Apples & Oranges

For State Auto, facilitating electronic business has been the aim of its portal. When the carrier was doing a lot of batch interface, State Auto hit a ceiling at about 35 percent of new business coming in electronically. "As hard as we tried, we couldn't get it higher than that," says Allen.

But once State Auto exposed the quoting engine to agents at the end of 2006, the carrier began to receive 94 percent of its new-business policies electronically, with the lion's share coming through the agency portal, reports Allen. In addition, 78 percent of State Auto's policy endorsements on auto or home are being done electronically. "The technology also allowed the agents to do an endorsement change in real time," he says.

State Auto is extremely happy with how things have worked out in personal lines with auto and home, Allen states. "Unfortunately, we haven't had time to round it out and put all the personal lines of business out there," he says. "Hopefully we can free up some resources to get after that in the near future." With about 65 percent of State Auto's business coming from personal lines, Allen explains that's where the carrier initially put its development dollars. "Now, in 2007, we're doing a full court press on the commercial side," he adds. "We hope by the end of the year to have BOP, commercial auto, and workers' comp exposed to our agents through State Auto Agent Site."

The Republic Group's agent portal allows agents to quote online and submit business, according to Kate Sweeney, director of commercial lines technology for the carrier. "It feeds into our rating and workflow systems [using ACORD XML] and processes the business," she says. "Our objective is to be as hands-off as possible, with the exception of some underwriting checks."

The rating system Republic uses has a series of communication modules, but the modules were unable to handle an entire application of data, which is what the carrier wanted to feed them, relates Sweeney. "There were some adjustments to take in a full XML model from [portal vendor] AgencyPort and break that up into pieces in order to fire up business rules with the system," she says.

The Republic Group initially marketed its portal to rural agencies in its home state of Texas. It took a while to grow, but Sweeney believes once the carrier got multiple lines of business on the system, usage began to pick up speed.

"The feedback has been positive," says Frank Vaccaro, vice president and CIO for The Republic Group. Ease of use has been a topic discussed when the carrier holds agent meetings, he continues. "They feel [the system] is intuitive to use," he says. Republic had an agent group review the design as the carrier was going through the development. "As it was being built, it also was being reviewed by a group of agents to make sure what we were putting out there would fit into a typical workflow environment within an agency," he notes.

One hurdle Republic had to deal with was how agents intended to use the portal. "We had almost a 50/50 split," says Sweeney. Half of the agents wanted all of the underwriting questions upfront so, if Republic was not going to take the business, the process could be stopped without any additional data entry, she explains. Other agents informed the carrier they preferred to enter all the data and then be told whether it fit the underwriting rules or whether they needed a conversation with an underwriter. Sweeney contends satisfying those two contrasting mindsets was Republic's biggest design struggle. "They are very drastic approaches," she says. "It was not a fun thing to reconcile." The carrier ended up putting in place in the early part of the application area a statement that outlines all the edits agents are going to hit through the application, Sweeney indicates. "[Agents] can make a choice to bail out then or go ahead and process all the way through and get additional warnings as they go through the process," she says.

Instant gratification is a key factor that makes or breaks a portal, Allen believes. Customer service representatives are conditioned to getting information quickly, and if a portal isn't tuned that way–if it takes, say, 20 seconds to make something happen online–the patience level isn't there and they won't use the portal. "People are so possessed by speed. That's why whatever changes we develop, if it's not going to make it easier or faster, we shouldn't be spending much time doing it," he says. "The [portals] that are most successful are the ones that are tuned to perform well."

State Auto is working to reduce the keystrokes of the agency CSRs, which also benefits the carrier in return with cleaner data. "When we present a quote, we know that's what we'll be charging for that risk, and agents can sense that speed of response time with the least amount of work to get their job done," he says.

State Auto has solicited agents to have them rate the carrier, and Allen claims the carrier looks closely at the comments. "We've had a new CEO [Robert Restrepo] for a year, and he's very much into listen and learn and then execute based on the information we're getting," says Allen. In the past, State Auto resisted some of the bridging other carriers were doing because it was done with comparative raters and State Auto didn't like comparative raters. "But Bob came in with a whole different attitude," notes Allen. "The agents are using [comparative raters], so let's sign up for them and get the integration. We have to compete, and we've heard the message loud and clear on commercial lines. We have to do the same thing we've been doing pretty successfully on personal lines to get more pitches to swing at."

The portal can help agents with their productivity while creating a self-service environment, explains McDonnell, but he warns carriers to be cautious. "[Portals] are not necessarily a win every time," he says. "There are plenty of examples where insurance companies have rolled out a portal and it's not been accepted."

Where insurers have gone wrong is when they have deployed portals that tried to overhaul the way an agent works. "Insurers have to take into account the way agents want to organize their business," says McDonnell. "[Some carriers] are trying to force agents to change dramatically the workflow in their office, and agents don't find that acceptable."

A few carriers offer agents alternatives, observes McDonnell. "Companies segment their clients, and they are getting into the business of segmenting their producers," he says, adding carriers create different categories of producers and provide different services. "Based on the analysis we've done for clients, there definitely are categories of producers who have no interest in using modern technology or a portal, but at the same time, [those agents] generate large amounts of revenue or profits for the insurance companies. So, carriers provide other services and capabilities for those agents. But if you are someone who is a marginal agent, it's doubtful an insurance company is going to make the extra effort."

