Independent agents--most of whom are not computer experts--arespending thousands of dollars to upgrade their agency managementsystems each year, only to discover that the software they havepurchased is not making life any easier for the 21st centuryoffice.

"In our office we try to keep up on the cutting edge of technology.We recognize the value of the tool," observed Darlene Penfold,principal in Penfold-Leavitt Insurance Agency Inc., in Eureka,Calif. "It is a valuable tool and there is a tendency for [agents]to get caught up in technology as methodology. It is a tool."

The Penfold-Leavitt Agency uses two agency managementsystems--Applied and AMS--said Ms. Penfold, who also serves on theOakland, Calif.-based Insurance Brokers and Agents of the Westmedia relations team.

One problem with the software is the need for constantupgrades.

"They are good programs and the vendors try to make improvements.However, they could improve more quickly than they are doing andcreate programs that accomplish tasks in a more efficient manner,"Ms. Penfold remarked.

One example she gave was an accounting report done on AMS softwarethat requires the agency to go through a series of steps in orderto generate a report.

"This is dumb," Ms. Penfold said. "You should not have to gothrough this many steps to get a report."

Some tasks, Ms. Penfold said, were easier to accomplish in the DOSversion of the software. (DOS was the dominant computer operatingsystem prior to the introduction of Windows.)

While some might empathize with Ms. Penfold, the problems agenciesface in running their systems may come down to not knowing how towork them inside and out, observers say.

Having that knowledge is a matter of commitment in both time andmoney to learn the system, according to David Lohnes, a SaratogaSprings, N.Y.-based automation resource consultant for theProfessional Insurance Agents of Connecticut, New Hampshire, NewJersey, New York, Ohio and Indiana.

"The biggest thing about automation is that it is not an event. Youdont get automated," Mr. Lohnes said. "It is a process, acontinuous process that should be a line item on everyonesbudget."

There are a great wealth of possibilities in any of the agencymanagement systems available today, he said. While not endorsingany particular software system, he said the programs vary in theirability to perform tasks.

Applied is one system with a wealth of capabilities from a customerservice perspective, according to Mr. Lohnes, but he noted that ittakes a number of steps to accomplish these tasks, and thatinvolves a lot of education on the part of the agencypersonnel--especially to learn shortcuts.

Education, admitted Mr. Lohnes, is something many agencies are notprepared to commit to in terms of either time or money. After theinitial training period, he asserted, it is rare that agencypersonnel return for more training.

"It is a constant battle to keep that up," Mr. Lohnes observed."Training is never complete. It is the single biggest problem andgreatest need, and it is expensive. The big concern agencies haveis the cost of the system, but most never think that the [training]cost is a price that is paid for. The real cost is in training andmaking changes in procedures."

Mr. Lohnes recommended that, instead of thinking in terms ofgetting the system into the agency, turning on the machine andbeing off and running, agencies need to take a long-rangeapproach.

Instead of believing everything should be running efficiently in acouple of months, his approach would have an agency develop itstechnology application, in an ideal world, over a three-yearperiod.

The first year would be spent inputting data and learning to usethe system.

In the second year, Mr. Lohnes continued, the agency would learnhow to use the data.

"If the agency has a lot of time," the agency would organize thedata in the third year so it all looks the same, heconcluded.

Typically, however, agents expect everything up and runningnormally within two months, he said.

Another issue is duplication, observed Mr. Lohnes. Agencies keepboth computer and written records either out of fear of losing themin the system, or the inability to break old habits, he said.

"These are some of the issues the majority of agents do not thinkabout up front, but learn after the fact," according to said Mr.Lohnes, who said he has run into the situation "dozens and dozensof times" in his capacity with PIA.

If agencies do take the time, there is a payoff, observers say. Oneagency that has taken the time is the G.S. Newborn &Associates, Inc. in Flemington, N.J.

The agency spent five years working to integrate its technology inone location before moving into a second location, said GaryNewborn, president of the agency and of the Independent InsuranceAgents of New Jersey. He credited his staff with making thetechnology work for the agency.

"We looked at the number-one reason to utilize the technologysystem and we decided we wanted to go into it to improve relationswith our clients," said Mr. Newborn.

"From an operational standpoint, we look at new ways of doingbusiness. Today we do everything we used to do and tons more withthe same time and staff," he added.

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, August 6, 2001.Copyright 2001 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.


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