Paper files and manual records, no matter how much data theycontain, no longer offer insurance agencies a competitiveadvantage.

A digital agency uses modern technology to connect its agents,insurers, policyholders and prospects. The agency is paperless—withautomated business operations that support core capabilities—andseamlessly exchanges information and gains data insights throughmultiple channels. According to an Applied Systems e-book, thereare five pillars to the digital agency:

1. The AMS

The agency management system (AMS) is the center of an agency'sdigital operations. It manages customer relationships, policy andbenefits administration, sales automation, marketing initiatives,document management and financial accounting across multiple linesof businesses. These capabilities help identify cross-sellopportunities.

A digital AMS is built upon scalable architecture, so that theagency can add new customers and lines of business. It alsointegrates with third-party applications, proprietary systems andother data sources for a single view of the business. An AMS needsto provide end-to-end communications with carrier partners.

2. Data Analytics

Collecting data is not a problem for agents and brokers; thechallenge is that it's difficult to handle. A true data analyticssystem is able to offer a point-in-time snapshot of multiplebusiness metrics.

Data analytics allows an agency to transform data within the AMSfor visual insights that drive business performance, including inthe areas of patterns, market trends and customer preferences.

3. Insurer Connectivity

Communicating and exchanging data securely and withoutinterruptions from insurer systems to their agency partners isnecessary for accurate quotes, underwriting, billing and customerservice.

Whether through download or in real time, insurer connectivityis critical to accessing products and programs for agency clientsand for delivering an enhanced customer experience. Applied Systemsnotes that nearly 70% of agents surveyed in a recent IvansInsurance report say that the availability of download capabilitiesare very important when selecting insurers to do business with.

Automated insurer connectivity also reduces time spent onadministrative tasks, such as looking up quotes through multiplewebsites.

4. Mobile Offerings

Mobile tools are no longer an option—they're a requirement.Digital agencies can leverage mobility to provide consumers 24/7access to insurance information from any device. When an agent isworking remotely, mobile technology provides access to the AMS,allowing the producer to provide customer service and keepoperations running smoothly.

Mobility has consumer benefits as well. Clients want to accessquoting and purchasing tools and view insurance information ontheir mobile devices. According to Applied Systems, millennial andGeneration Z consumers say mobile access to information and onlineservices is important when choosing an insurance provider.

5. Cloud-Based Solutions

Digital agencies can move core software applications to offsitedata centers for improved performance, flexibility and security.With local, on-site servers, agencies risk cyber threats or naturaldisasters destroying company data and creating downtime.Additionally, manual software updates can eat up time, money and ITresources.

Cloud adoption is expected to grow rapidly throughout theindustry as companies move their software to the cloud. Otheradvantages include growth opportunities and scalability.