Carriers Failing To Achieve Competitive Sales Edge

New York==Insurance carriers working with antiquated technology systems are failing to gain a competitive edge with their sales force, leaving agents to gravitate toward companies that are easier to do business with, observed a consultant during a technology briefing here.

The observation came during a panel discussion that was part of a talk on technology systems called Business Process Management in insurance hosted by FileNet, a technology solutions firm based in Costa Mesa, Calif.

"Insurance companies are missing an opportunity to be competitive with their sales force," said Donald Light, senior analyst, insurance group with Celent.

Responding to a comment from the audience addressing agent's technology ease of use, Mr. Light said agents would be more inclined to bring their business to carriers who are easier to do business with. A carrier who realizes this advantage, he suggested, could gain a competitive advantage over those whose systems remain difficult to use.

Paul McDonnell, senior vice president, insurance consulting business, for BearingPoint, said the ideal answer to the ease of use problem, when it comes to agency management integration with carriers, is fundamental. It would involve simply inputting a customer identification number, name or other identification that would call up the information on file with the company.

However, he noted, companies are still dealing with the integration of a myriad of legacy technology systems. He credited only one company, USAA, with keeping their system current and able to call up client information readily.

He said rectifying this technology gap "can not be done in a weekend. It will take years to get done."

Chris Preston, vice president, product marketing with FileNet, noted that the level of data integration is improving and is getting better as companies update their technology.

The briefing on Business Process Management focused on how this technology can be applied to the insurance industry to help incorporate legacy systems and build a streamlined pipeline aimed at improving the flow of business. The point of the technology is not only to upgrade systems, the consultants pointed out, but to improve work performance and efficiency.

Mr. Light advised that a company should not tackle these upgrades all at once, but in manageable steps at a time, working on one department and expanding from there.

"Start small and have an early win," he said.

However, they did warn about unnecessary costs where upgrades are not properly planned.

Mr. McDonnell noted that one major problem is when business and information technology executives do not align their interests. He said IT executives may desire to augment aspects of a company's system, but they fail to sit down with the business portion of the company to ensure their plans are in line with the company's needs.

"There should be no IT initiatives," he remarked.

"IT needs to build around business objectives," said Mr. Preston. "There needs to be tight integration between IT and business."

Ken Molay, technology consultant for FairIsaac, said carriers should not do a "rip and replace everywhere" of their systems. He said they should look for areas where technology improvements will result in "advantages and benefits." The best strategy, he said, is to determine areas where the technology upgrades would result in greater efficiency and "give greater agility to the system."

Carriers need to seek solution providers who believe in working with open standards that can be integrated with the older systems and who do not come along and say, "You need a new front end system," advised Mr. Molay.