Insurance buyers have enjoyed a soft property-casualty market since 2007, and while there are some signs of the market hardening, most experts project that current conditions will likely continue for another two years.
The importance of expense control and organizational efficiency has become more critical than ever. In addition, rapidly changing technology can create challenges, particularly for the independent agent distribution channel. Many insurance carriers are re-evaluating their IT infrastructures and going beyond traditional ways of cost cutting to focus on transforming their business to create market differentiation.
Carriers have identified several key technology priorities, according to a recent IVANS survey. Forty three percent of property-casualty carriers surveyed are investing in new or upgraded policy administration systems to improve internal capabilities and operations. More carriers are also looking to invest in consumer portals to provide self-service functionality and online research options to end customers. The IVANS survey found that 47 percent of carriers already have a consumer portal or are currently implementing one, and 18 percent have plans to put one in place over the next 12 months.
While upgrading existing or implementing new technologies is important, the real challenge is creating a clear strategy that aligns technology with the business strategy, and optimizes the benefits with a carrier’s partners. This is not always easy. Legacy systems can impede a carrier’s ability to improve customer service, streamline workflows and quickly react to market changes. For most, however, modernizing that system is an ongoing challenge that is typically complex and expensive, sometimes rife with internal politics and almost always time-consuming.
There are readily-available and affordable technologies, such as download and real-time, which can be implemented quickly and can help to maximize a carrier’s larger investments all the way through a carrier’s agent channels. For example, in the past, some older policy administration systems did not have the flexibility or functionality to support interface technology.
This is no longer the case, and carriers investing in new systems and upgrades should leverage this opportunity to reach out to their agents to automate agency-company interface workflows. Alternatively, if download and real-time have already been integrated, the carrier should ensure the evolution of these technologies continues in the new system and, in fact, consider expanding automation into other lines of business. Doing so not only increases the chances of a carrier being selected by agents to write new business but agency-company interface technology can facilitate the growth of other IT investments, such as consumer portals.
To help carrier realize the full potential of their IT investments and successfully transform business, the following outlines some proven best practices that are relatively inexpensive and easy to follow.
Getting Everyone on Board Internally
A carrier should not think of improvements to the infrastructure as solely an IT project. Rather, the objectives and goals should be translated into business terms that will reinforce and support the insurance company’s overall strategy. This can be done in part by assembling a group of key stakeholders that can help flesh out the value proposition and supervise the project once it is underway.
Knowing the requirements and assessing the functionality will help gain insight into what the end-users actually do and where the gaps are, so a business case with carefully collected data can be presented to senior management. For example, carriers should visit with as many agencies as possible to find out what they like and don’t like about automation technology, and discuss deficiencies and how they can be addressed.
Questions concerning the agency-company workflow and learning about current obstacles and redundancies agencies manage daily will also help the carrier better understand what is driving the need for improvements. Carriers should also leverage industry organizations (e.g., ACORD) that have extensive knowledge on what it takes to successfully implement automation. And, putting a budget and a cost-benefit analysis together, combined with a strategic internal/external communications plan, will facilitate universal buy-in—from C-level executives to front line employees and agencies.
When implementing technology internally, a strategy that incorporates training, education, online resources, or all of the above, is essential to the project’s success. After all, if no one uses the technology, a lot of time and money has been wasted.
The same is true when implementing automation technology for independent agents or brokers. For example, while the use of real-time and download continues to increase, 60 percent of agents surveyed by IVANS in May 2011 said the number-one reason they are not using real-time or commercial lines download technology is because many carriers are still not offering it.
Agents are looking for ways to reduce redundancies and streamline their workflows, so they can increase their responsiveness and focus more on up-selling and cross-selling opportunities. However, carriers want to ensure agents will adopt this technology and are looking for a solid return on their investment. As a carrier, how do you make certain that once you build it, they will come?
The definition of download is taking data from the carrier and providing this data to the agency in an effort to keep the agency current with policy revisions made by the carrier through transactional processing. The trick is in providing the data in such a way as to preserve data the agency has that the carrier is unable to provide.
When implementing this technology, there are guidelines carriers can follow to assure the project runs smoothly and that agents adopt the technology. First, a carrier should evaluate its lines of business to determine which are available, how many policies there are for each line and then survey the agencies to determine which line(s) would be best suited for automation.
Having this information along with selecting an experienced implementation team that is ACE certified, and has a deep knowledge of agency management systems, and commercial/personal policies will save a carrier a significant amount of time, money and pain.
Next, a project plan should be developed that identifies tasks, individuals, and timelines. This is typically followed up with a data and standards review that includes matching the carrier data to the ACORD AL3 standards, identifying state-specific requirements and missing data elements. Another critical element is developing a translation plan that includes certifying the lines of business with all the necessary agency management systems to ensure agent utilization.
Performing a pilot test quickly identifies potential issues and helps to validate the process. When selecting agencies for the pilot, a carrier should select an experienced agency that has sufficient transaction volume, is eager to participate, and willing to provide feedback. Internal education and staff development should be coordinated at this stage as it enhances the customer support experience and dramatically aids in overall agent adoption.
If a carrier incorporates these guidelines and provides the proper training and educational resources, the chances are much greater for high agent usage. For example, Motorists Mutual is having success following the recent rollout of its commercial lines download project.
