Selective Insurance Group is the 60th largest property/casualty insurer in the United States with net written premiums of $1.1 billion. Located in Branchville, N.J., Selective focuses its sales channel entirely on independent agents. To help make life simpler for agents selling Selectives commercial lines products, the insurer established a service center where the company handles all service and policy administration tasks for agents who enroll in the program. At the end of 2002, Selective announced the service center had reached two milestones less than two years after opening for business: the signing of its 100th agency partnership and the servicing of more than $20 million in premiums. Tech Decisions recently spoke with Richard F. Connell, executive vice president and CIO of Selective Insurance Group, Inc., and Craig G. Borens, vice president and director of the service center, about using technology to enhance both the carrier-agent relationship and the companys business in general.

Connell manages the companys technology strategy, automation system development and e-business technology, data processing operations, and voice and data communications. Before joining Selective in August 2000, he was chief technology officer for Liberty Mutual Insurance Group. He also was president of Liberty Mutuals software development subsidiary in Belfast, Northern Ireland. He previously worked for 23 years with Aetna Life and Casualty, where he held various information technology management positions both domestic and international.

Craig G. Borens, vice president and service center director for Selective Insurance, has been with Selective since February 2001. Prior to joining Selective, Borens spent 13 years with the Ohio Casualty Group in various capacities, including underwriting/operations manager, where he was responsible for launching and overseeing two call center operations.

Tech Decisions: What led to the decision to establish the Selective Service Center to take over many of the office duties of the independent agents who sell Selective commercial products and enlisted this service?

Connell: This was a response to our agent force. They were asking us to create a service center where they could put their small commercial business. It would take the ongoing burden of policy administration, updates, and policy servicing so they could focus more on sales. The initiative was started in 2000 as part of a strategic planning session where Selectives leadership team identified six to eight key strategic initiatives it wanted to implement over the next couple of years. The service center was brought into production in about a year. It was completed in January 2001, and it has grown to about $25 million in premiums. Our main national competitors, Hartford and Travelers, both have service centers, and I think that factored into the equation in terms of us wanting to be strategically positioned in the same categories as those companies and provide the same level of service.

Borens: A number of agencies came to us and indicated they had used the Hartford and Travelers [service centers]. Because small commercial lines, in some respects, is a commodity-based product, the pricing or compensation piece is fairly thin, so they needed to find carriers that can offload the servicing to make this more profitable within the agencies. Our agency force came to us and said we need to do something with this book of business. They wanted to give us more written premium, but they really needed to have the service in place.

Tech Decisions: How big is the service center, and how many people staff it?

Borens: We really have two different operations in the service center. The underwriting side is open from 7:30 in the morning to 6:00 at night, five days a week, and we have approximately 25 employees. The claims side is 24/7/365, and it has 28 people.

Tech Decisions: How are the service requests handled? By phone or online?

Borens: Its strictly an inbound call center. Except for e-mail, we dont really use the Internet in the call center. Our agencies are able to go in and do some policy information and billing online. Customers and agents can also file a claim online, but due to the complicated nature of insurance, most customers and agents want to talk to someone.

Connell: Our strategy as a company is to be what we call high touch enabled by high tech. The high touch means we want to focus on service levels and relationships and provide more of a human face to the business as opposed to something coming in over the Internet. If you go into Craigs operation, the service center reps are all licensed agents. They are insurance experts, and they are there to respond to requests from insureds. They have the opportunity to up-sell and cross-sell for those existing policies for the resident agent and provide a high-level of service as opposed to something that is just run over the Internet. The general belief is the relationship nature of insurance is the way to go, so were pretty careful to make sure the service center is in the same mode.

Borens: We see insurance as a fairly technical line of businesssomething our general policyholders need some advice in. People want to be able to talk to somebody, whether it is the agency or us here in the service center. I think we help them in that process.

Tech Decisions: Dont your agencies get a little nervous knowing that when their customers call the service center, they are speaking to a licensed agent, and those agents can sell their customers some more insurance?

Borens: All renewals, up-sells, and cross-sells remain with the agencies we deal with.

Connell: Theres very little downside to the agency on the underwriting side of the house.

Tech Decisions: What kind of technology are you using in the service center, and what makes it hum?

Connell: Since this runs like an agency, the main technology we are using is an agency management system. We use the Applied system. In the background, we use our own policy administration system, which has several levels of integration with the Applied system. When you walk into that shop, its just like walking into an agency.

Borens: We do a lot of our processing through our Commercial Lines Automated System (CLAS). Its a client/server application with a DB2 database attached to the back end that runs on the mainframe. We take data from there and populate the Applied system so when a customer calls in we are able to verify who the caller is. We also use the system for contact history, so we have a little history when an insured calls in. We use it as well for certificates of insurance, a large number of transactions we have to complete that are, of course, non-premium bearing, which is one of the big reasons agencies like to have service centers. They can offload that job to us, and it works very well for them. We also use the Applied system for ACORD applications so when we go out and cross-sell or up-sell, if we need to generate an ACORD application we can do it. We also use the system for letters. As we send out documentation, these letters are stored automatically under each customer file so we have a means to track correspondence. We use a Fax Advantage Server from Applied, which we share with the claims side.

Tech Decisions: You do offer an extranet for your agents. What is involved with that?

Connell: Thats eSelect, our agency portal. We provide the agencies the ability to make claims and billing inquiries for accounts that are active at their particular agency. We provide agency profitability reports that are specifically tied to their agencies. We also offer forms, underwriting guidelines, ways to sort out those underwriting guidelines, and other information.

Tech Decisions: Is there any other technology that you are using?

Borens: We utilize Witness Systems for our quality assurance program. It allows us to record [telephone] conversations randomly and, through screen scrapes, capture the data-entry piece. As our team leaders are doing their quality assessment, we can not only hear the conversation, but also see the system they are accessing. That is valuable for us for a few reasons. First, we can provide training back to our account execs and give them training and support on the best quality-assurance practices out there. Another reason is we look at best practices. We are able to see how certain account execs handle certain transactions. We are able to go back and look at the best way to handle certain types of transactions and look for systems improvements when necessary. Third, we use it to track the progress of new employees. As theyre hired, were able to see if there are any holes or gaps in our training program that we need to fill.

Tech Decisions: Has there been any thought of expanding the service center to include your personal lines?

Connell: At this point in time, its commercial lines only. Thats not to say we wouldnt do personal lines somewhere down the road, we just have not made that decision yet. About 80 percent of our business is commercial lines anyway. The claims center handles all lines of business.

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