No One Controls The Tech Universe

|

I received an e-mail last week from someone I have known foreverin this business. He was letting me know about the progress beingmade on technology in our industry, but reflected on howpainstaking the process has been for the independent agency system.Automating office functions is not the same as effectivelynetworking an industry so fragmented and competitive.

|

Although we have the industry (ACORD) standards used for sendingand receiving data between computer systems, its not only about thestandards and the technology. Business strategy and economicsinfluence what agencies and insurers can do together, and that getscomplicated by a mixture of often conflicting tech solutions thatneed to be implemented in the same space.

|

Even beyond the single entry of data, one is confronted with aplethora of related concerns like networks, security, userinterfaces, workflow and process.

|

So what do agencies need? That depends on the agency.

|

So what does a specific agency need? That depends on whom youask in the agency. And that depends on the product and insurer mixand so on.

|

The fact is that agencies and insurers do not control theirtechnology universe. This means that no matter how forwardthinking, what they do will be influenced in large part by whatthey cannot control. What they do is driven as much by theircompetitors decisions as their own.

|

Decisions made by one insurer will impact the success ofdecisions made by another. Implementing a technology solution in anagency is influenced by what another insurer is doing in that sameagency. And good solutions often get ignored as a result of the mixof insurers in the agency, not because it was a bad solution initself. One insurers high-tech success may be another insurersbane.

|

Of course, decisions made by one agency will also impactdecisions made by another agency, and agency tech decisionsinfluence what insurers actually do in the marketplace (somethink).

|

But some agencies embrace proprietary insurer technology for avariety of business reasons. That encourages the insurer to rollout the same technology to other agencies, who represent adifferent mix of insurers and where that solution results inhavoc.

|

It reminds me of the time that an agent expressed concern to meabout proprietary systems in our business, yet turned to theinsurer CEO standing next to me and praised his recently released,albeit proprietary Internet solution. Go figure!

|

Meanwhile, some agencies feel locked in by their vendorsdecisions, and the vendors say they are affected by decisions oftheir customers. And so it goes.

|

It seems that people try to explain the world in terms of simplecause and effect relationships. You do that and I will do this. Butits more complicated.

|

I was watching the Discovery Channel the other day about climateand weather. They demonstrated how the melting of polar icedecreased the salinity of ocean water, creating tubes of heavywater that changed the ocean conveyor belt (flow of currents),shifting evaporation rates that influenced temperature, thatchanged global weather patterns, that in turn affect the icecaps.

|

That's a complex series of relationships, but not much differentthan the tangle of interdependencies we face as an industry lookingfor a way to reinvent itself.

|

There is no single solution. But all the solutions being createdmust allow us to work within such an inter-dependent world.

|

We have a mixed bag of technology solutions today for manyreasons–some we know about and others are more like the invisibleocean flows. But no matter how complex and inter-woven thetechnology landscape might become, what developers build and whatbusinesses do will always depend on a combination of interdependentfactors.

|

Having said that, there are a few guiding principles that we canall embrace on this journey:

|

First and foremost, we need to support and implement theindustry data standards provided by ACORD. If we receive anycriticism from our members, its that were not moving fast enough,not that were not moving in the right direction.

|

Second, we need to encourage insurers and vendors to integratethe standards in their software because they become the buildingblocks (and provide the flexibility) for the mass customizationthat we need.

|

(I hesitate to use the word “glue” as a metaphor to describestandards, since standards actually provide the flexibility toconnect and disconnect–couple and uncouple–components and datastreams as your business requirements change.)

|

Lastly, we need to improve our understanding of what works andwhat does not work in our business. We have great examples of both.On that score, the agency user groups and their insurer partnershave completed a survey that might open constructive dialogue onhow insurers spend money on software development in the future.

|

Today, your end game might not be the same as everyone else'sand your roadmap is probably different as well. But have no doubtsthat your decisions and your ultimate success will depend on whatothers will do. At the same time, knowing what others do, workingin cooperation and collaboration does offset the vagaries of aturbulent marketplace.

|

I encourage you to gather useful information by getting involvedin industry initiatives like the Agents Council for Technology (setup by the Independent Insurance Agents of America in Alexandria,Va.), the national agency management system user groups' AUGIEproject (the ACORD-User Groups Information Exchange), and the ACORDStandards Program.

|

Gregory A. Maciag is president and chief executive officerof ACORD, the non-profit industry standards association based inPearl River, N.Y., with offices in Belgium and the UnitedKingdom.


Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, February 18, 2002.Copyright 2002 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.


Contact Webmaster

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.