This year, agents are really starting to benefit from technology. But with powerful tools available to fill so many needs, brokers face a challenge to know where to deploy their limited technology capital to get the best return–marketing, internal effectiveness or stronger carrier relationships.

“I think there's been a realization that using technology to gain an advantage has moved from 'nice to do' to 'necessary to do' to be in your strongest competitive position,” said Jeffrey Yates, executive director of the Agents Council on Technology (ACT), part of the Independent Insurance Agents and Brokers of America (IIABA).

Here's a taste of some of the technologies that are making an impact on agencies this year.

Marketing 2.0

More agencies have begun making technology central to their sales and marketing efforts to bring in new business and to help establish reputation, loyalty and relationships that help retain these accounts.

“Social media has absolutely exploded this year,” said Karlyn Carnahan, principal at New York-based consulting firm Novarica. In early 2010, she found 40 to 60 agents were producing the 140-character messages on Twitter; 3 months later, it was closer to 600. Agents are using Twitter and Facebook to build a personal connection, and Linkedin for networking (see “The move to social media” below.”

Social networking also has allowed agencies to cut back on their print advertising and even eliminate Yellow Pages advertising. One agency, for example, has substituted these traditional methods with “my time, my energy, my information and knowledge” on social networking sites, said Linda Rey, broker at The Rey Insurance Agency, Sleepy Hollow, N.Y. In early May, she was working on about six inquiries through social media, had booked an auto policy for someone who found her on Twitter, and had written a retirement account from a Facebook acquaintance.

Service

“We're watching very closely the growing need for agents and brokers to be more customer-service oriented,” said Kim Harris-Ferrante, vice president at technology researcher Gartner Inc.'s North Carolina location. Carriers are exposing more information through self-service Internet sites and intermediaries are assuming the role of a complex customer service administrator for requests that don't require face-to-face interaction.

Applied Systems CEO James Kellner agrees, explaining service is becoming even a bigger driver in agency technology adoption as brokers strive to win and keep customers.

Because “our customers want self-service for their customers 24/7,” Applied Systems' Epic system includes features like distribution management to send information by phone, e-mail or link–and eventually Facebook and LinkedIn, when there is enough demand–according to the preferences specified in the receiver's profile.

Some independent agents had turned away from personal lines, especially auto, leaving direct writers to handle the relatively low-premium business; the right technology and business relationships, though, enable personal lines to be a profit center, not just a service line. Agent Mike Foy of Foy Insurance links his website to a rating service to compete directly with direct writers, “turning a $50 monthly investment into a $3,000 annual commission.”

This is a “great tech tool that allows us to offer the same competitive advantage as a Geico or a Progressive,” Foy said.

Foy's success with this has taken time. He tried to write business this way 7 years ago, but the resulting rate a customer would see “wasn't accurate enough, and I think being somewhat close is important,” he said. Comparative raters continued to evolve and he tried again, but this time the service was hidden on his website and prospects were unaware of it and didn't use it. He's now actively promoting this capability by prominently featuring it on his website and by driving potential clients there with various measures including advertising in the online business directories.

Collaboration

Real-time download offers huge benefits to agents and their carrier partners. A major industry effort by ACT, ACORD, ACORD-User Groups Information Exchange (AUGIE) and other industry groups continues to encourage agents to use it and carriers to build out consistent functionality to make it a more powerful tool, Yates said.

In the most recent AUGIE survey, completed by 4,000 agents, brokers and wholesalers in January, 69 percent of respondents were conducting real-time inquiries like looking up bills and making payments, Yates said. Policy-view usage grows about 20 each year. The survey also showed about 65 percent of respondents saw a significant increase in agency value from adoption of the latest technologies.

One recent addition to collaborative technology is the FirstBest agency portal.

California-based ICW Group, a midsize or “super regional carrier,” realized a 92 percent lift in workers' compensation submissions received from agents in 2009 compared with the previous year. This is due in part to its deploying the FirstBest UMS (underwriting management system), which ICW Group has branded “Snap.” For the same period, ICW Group's quote count was up 80 percent and policy count was up 41 percent.

