Before making landfall, forecasters had predicted Superstorm Sandy as the storm of the century. In New Jersey and up the Atlantic coastline, its imminent approach had homeowners boarding up and business owners shutting down operations.

In Ocean City, N.J., located on a little barrier island, it was time to evacuate. But insurance agent Michael McMahon was ready.

"Growing up on a barrier island and working in the insurance industry, we had always been well aware of disaster preparedness," said McMahon, account manager of the family-run McMahon Agency. The agency transferred the core of its business to an office farther inland to Seaville.

"In the week leading up to Sandy, we purchased a couple mobile hotspots so we would be able to access our [Applied Systems] Epic system if our Internet connection was down. We had generators ready to go so if we didn't have power we could still run our computers and wireless hotspots."

Before it ended, Sandy caused an estimated $75 billion in damages, killed 285 and changed lives in seven countries. U.S. damages were estimated to be $15.6 billion with 56 deaths.

Despite the downed power lines, flooding and overall chaos, McMahon Agency remotely accessed client records and connected with insurers through Applied Systems. Tapping into Wi-Fi hotspots, employees used their smartphones to access client data in the cloud. And the agency's customers could access around-the-clock self-service through Applied System's CSR24, a web-based system with a customer portal.

That preparedness allowed the agency to begin disseminating information and handling customer calls about coverage 2 days after Sandy struck, while many other businesses were still digging out rubble or draining off flood waters. The agency received 2,300 claims in the 3 weeks after Sandy, and has processed 85 percent of its policyholder claims to date.

Consumer demand for faster, more real-time business experiences is driving the revolution. With agents and brokers on the front line, it's increasingly important to meet client needs seamlessly. Although many agents have agency management systems, more are taking the next steps by storing personal client data to off-premises cloud data management sources and adding portals that allow customers to easily input data, retrieve a quick quote and conduct other self-service functions.

Citing the report, "How Cloud Computing is Reshaping the Insurance Industry," Michael Jackowski, managing director for Accenture, a Dublin, Ireland-based software and multinational management consulting company, sees three trends:

Real-time data collection that allows insurers to monitor driving behavior and encourage insureds to use safety and risk management capabilities
Better use of cloud computing that can reduce costs
Increased customer engagement: Changing customers' perception of insurance from being something they need to something they want.

Deb Smallwood, founder of SMA research, estimates only slightly more than 25 percent of agencies are fully automated, and slightly less than 50 percent have "old, antiquated systems. While most have an agency management system that may not be updated."

This new technology is a customer service that makes the agency seem more professional, said Cameron Winterburn, owner of Winterburn & Assocs. (see sidebar, "Overhauling an Agency"), who recently overhauled the antiquated technology at his agency.

"For the agent, it means less time on a phone call. Clients who call, for example, can get a quick answer and not have to wait for a person to run to a back office file, make a return call and response. Clients are less likely to wait long for premium quotes if they can all another agency and get a quicker response," Winterburn said.

Comparative rating technology has helped the agency add more carriers. "Just about every time, we can quote five or six carriers," Winterburn said. "And for drivers who have less than a standard record, we can quote 10."

Smart mobility

Mobile technology is proving to be a game changer for the insurance industry, especially for independent agents. "The world is changing. We have what we need on our phones," Smallwood said. "If you only do a paper, phone, walk-in business, you're going to fall behind competitors that are automated."

"Clients have smartphones and they understand how to access information," said Stephen Moriyama, executive vice president of Hayward Tilton & Rolapp Insurance Assocs. in Anaheim, Calif. "They have less tolerance for a slow delivery of information. If they can access a quick delivery of information their cell phones, they expect their insurance agent to give them a quick real-time response."

Such was the case when, while on vacation in Hawaii, Moriyama resolved a commercial client's claims problem on his cell phone. He fielded the call, accessed the client's data from files in the agency's system and processed the information. The claim was settled and the client never knew that Moriyama was thousands of miles away. The experience was seamless for the client and for Moriyama, took only a few touches on icon apps.

Insurers are recognizing the shift to mobile and responding accordingly. Chicago-based Property Casualty Insurers Assn. of America (PCI) promotes legislation allowing customers to use their smartphones to show electronic proof of coverage.

So far, 21 states this year are likely to consider electronic proof of insurance coverage legislation. "States are taking another step into the electronic age," said PCI director Alex Hagell. "Electronic proof of coverage, or 'e-card,' is a win-win-win for consumers, insurers and state officials."

Insurers also recognize the need to educate their distributors on the mobile trend. Chicago-based CNA hosts a series of cloud schools to inform agents and brokers of data management and how to secure their data. Sessions are scheduled for San Francisco and New York this year.

Technology Creates Value for Insurers

Insurers are listening to agent and broker demands for more collaboration to improve satisfaction and service, reveals a 2013 report by SMA Research, a Boston-based strategic advisory services firm. More insurers emphasize the value of smart decisions and engage with their distributors to increase book value.

Ninety percent of insurers responding to the report said they will or are already capitalizing on the benefits of agent/broker portals and paperless policy access. About 86 percent of insurers said they will support enhanced linkage with their distribution partners with proposal generation, real-time upload and OCR (optical character recognition) technology, which allows customers and producers to scan pictures and material that can be used by agents and insurers.

Industry experts believe insurers and producers who deploy information technologies such as mobile devices, social media, cloud computing, communication systems and predictive modeling are more likely to be successful and efficient—while those who don't will fall behind.

Insurers understand how technology enhances their relationships. At Schaumberg, Ill.-based Zurich North America, "the frame of mind is to create a value-added framework for the broker. It's good for the broker and the client," said Natalia Mischenko, digital customer-broker marketing director.

Under "Stronger Together," a 3-year-old multi-phase campaign designed to help producers, Zurich emphasizes connection, helping and growing.

The insurer uses RiskIntelligence and RiskImage to let brokers monitor claims activity, learn about exposures and manage risks. First Report Online allows customers to input information and access risk data with their smartphones or tablets.

Zurich also offers a broker web portal, www.zurichna.comn/broker, and an iPad application, Zurich Risk Room, which analyzes connections between different types of risks covering 150 countries.

Special Reports /

How Mobile and Cloud Technology Kept an Agency Running During Sandy

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