Selective Insurance Group is the 60th largest property/casualtyinsurer in the United States with net written premiums of $1.1billion. Located in Branchville, N.J., Selective focuses its saleschannel entirely on independent agents. To help make life simplerfor agents selling Selectives commercial lines products, theinsurer established a service center where the company handles allservice and policy administration tasks for agents who enroll inthe program. At the end of 2002, Selective announced the servicecenter had reached two milestones less than two years after openingfor business: the signing of its 100th agency partnership and theservicing of more than $20 million in premiums. Tech Decisionsrecently spoke with Richard F. Connell, executive vice presidentand CIO of Selective Insurance Group, Inc., and Craig G. Borens,vice president and director of the service center, about usingtechnology to enhance both the carrier-agent relationship and thecompanys business in general.

Connell manages the companys technology strategy, automationsystem development and e-business technology, data processingoperations, and voice and data communications. Before joiningSelective in August 2000, he was chief technology officer forLiberty Mutual Insurance Group. He also was president of LibertyMutuals software development subsidiary in Belfast, NorthernIreland. He previously worked for 23 years with Aetna Life andCasualty, where he held various information technology managementpositions both domestic and international.

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

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

Connell: This was a response to our agent force. They wereasking us to create a service center where they could put theirsmall commercial business. It would take the ongoing burden ofpolicy administration, updates, and policy servicing so they couldfocus more on sales. The initiative was started in 2000 as part ofa strategic planning session where Selectives leadership teamidentified six to eight key strategic initiatives it wanted toimplement over the next couple of years. The service center wasbrought into production in about a year. It was completed inJanuary 2001, and it has grown to about $25 million in premiums.Our main national competitors, Hartford and Travelers, both haveservice centers, and I think that factored into the equation interms of us wanting to be strategically positioned in the samecategories as those companies and provide the same level ofservice.

Borens: A number of agencies came to us and indicated they hadused the Hartford and Travelers [service centers]. Because smallcommercial lines, in some respects, is a commodity-based product,the pricing or compensation piece is fairly thin, so they needed tofind carriers that can offload the servicing to make this moreprofitable within the agencies. Our agency force came to us andsaid we need to do something with this book of business. Theywanted to give us more written premium, but they really needed tohave the service in place.

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

Borens: We really have two different operations in the servicecenter. The underwriting side is open from 7:30 in the morning to6:00 at night, five days a week, and we have approximately 25employees. The claims side is 24/7/365, and it has 28 people.

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

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

Connell: Our strategy as a company is to be what we call high touchenabled by high tech. The high touch means we want to focus onservice levels and relationships and provide more of a human faceto the business as opposed to something coming in over theInternet. If you go into Craigs operation, the service center repsare all licensed agents. They are insurance experts, and they arethere to respond to requests from insureds. They have theopportunity to up-sell and cross-sell for those existing policiesfor the resident agent and provide a high-level of service asopposed to something that is just run over the Internet. Thegeneral belief is the relationship nature of insurance is the wayto go, so were pretty careful to make sure the service center is inthe same mode.

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

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

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

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

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

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

Borens: We do a lot of our processing through our CommercialLines Automated System (CLAS). Its a client/server application witha DB2 database attached to the back end that runs on the mainframe.We take data from there and populate the Applied system so when acustomer calls in we are able to verify who the caller is. We alsouse the system for contact history, so we have a little historywhen an insured calls in. We use it as well for certificates ofinsurance, a large number of transactions we have to complete thatare, of course, non-premium bearing, which is one of the bigreasons agencies like to have service centers. They can offloadthat job to us, and it works very well for them. We also use theApplied system for ACORD applications so when we go out andcross-sell or up-sell, if we need to generate an ACORD applicationwe can do it. We also use the system for letters. As we send outdocumentation, these letters are stored automatically under eachcustomer file so we have a means to track correspondence. We use aFax Advantage Server from Applied, which we share with the claimsside.

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

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

Tech Decisions: Is there any other technology that you areusing?

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

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

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