Early on the carrier recognized that its agents made a significant investment in their agency management systems, and so Motorists is doing everything it can to support that investment and make it easier for the agent to do business. Since the successful kick off of the pilot, solid agent adoption across five states quickly followed, all of which can be attributed to ongoing agent communication, strong agent feedback, and the team at Motorists continually providing information on the benefits of integrating automation into the agency workflow.
Real-time technology is also a key driver of increasing agency-company communications and can save significant time and money once implemented. The Get Real Time Website states that, real-time is “the ability to click on a button from a client file in an agency management system or comparative rater for immediate access to carrier information on that client. The transaction may be a quote, billing inquiry, claim inquiry/loss runs, policy view, endorsements or a request for information. This approach provides a single workflow for servicing or quoting.”
Recently, Allied Insurance conducted a real-time survey with agents and found that of those agents using real-time technology, 52 percent are saving four hours or less a week, and over 47 percent are saving five to 11 hours or more each week. Agents are realizing the benefits of real-time through reduced data re-entry and number of passwords, and understand this technology places the data at their fingertips. But, more work needs to be done. According to the Allied survey, the top two reasons agents gave for not using real-time were because they were “unsure of the benefits” or “needed more information.”
Agents aren’t the only ones who can benefit from implementing efficient interface solutions into their systems. With fewer opportunities for “human error,” a carrier’s policy data will be more accurate, which then reduces the number of endorsements needed to correct policy data. By making it possible for agents to submit data to carriers electronically, there are also fewer paper applications and change requests that need to be handled.
In fact, the successful integration of automation provides the foundation for going paperless and the ability to access DEC pages and other key policy forms electronically in real-time. And, when agents have access to key policy data right from their agency management system, they are also more likely to handle insurance questions, thereby fewer calls are made by the agent to the carrier for assistance.
Chubb is a great example of using an innovative strategy to enhance agent-carrier communication and increase agent utilization after deciding to expand the use of its agency-company interface technology. The carrier had wanted to reach out to more auto and homeowner policies that were up for renewal, so it needed to increase its competitiveness by making it easier for insurance agents to include them in the quoting process.
The first challenge for the carrier was to identify agents who were already performing an upload bridge, because they would be the ideal candidates for leveraging real-time. Following a successful pilot, Chubb launched a series of communication activities that were aimed at promoting this capability in personal lines to agents. These tactics included Webcasts, training materials, and working with agency user groups and industry organizations to promote the use of real-time technology.
Perhaps the most effective form of communication was the creation of a pro-active help desk during the early stages of the rollout that automatically made outbound calls to agents in need of assistance. For example, when an agent used his or her agency management system to perform a real-time personal lines quote, but was unable to complete the transaction, Chubb’s help desk system was notified immediately.
The system captured the date and time of the incident, the agent and location, and description of issue. Chubb’s help desk automatically received these reports daily and was able to contact the agent the next day and troubleshoot the issue. This system also reported on which agents had been successful and the number of real-time transactions that were occurring each day. In addition to this report being helpful to agents, it was a fast way for Chubb to determine if further enhancements to the system were needed.
Even with its time-saving and economic benefits, some carriers are still on the fence about implementing real-time. This could be due to competing IT priorities or not having the expertise to efficiently address all the intricacies and integration points required for processing data between their system and their agencies’ systems.
As a result, IVANS is seeing more carriers turn to consulting and software solutions that can help provide processing for real-time transaction data between the interface technology or comparative rater, and the carrier’s system. These applications typically transform the data securely from multiple systems using complex business rules defined by the carrier, and include such features as data mapping, relational and conditional data cleansing, and data validation.
Carriers looking to invest in this type of solution should make certain there are full auditing capabilities and that multi-level security methods are available to ensure compliance.
Additionally, the vendor should have the ability to offer consultative services, such as solution development, testing, deployment and support. Lastly, the application should be fully scalable, with the ability to easily expand data processing capabilities in the future.
Once a project is underway, it is important to measure agent adoption and utilization, and so more carriers are turning to data analytics to secure the business intelligence necessary to drive better results and maximize the automation investment.
This data can be used to increase adoption of existing real-time or download capability, benchmark a carrier’s success rate versus competitors, or assist in optimizing a product rollout. Carriers can also identify agents for new download or real time transactions, and run reports for a specific line of business, transaction or agency management system vendor/platform.
These type of analytical reports also have the ability to provide more in-depth industry and carrier trending data, such as carrier rankings versus the industry on real-time utilization and agent trends in the industry for real-time and download.
Faced with increasing volumes of data, insurance carriers are challenged with developing and executing a strategy that provides deeper insight into the evolving marketplace and delivers a more effective means of achieving profitable growth.
By delivering insight into the traction a carrier is achieving with its agents and in the industry, these reports help a carrier quickly assess and redirect its actions in a more precise, consistent manner, and attain greater market share through improved carrier-agent communication.
No Longer “Nice to Have”
In an era where carriers are in the hunt to grab market share, automation is no longer a “nice to have” but an essential technology that can be a key differentiator during tough, economic times. Agents fear commoditization with rapid response becoming the de facto standard, and customer loyalty can change with a click of a button. Interface automation improves workflow efficiencies and enables agents to respond faster to customers.
As carriers continue to focus on new technology investments and build more robust IT platforms, it will be the savvier carrier that sees those projects as a golden opportunity to transform their business more quickly and integrate such proven and cost-effective technologies as real-time and download.