The industry has been working on insurer/agent electronic linkage since the mid-1980s, trying to manage the complexity of numerous systems in the agents’ offices that need to talk to many different insurance systems. In order to examine the state of connectivity and explore how insurers and agents are directing their efforts to improve communication, SMA recently completed a major study investigating insurer and agent linkage.
Overall, impressive progress has been made. But, there’s certainly further work that can be done to create more productive, collaborative interactions. Agents and brokers want an easier, more efficient way to do business. At the same time, insurers are recognizing that functionally rich linkage can be a major market differentiator. The insurers that are leading the pack are finding that electronically enabled interactions are contributing to profitability, driving growth, improving policyholder relationships, and keeping business soundly on the books.
Over the past few years there have been major investments and major accomplishments in real time upload capabilities and in the use of comparative raters, as well as in data capture through agency portal capabilities. While the progress is commendable, it has become apparent that insurers need to support all types of submissions and all ways to pass information – whether by phone, fax, portal data capture, email/pdf, real-time upload, comparative raters, core system web front ends, or whatever might come down the road.
Happenings with Real-time Upload and Download
Real-time upload and download are foundational and fundamental means of data exchange, capabilities that most insurers should have. With real-time upload, producers can submit applications from the agency management systems to multiple insurers with just a single entry or click. Download supplies information and insights for agents and brokers about policies, billing, and claims. Together, real-time upload and download provide the full round-trip of information sharing.
Upload/download capabilities in the insurance industry are maturing, at least for some lines of business. The SMA survey found that for personal lines, the vast majority of insurers, agents, and brokers can support real-time upload and download for at least one line. Insurers report that their current ability to support real-time upload varies for lines other than personal – nearly half provide support for small commercial and for middle market commercial, and less than a quarter for specialty lines. It is interesting to note that 76 percent of agents and brokers say they are able to support real-time upload for small commercial lines.
Overall, insurers understand how important support for real-time upload and download is for the success of the business.
Portals have been a focus area for insurer investment for at least the past 10 years. The first portals were aimed mainly at data capture for submission. However, the SMA research shows that a significant evolution of portal sophistication has occurred in recent years. Portals are serving as the data hub for insurers, receiving data from any medium. They function as a place where the distribution channel can go for information about the insurer, risks, and processing status.
Three quarters of insurers report that agent/broker portals that capture and process transaction data are already in place. An additional 20 percent of insurers say they are evaluating or piloting portals. Most of the current investment is targeted for additional capabilities to provide business intelligence/dashboards, collaboration and/or workflow, and activities/alerts and notes. Interestingly, over one-fourth of agents/brokers report they plan to evaluate or pilot policyholder (self-service) portals. Over the next three years, insurers report they plan to add communication functions, licensing, and social media capabilities. Agents place social media, FNOL, and communication functions at the top of their list.
The advantages that portals provide are clear, but for optimal value, insurer/agent connectivity must go beyond basic information exchange. Portals must do more than handle data capture and quotes. Portals should facilitate collaboration and even automate some aspects of the negotiations. The real value occurs when a full set of capabilities make it possible to complete the transaction with increased efficiency and better insight.
The Next Level: Collaboration and Visibility
Both insurers and agents want to see how the book is performing. Immediate and informed service is expected, if not demanded by all parties involved in insurance transactions. Sophisticated awareness and understanding is fueling better decisions. Hence, the collaboration and visibility part of insurer/agent linkage is attracting more attention.
Business insight and intelligence, seamless and smooth workflows, and visibility are moving up in focus and priority; they are the key levers for success. The industry is rapidly progressing toward the next level of maturity.
It is moving beyond the basic real-time upload, simple inquiry, and quote data capture, and on to enhanced levels of support that drive business advantage and value. Using a variety of interwoven interaction methods and information sharing techniques and tools, connectivity is advancing well beyond just exchanging data to sharing and collaborating to improve customer satisfaction and business performance.
About the Author
Deb Smallwood, the founder of SMA, is recognized for her expertise in investing in technology to influence competitive advantage in the insurance industry. She offers a fresh perspective on how business capabilities can be enabled to meet strategic goals. Exclusively serving the insurance industry, Strategy Meets Action blends unbiased research findings with expertise and experience to deliver business and technology insights, research, and advice to insurers and IT solution providers. Smallwood can be reached at firstname.lastname@example.org or 603.770.9090.