Insurance buyers have enjoyed a soft property-casualty marketsince 2007, and while there are some signs of the market hardening,most experts project that current conditions will likely continuefor another two years.

The importance of expense control and organizational efficiencyhas become more critical than ever. In addition, rapidly changingtechnology can create challenges, particularly for the independentagent distribution channel. Many insurance carriers arere-evaluating their IT infrastructures and going beyond traditionalways of cost cutting to focus on transforming their business tocreate market differentiation.

Carriers have identified several key technology priorities,according to a recent IVANS survey. Forty three percent ofproperty-casualty carriers surveyed are investing in new orupgraded policy administration systems to improve internalcapabilities and operations. More carriers are also looking toinvest in consumer portals to provide self-service functionalityand online research options to end customers. The IVANS surveyfound that 47 percent of carriers already have a consumer portal orare currently implementing one, and 18 percent have plans to putone in place over the next 12 months.

While upgrading existing or implementing new technologies isimportant, the real challenge is creating a clear strategy thataligns technology with the business strategy, and optimizes thebenefits with a carrier's partners. This is not always easy. Legacysystems 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 istypically complex and expensive, sometimes rife with internalpolitics and almost always time-consuming.

There are readily-available and affordable technologies, such asdownload and real-time, which can be implemented quickly and canhelp to maximize a carrier's larger investments all the way througha carrier's agent channels. For example, in the past, some olderpolicy administration systems did not have the flexibility orfunctionality to support interface technology.

This is no longer the case, and carriers investing in newsystems and upgrades should leverage this opportunity to reach outto their agents to automate agency-company interface workflows.Alternatively, if download and real-time have already beenintegrated, the carrier should ensure the evolution of thesetechnologies continues in the new system and, in fact, considerexpanding automation into other lines of business. Doing so notonly increases the chances of a carrier being selected by agents towrite new business but agency-company interface technology canfacilitate the growth of other IT investments, such as consumerportals.

To help carrier realize the full potential of their ITinvestments and successfully transform business, the followingoutlines some proven best practices that are relatively inexpensiveand easy to follow.

Getting Everyone on Board Internally

A carrier should not think of improvements to the infrastructureas solely an IT project. Rather, the objectives and goals should betranslated into business terms that will reinforce and support theinsurance company's overall strategy. This can be done in part byassembling a group of key stakeholders that can help flesh out thevalue proposition and supervise the project once it isunderway.

Knowing the requirements and assessing the functionality willhelp gain insight into what the end-users actually do and where thegaps are, so a business case with carefully collected data can bepresented to senior management. For example, carriers should visitwith as many agencies as possible to find out what they like anddon't like about automation technology, and discuss deficienciesand how they can be addressed.

Questions concerning the agency-company workflow and learningabout current obstacles and redundancies agencies manage daily willalso help the carrier better understand what is driving the needfor improvements. Carriers should also leverage industryorganizations (e.g., ACORD) that have extensive knowledge on whatit takes to successfully implement automation. And, putting abudget and a cost-benefit analysis together, combined with astrategic internal/external communications plan, will facilitateuniversal buy-in—from C-level executives to front line employeesand agencies.

Getting Agents to UseTechnology

When implementing technology internally, a strategy thatincorporates training, education, online resources, or all of theabove, is essential to the project's success. After all, if no oneuses the technology, a lot of time and money has been wasted.

The same is true when implementing automation technology forindependent agents or brokers. For example, while the use ofreal-time and download continues to increase, 60 percent of agentssurveyed by IVANS in May 2011 said the number-one reason they arenot using real-time or commercial lines download technology isbecause many carriers are still not offering it.

Agents are looking for ways to reduce redundancies andstreamline their workflows, so they can increase theirresponsiveness and focus more on up-selling and cross-sellingopportunities. However, carriers want to ensure agents will adoptthis technology and are looking for a solid return on theirinvestment. As a carrier, how do you make certain that once youbuild it, they will come?

The definition of download is taking data from the carrier andproviding this data to the agency in an effort to keep the agencycurrent with policy revisions made by the carrier throughtransactional processing. The trick is in providing the data insuch a way as to preserve data the agency has that the carrier isunable to provide.

When implementing this technology, there are guidelines carrierscan follow to assure the project runs smoothly and that agentsadopt the technology. First, a carrier should evaluate its lines ofbusiness to determine which are available, how many policies thereare for each line and then survey the agencies to determine whichline(s) would be best suited for automation.

Having this information along with selecting an experiencedimplementation team that is ACE certified, and has a deep knowledgeof agency management systems, and commercial/personal policies willsave a carrier a significant amount of time, money andpain.

Next, a project plan should be developed that identifies tasks,individuals, and timelines. This is typically followed up with adata and standards review that includes matching the carrier datato the ACORD AL3 standards, identifying state-specific requirementsand missing data elements. Another critical element is developing atranslation plan that includes certifying the lines of businesswith all the necessary agency management systems to ensure agentutilization.

Performing a pilot test quickly identifies potential issues andhelps to validate the process.  When selecting agenciesfor the pilot, a carrier should select an experienced agency thathas sufficient transaction volume, is eager to participate, andwilling to provide feedback.  Internal education and staffdevelopment should be coordinated at this stage as it enhances thecustomer support experience and dramatically aids in overall agentadoption.

If a carrier incorporates these guidelines and provides theproper training and educational resources, the chances are muchgreater for high agent usage. For example, Motorists Mutual ishaving success following the recent rollout of its commercial linesdownload project.

