E&S Tech Survey Reveals Growing Use Of Outside Systems

The use of third-party agency management systems is growing among participants in the excess and surplus lines sector of the property-casualty insurance industry, a recent survey shows.

The National Association of Professional Surplus Lines Offices, Ltd. in Kansas City, Mo., said its poll of wholesaler broker and MGA members found only 11 percent used in-house systems for agency management and accounting, with the rest using systems purchased from outside vendors.

NAPSLO noted that the in-house figure had dropped since 2003, the year of the last NAPSLO technology survey, when 20 percent reported using in-house systems or custom programs.

Among third-party vendors, San Antonio-based Custom Insurance Solutions (CIS) was the most popular, with 24 percent of wholesale broker respondents and 20 percent of MGAs saying their agency systems were from CIS systems.

The NAPSLO survey, which was conducted in February by the association's Communications and Technology Committee, also captured responses from insurance company members on other topics where applicable.

For example, company members, responding to a question about the top priorities of their information technology staffs, listed policy issuance and rating as a top priority, with 80 percent choosing that among a choice of issues.

In contrast, for wholesalers, the top issue was security, with 55 percent of wholesalers saying this was a top issue, followed by going paperless, which garnered 45 percent of the responses.

For MGAs, the top issue was developing a Web portal, selected by 49 percent of MGAs surveyed. Going paperless and tightening security were also key issues on the minds of MGAs, with 45 percent saying paper reduction was a top focus of their IT staffs, and 42 percent selecting security.

IT budgets were tighter for wholesalers and MGAs than companies, with 63 percent of wholesalers and 46 percent of MGAs saying that their 2006 IT budgets comprised 0-3 percent of their net revenues, while only 38 percent of companies fell in that 0-3 percent. Among company respondents, 50 percent said 3-5 percent of 2006 revenues were budgeted for IT.

In answer to a related question, 40 percent of wholesalers and MGAs reported having no in-house IT employees, while 100 percent of companies have five or more.

Responding to a question about how agents send policy information, nearly everyone said they received such information via e-mail. Fax and snail-mail are also still popular vehicles for sending information, with nearly 90 percent of wholesalers and MGAs receiving information via fax, and around 60 getting information via postal mail.

The latest survey and the 2003 report, which are available in the Technology section of NAPSLO's Web site at napslo.org, also address reliance on ACORD and in-house standards, vendor choices for policy management/processing systems among MGAs and carriers, security procedures, data access, imaging systems, and other technology-related items.