Editor's note: William Heitman is managingdirector, The LabConsulting.

Almost anyone who's spent time in an independentagency will agree that operations can be plagued byinefficient, unproductive work activities. Meaningful changes thatenhance efficiency and increase productivity have proven difficultto make.

It doesn't have to be this way. In fact, insurance firms andtheir agencies only need to look at their knowledge workers, thosewho “toil with their minds” in sales, quotes, claims processing andpremium collection, to find vast, untapped sources of economicvalue hiding in plain sight.

When managers of P&C branch offices have been surveyed, mostsaid that they perceive 30% to 40% of their revenue producers' timeis spent on “prospecting and selling activity.” This figure isbroadly consistent for both captive and independent branches. Whilethis general perception is true in a literal sense, closer scrutinyand observation of knowledge workers' underlying activities withinthis broad category reveals an environment rich with untappedopportunity for improvement.

When prospecting and selling workflows and business processesare mapped at detailed levels–10- to 15-minute tasks–only 20% ofproducer time is devoted to “true” prospecting, selling, andcross-selling tasks. The other 80% is spent developing, preparingand submitting quotes and “re-quotes,” and includes time spentre-keying and consolidating application submission data, ensuringversion control and basic policy preparation–in other words,administration. After viewing these maps and findings, one istempted to question the basic job position titles and descriptions:Are these revenue producers who administrate, or administratorsthat produce revenue?

The first impulse of everyone involved is to conclude that thisis simply “the unavoidable cost of doing business,” or that “bettertechnology is needed.” However, if you stop and think of the agencyas a “factory” instead of an office, a wide range of simple,non-technological improvements will appear.

For example, most prospective customers want quick, approximatequotes. They are satisfied to receive “preliminary” figures.Instead, many receive arduously calculated, exact quotes–after amaddening delay that can drive the frustrated prospect to searchfor swifter competitors. Sure, the underwriters will minimize theinsurer's risk with an “exact” quote–but they will do so at thecost of higher administrative costs and the risk of losing aprospective sale.

Additionally, in the drive to collect all the information thatunderwriters need to produce an “exact” quote, the probability thatthe applications submitted from prospects will include errors andmissing data is very high. Multiple call backs to the prospect maybe required, degrading the “customer experience” even before theprospect is officially a customer. These application remediationefforts can increase a quote's cycle time by several days. In theirattempts to generate a sale, producers will intervene, attemptingto master and manage this process as best they can. Along the way,producers begin to be converted into administrators. Nobody willnotice, except perhaps the customer.

And that's the best-case scenario! It can get much worse. Sincethis process can easily yield a “no sale” rate of 70% to 80% forall applications submitted, producers will be desperate to generateas many applications as possible and toss these over the wall tounderwriting. Producers will have neither the time nor the interestto spend “quality time” with prospects to understand their nuancedneeds. They will be lucky if they have the time and presence ofmind to conduct follow-up calls to close deals. It should come asno surprise that corporate directives from sales management andmarketing will go unread. “Strategy” is out the window becausethere's no time for discretion, caution or selection. “Churn”takes over and the poorest sales prospects are treated identicallyto the most valuable.

What to do? There is no easy fix. It is however,straightforward. It is also a time-consuming and meticulousundertaking. But then so is the planning for any factory–and everyinsurance agency, along with its home office, is a factory. Lookingyour agency as a factory is the first step toward improvingeffectiveness and value.

Map the process flows just as you would an assembly line. Thenconduct observations: of root causes, error rates, throughput andbottlenecks. Use the time-tested tools from the IndustrialRevolution: standardization and division of labor. After hundredsof activity-level, non-technology improvements, you will haveadministrators who administrate and producers who produce.