Early on the carrier recognized that its agents made asignificant investment in their agency management systems, and soMotorists is doing everything it can to support that investment andmake it easier for the agent to do business. Since the successfulkick off of the pilot, solid agent adoption across five statesquickly followed, all of which can be attributed to ongoing agentcommunication, strong agent feedback, and the team at Motoristscontinually providing information on the benefits of integratingautomation into the agency workflow.

Real-time technology is also a key driver of increasingagency-company communications and can save significant time andmoney once implemented. The Get Real Time Website states that,real-time is "the ability to click on a button from a client filein an agency management system or comparative rater for immediateaccess to carrier information on that client. The transaction maybe a quote, billing inquiry, claim inquiry/loss runs, policy view,endorsements or a request for information. This approach provides asingle workflow for servicing or quoting."

Recently, Allied Insurance conducted a real-time survey withagents and found that of those agents using real-time technology,52 percent are saving four hours or less a week, and over 47percent are saving five to 11 hours or more each week. Agents arerealizing the benefits of real-time through reduced data re-entryand number of passwords, and understand this technology places thedata at their fingertips. But, more work needs to be done.According to the Allied survey, the top two reasons agents gave fornot using real-time were because they were "unsure of thebenefits"  or "needed more information."

Not Just Agents

Agents aren't the only ones who can benefit from implementingefficient interface solutions into their systems. With feweropportunities for "human error," a carrier's policy data will bemore accurate, which then reduces the number of endorsements neededto correct policy data. By making it possible for agents to submitdata to carriers electronically, there are also fewer paperapplications and change requests that need to be handled.

In fact, the successful integration of automation provides thefoundation for going paperless and the ability to access DEC pagesand other key policy forms electronically in real-time. And, whenagents have access to key policy data right from their agencymanagement system, they are also more likely to handle insurancequestions, thereby fewer calls are made by the agent to the carrierfor assistance.

Chubb is a great example of using an innovative strategy toenhance agent-carrier communication and increase agent utilizationafter deciding to expand the use of its agency-company interfacetechnology. The carrier had wanted to reach out to more auto andhomeowner policies that were up for renewal, so it needed toincrease its competitiveness by making it easier for insuranceagents to include them in the quoting process. 

The first challenge for the carrier was to identify agents whowere already performing an upload bridge, because they would be theideal candidates for leveraging real-time. Following a successfulpilot, Chubb launched a series of communication activities thatwere aimed at promoting this capability in personal lines toagents. These tactics included Webcasts, training materials, andworking with agency user groups and industry organizations topromote the use of real-time technology.

Perhaps the most effective form of communication was thecreation of a pro-active help desk during the early stages of therollout that automatically made outbound calls to agents in need ofassistance. For example, when an agent used his or her agencymanagement system to perform a real-time personal lines quote, butwas unable to complete the transaction, Chubb's help desk systemwas notified immediately.

The system captured the date and time of the incident, the agentand location, and description of issue. Chubb's help deskautomatically received these reports daily and was able to contactthe agent the next day and troubleshoot the issue. This system alsoreported on which agents had been successful and the number ofreal-time transactions that were occurring each day. In addition tothis report being helpful to agents, it was a fast way for Chubb todetermine if further enhancements to the system wereneeded. 

Having the Right Tools 

Even with its time-saving and economic benefits, some carriersare still on the fence about implementing real-time. This could bedue to competing IT priorities or not having the expertise toefficiently address all the intricacies and integration pointsrequired for processing data between their system and theiragencies' systems.

As a result, IVANS is seeing more carriers turn to consultingand software solutions that can help provide processing forreal-time transaction data between the interface technology orcomparative rater, and the carrier's system. These applicationstypically transform the data securely from multiple systems usingcomplex business rules defined by the carrier, and include suchfeatures as data mapping, relational and conditional datacleansing, and data validation.

Carriers looking to invest in this type of solution should makecertain there are full auditing capabilities and that multi-levelsecurity methods are available to ensure compliance.

Additionally, the vendor should have the ability to offerconsultative services, such as solution development, testing,deployment and support. Lastly, the application should be fullyscalable, with the ability to easily expand data processingcapabilities in the future.

Once a project is underway, it is important to measure agentadoption and utilization, and so more carriers are turning to dataanalytics to secure the business intelligence necessary to drivebetter results and maximize the automation investment.

This data can be used to increase adoption of existing real-timeor download capability, benchmark a carrier's success rate versuscompetitors, or assist in optimizing a product rollout. Carrierscan also identify agents for new download or real timetransactions, 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 toprovide more in-depth industry and carrier trending data, such ascarrier rankings versus the industry on real-time utilization andagent trends in the industry for real-time and download.

Faced with increasing volumes of data, insurance carriers arechallenged with developing and executing a strategy that providesdeeper insight into the evolving marketplace and delivers a moreeffective means of achieving profitable growth.

By delivering insight into the traction a carrier is achievingwith its agents and in the industry, these reports help a carrierquickly assess and redirect its actions in a more precise,consistent manner, and attain greater market share through improvedcarrier-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 essentialtechnology that can be a key differentiator during tough, economictimes. Agents fear commoditization with rapid response becoming thede facto standard, and customer loyalty can change with a click ofa button. Interface automation improves workflow efficiencies andenables agents to respond faster to customers.

As carriers continue to focus on new technology investments andbuild more robust IT platforms, it will be the savvier carrier thatsees those projects as a golden opportunity to transform theirbusiness more quickly and integrate such proven and cost-effectivetechnologies as real-time and download.