Silverlight. That wasn't the case as recently as last year."

Performance Push

"Carriers have been wrestling with internal issues to bring in rich Internet apps for a really good portal experience," Pauli says. "Also, even if the front end takes on greater functionality, the results have to make it to the insurers' back-end systems at some point. Some carriers are still hung up by what happens--or doesn't happen--between the portal and the back end. They're struggling with legacy technology that operates in batch or can't gather information sources and push it to the portal."

They also contend with an "extreme shortage" of business analysts who can translate user needs into technical requirements, says Pauli. "It's a different breed of analysts who can understand the tools that vendors have to customize systems to get some great functionality, but carriers who really 'get it' have a team of business and IT people who are focused on that goal," she says.

Carriers do realize the need to improve the UI and allow agents and underwriters to communicate, collaborate, and do business. "They're trying to get more and more front-end functionality out there," says Pauli. "But, if you're going to push that kind of functionality, it better be a high-performance interface that delivers it. Users aren't willing to wait around any longer."

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