“Snap's ability to process more business more efficiently has been a significant factor in achieving these results,” said ICW Group's director of marketing Gary Whitfield. Agents are particularly pleased with Snap's upload feature, which allows them to instantly populate more than 70 percent of their application submission by pulling data directly from their agency management system. “A single keystroke replaces what traditionally has been a very time-consuming process of rekeying required information from the ACORD application,” he said.

But even agents who have not upgraded to a recent management system can benefit from the accelerated turnaround the portal offers. Joan McLaughlin, commercial lines and marketing manager at Industrial Risk and Insurance Services in Santa Ana, Calif., uses Snap to place about 99 percent of the business she does with ICW Group because the technology allows her to instantaneously prequalify a piece of business and to complete a new business submission–including scanned attachments–in about 10 minutes. Also, competition makes it important for an agency to be credited as the first to bring a particular account to a carrier, and the system allows her to reserve an account 92 days before the expiration date, “giving me the control I need,” McLaughlin said.

To date, the carrier has deployed the portal technology to about 250 agencies, and 69 percent of its business comes in through its Snap portal, Whitfield said.

Also on the collaboration front, the electronic insurance exchange that over the years has been on the drawing board in various iterations and arrangements, finally seems poised for takeoff. Now called the Lexis-Nexus Insurance Exchange, and owned solely by the information aggregator with oversight and involvement by key industry groups, it has scheduled a limited implementation in mid-October. Initially, there will be 16 to 20 early adopters, including Brown & Brown, BB&T, Van Gilder, MHBT, M3 and RCM&D, so it can be carefully monitored. If all goes as planned, it should be open to general use by mid- to-late 2011, according to Frank Sentner, director of strategic technology for the Council of Independent Agents and executive director of the Insurance Exchange Trust, which oversees the exchange.

“This has been, and will continue to be, an intermediary-driven initiative,” Sentner said. “We need to validate for carriers that there is sufficient interest from broker partners to justify their investment.”

Nevertheless, Applied Systems' Kellner remains skeptical that this Exchange will succeed, questioning the need for an intermediary to deliver transactions and noting “there have been all sorts of different attempts to aggregate to a third party” that have not succeeded. Nevertheless, Applied Systems products would be able to support it.

Internal productivity

Beyond the bottom line, technology has changed the whole concept of how and where work is done, and that requires continuous upgrading of technology to allow for a mobile workforce. Smart phones can work remotely, enabling agents to handle questions anywhere. Mobile applications allow work to be done in an airport or a client's office.

Another consideration is employee retention. Agency demographics are changing and young people enter the industry without the same security or privacy fears and without the patience to deal with complex workflows, especially rekeying multiple submissions. For them, mobility and streamlined workflow processes are vital in choosing a career in an insurance agency, Harris-Ferrante said.

One of the long-held promises of technology is the paperless office. In 2009, the push was to go paperless to stop expensive mailing. In 2010, it's considered a way to “go green,” to book business faster so the customer has no time to look elsewhere and for agencies to receive commissions more quickly. But despite the desire for streamlined workflow and clear desks, only a small percentage of agents have gone beyond transactional or data filing to reduce paper transmission and really make this work for them, Harris-Ferrante said. An exception is the Chas. H. Bilz Insurance Agency in Covington, Ky., which won the 2010 NetVu Automation Excellence Award for going paperless on its AMS 360 and AfW systems. The agency started with personal lines, then moved to commercial lines seven years ago. The agency now files everything from its personnel manual to the company memos that were once passed with a buckslip from desk to desk, all either appended to an account or indexed so it can by searched and found, said Diane Booth, vice president of operations. Benefits include time cut to reconcile direct bill commissions, freedom from stacks of files and a new hire working several states away. The remaining problem: built-in file cabinets, relics of another time, can't be removed.

When Joseph Totah started Joseph Total Insurance Services in Burlingame, Calif. in early 2002, he scanned every document in PDF format, named it and appended it to the client file in his Nexsure agency management system. “It wasn't perfect, but it was better than the alternative of saving files,” he said. When he sold his business six months ago, “there was not one file I had to hand over to the buyer agency…. It was a matter of giving the buying agency a user name and password to my online management system,” Totah said.

Despite the benefits, technology can only be adopted as fast as an agency can afford. “My investments have to have a return,” Foy said. “I can't spend 20 hours of IT time to save 20 hours of an employee's time.”

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