The industry has been working on insurer/agent electroniclinkage since the mid-1980s, trying to manage the complexity ofnumerous systems in the agents' offices that need to talk to manydifferent insurance systems. In order to examine the state ofconnectivity and explore how insurers and agents are directingtheir efforts to improve communication, SMA recently completed amajor study investigating insurer and agentlinkage.

Overall, impressive progress has been made. But, there'scertainly further work that can be done to create more productive,collaborative interactions. Agents and brokers want an easier, moreefficient way to do business. At the same time, insurers arerecognizing that functionally rich linkage can be a major marketdifferentiator. The insurers that are leading the pack are findingthat electronically enabled interactions are contributing toprofitability, driving growth, improving policyholderrelationships, and keeping business soundly on the books.

Over the past few years there have been major investments andmajor accomplishments in real time upload capabilities and in theuse of comparative raters, as well as in data capture throughagency portal capabilities. While the progress is commendable, ithas become apparent that insurers need to support all types ofsubmissions and all ways to pass information – whether by phone,fax, portal data capture, email/pdf, real-time upload, comparativeraters, core system web front ends, or whatever might come down theroad.

Happenings with Real-time Upload andDownload

Real-time upload and download are foundational and fundamentalmeans of data exchange, capabilities that most insurers shouldhave. With real-time upload, producers can submit applications fromthe agency management systems to multiple insurers with just asingle entry or click. Download supplies information and insightsfor agents and brokers about policies, billing, and claims.Together, real-time upload and download provide the full round-tripof information sharing.

Upload/download capabilities in the insurance industry arematuring, at least for some lines of business. The SMA survey foundthat for personal lines, the vast majority of insurers, agents, andbrokers can support real-time upload and download for at least oneline. Insurers report that their current ability to supportreal-time upload varies for lines other than personal – nearly halfprovide support for small commercial and for middle marketcommercial, and less than a quarter for specialty lines. It isinteresting to note that 76 percent of agents and brokers say theyare able to support real-time upload for small commerciallines.

Overall, insurers understand how important support for real-timeupload and download is for the success of the business.

Portal Progress

Portals have been a focus area for insurer investment for atleast the past 10 years. The first portals were aimed mainly atdata capture for submission. However, the SMA research shows that asignificant evolution of portal sophistication has occurred inrecent years. Portals are serving as the data hub for insurers,receiving data from any medium. They function as a place where thedistribution channel can go for information about the insurer,risks, and processing status.

Three quarters of insurers report that agent/broker portals thatcapture and process transaction data are already in place. Anadditional 20 percent of insurers say they are evaluating orpiloting portals. Most of the current investment is targeted foradditional capabilities to provide businessintelligence/dashboards, collaboration and/or workflow, andactivities/alerts and notes. Interestingly, over one-fourth ofagents/brokers report they plan to evaluate or pilot policyholder(self-service) portals. Over the next three years, insurers reportthey plan to add communication functions, licensing, and socialmedia capabilities. Agents place social media, FNOL, andcommunication functions at the top of their list.

The advantages that portals provide are clear, but for optimalvalue, insurer/agent connectivity must go beyond basic informationexchange. Portals must do more than handle data capture and quotes.Portals should facilitate collaboration and even automate someaspects of the negotiations. The real value occurs when a full setof capabilities make it possible to complete the transaction withincreased efficiency and better insight.

The Next Level: Collaboration andVisibility

Both insurers and agents want to see how the book is performing.Immediate and informed service is expected, if not demanded by allparties involved in insurance transactions. Sophisticated awarenessand understanding is fueling better decisions. Hence, thecollaboration and visibility part of insurer/agent linkage isattracting more attention.

Business insight and intelligence, seamless and smoothworkflows, and visibility are moving up in focus and priority; theyare the key levers for success. The industry is rapidly progressingtoward the next level of maturity.

It is moving beyond the basic real-time upload, simple inquiry,and quote data capture, and on to enhanced levels of support thatdrive business advantage and value. Using a variety of interwoveninteraction methods and information sharing techniques and tools,connectivity is advancing well beyond just exchanging data tosharing and collaborating to improve customer satisfaction andbusiness performance.

About the Author

Deb Smallwood, the founder of SMA, is recognized for herexpertise in investing in technology to influence competitiveadvantage in the insurance industry. She offers a fresh perspectiveon how business capabilities can be enabled to meet strategicgoals. Exclusively serving the insurance industry, Strategy MeetsAction blends unbiased research findings with expertise andexperience to deliver business and technology insights, research,and advice to insurers and IT solution providers. Smallwood can bereached at [email protected]or 603.770.9090.