Agents are clearly frustrated with having to enter the same data multiple times for different insurance companies, but when push comes to shove, generating income and profits are by far their biggest concerns, a new survey has revealed.
The survey confirmed that agents view redundant data-entry as a significant problem, but the same survey found that more than 75 percent of those agents don't see spending on technology that could help as a top priority.
According to the Agent/Broker Survey conducted in October by Marietta, Ga.-based Litchfield Research, co-sponsored by National Underwriter and Camilion Solutions, based in Markham, Ontario, 60 percent of agents and brokers queried listed "redundant data entry when working with multiple carriers" among their top-three challenges in doing business with insurers.
While this result suggests that single-entry, multiple-company interface–commonly known as SEMCI–would be very important to these producers, only 24 percent of those surveyed said upgrading the agency's technology/computers was among their top-three priorities for the next 18 months. In fact, only a tiny 4 percent identified technology upgrades as their number-one priority.
Litchfield, an independent research firm, surveyed a total of 312 agent and broker respondents over a three-week period in October. Firms with yearly revenues of less than $150,000 and as much as $10 million-plus were included in the sample, with more than half reporting revenue of at least $1.25 million.
By far the top priority for agents over the next 18 months, according to the survey, was "increasing revenues." Fifty-six percent picked this as their number-one priority, while a total of 87 percent placed it among their top-three.
Other popular choices were "increasing market share," picked as the top priority by 20 percent, and "improve profitability," selected as the top priority by 12 percent.
Asked what would make them stop doing business with a carrier, 28 percent of the agents surveyed picked "frustration with redundant data entry" (when asked to check all choices that applied).
This choice, however, was only the fifth-most popular, behind:
o "Carrier pulling out of your state or no longer writing a line of business"–68 percent.
o "Cutting commissions"–67 percent.
o "Inability to handle your book of business"–65 percent.
o "Slow turnaround time"–52 percent.
Agents do believe that technology will clearly play a key role in the future of the insurance business, however, with 70 percent of those surveyed stating that the proportion of online sales at carriers will increase "somewhat" or "substantially" over the next 18 months. Only 3 percent thought online sales would decrease.
In terms of straight-through-processing, 74 percent of agents surveyed said 50 percent or less of their transactions are currently done using some kind of STP. Over the next 18 months, however, 60 percent of the agents expect the percentage of STP transactions at their agencies to increase "somewhat" or "substantially."
Although two-thirds of carriers queried in a separate survey by the same research firm said they do not use STP today, these carriers are also anticipating a trend toward increased online sales and more STP-based transactions.
In the parallel Litchfield study also co-sponsored by NU and Camilion Solutions, 62 percent said they expected online sales at their companies to increase "somewhat" or "substantially" over the next 18 months.
In addition, 67 percent said that the proportion of STP transactions at their companies will increase "somewhat" or "substantially" over the same period.
In addition, while half cited "maintaining current systems" as one of their technology priorities over the next 18 months, one-third plan to "update legacy systems" and 37 percent intend to replace them altogether.
As for the top-three underwriting challenges cited by 196 insurance company officials surveyed, 18 percent picked "can't quickly change systems to match market changes or opportunities," but only 9 percent said "producers complain we are not easy enough to do business with."
Of those not selling online today, when asked why, responses included:
o "Products not suitable for online sales"–37 percent.
o "Lack of technology infrastructure"–35 percent.
o "Lack of producer interest"–23 percent.
o "Insufficient return on investment"–7 percent.
As to why they are using online sales channels, of those insurers queried, 69 percent said it was to "increase revenue and profitability," while 57 percent said it would "be easier for producers to do business."
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