The Web is playing an important role in managing processes, believes Josefowicz, because it's the primary way most insurers interact with their agents. "When you talk about process integration, one of the important things about Web communication is the more real-time information you give agents, the more they expect," he says. Today, it has become important to present information such as case status or claims status, which requires the ability to track workflow internally so carriers can have up-to-date status they can share with agents.

If an agent can go to a portal, log in, and find a case he or she submitted two days earlier is sitting on the underwriter's desk while the underwriter waits for medical information, that agent can follow up and make sure the case is moving forward. "It gives [the agent] transparency into the internal processes of the carrier, which makes [the agent] feel like things are really happening," says Josefowicz.

The ultimate goal for Republic is to achieve straight-through processing, but Sweeney reports the carrier is not there yet. "We have a number of back-end system connections to make," she says. "Some of the things we would need to do to make that happen could be burdensome to the agents, so we're not straight-through yet."

The business process for Republic involves several business decisions, continues Sweeney. "We have very active underwriting management as part of the design as well as our marketing department," she says. "There's been a lot of input as to how we accommodate exceptions and how we make it flow as easily as possible."

Plans to enhance the options available on the site deal with evaluating underwriting rules and making things as seamless to the agents as possible. "It all depends on whether our interface has communication modules developed or not, because interfacing with the rating engine is the biggest piece," she says. "In some cases, it's there, and in other cases, it's a development effort."

State Auto started its own technology company called SIS (Strategic Insurance Software) to create an agency management system, relates Allen. "We've got people who understand how to support agents on their turf," he says. "We think it is important to be able to transition data from the management system to the portal so we can link a policy from the agency system and land [the agents] on the quote page, and they can see the quote and select a payment option."

Having the portal allows agents an easy way to get their work done if they don't have an agency management system. However, Allen believes the real benefit will come if State Auto can leverage all the ACORD standards between what it can get out of an agency system and how it captures the data on its Web site. "In my eyes, it's all geared to making sure it's easy for a CSR to give us a shot at a policy," he says. "Let us take a swing at the pitch. If we don't have [the portal] there, we're not going to be getting those pitches to swing at. That would require us to allow [CSRs] to hand enter the data or bridge it from the management system into the portal." Allen emphasizes the importance of metrics to see whether agents really are using the tool. "Once you can see utilization, that's where you want to put in your development dollars," he says.

One benefit State Auto has derived from its portal involves taking a second look if a quote is requested but no policy is issued. Information on the particular quote goes to the data warehouse where actuaries study attributes of the risk on which State Auto was unable to get a sale, explains Allen. "It provides feedback to help analyze that portion of the business to see whether we have a pricing problem or [supplies] metrics to the marketing or products areas so they can start to see some of the trends on business we are not getting," he says.

State Auto looks at metrics from the site's activity, such as whether the number of quote sessions drop, which Allen says could be an early indicator that something's gone awry either in pricing or in a particular territory. "We see those trends before it's too late," he comments.

State Auto also uses the data to drive more business information. "One of our technical people told me he got a call from someone in the business side asking why we had 40 percent less activity the other day," says Allen. "In this case, it was because we were having issues with some Web servers. But if you think about it, we were getting a call from a business person who was looking at these metrics." Such activityrarely happened before, claims Allen.

The system allows State Auto to look at trends, he adds. If the carrier introduces a new auto product in a state, for example, does the business unit see the resulting activity from a quote standpoint? If not, is it a communication issue or a pricing issue? "It provides a lot more visibility if you are looking at the utilization of the Web site," he says.

Compared with five years ago, exposure to such technology for an insurer is much more frequent. "Five to seven years ago, this was brave-new-world stuff for insurance IT groups with the exception of the early movers," says Josefowicz. "But by this point, the comfort level with Web technology, managing security, and all that kind of stuff is dispersed within the IT groups and a pretty common level of expertise within most insurance companies."

Security for portals always is an issue, points out Josefowicz, but it's not an unmanageable challenge by any means. "When it was an unknown and insurers weren't used to doing business with agents on the Web, it always was mentioned," he says. "But insurers manage security the same way everybody else does with SSL [Secure Sockets Layer] and HTPPS [Hypertext Transport Protocol Secure] and password management. There's a whole Internet economy that's figured this out, so it's not a specific challenge for insurers more than anyone else."

One tool McDonnell has been working with carriers to bring to their portals is the enterprise Google search facility. "We've been working with companies to create a portal and allow them to deliver significant amounts of content without a huge amount of effort," he says. Google has a version of its search solution called Enterprise Search, and what McDonnell has seen is companies have focused on building adapters to connect the Google product into systems that a typical insurance company might have–adapters into legacy applications, core ERP systems, and document management systems. "We've also been building out proof of concepts from various functional areas–claims, policy admin, producer support–to help companies quickly visualize what [the function] is capable of doing for them," he says. "You are able to Google your internal content–both structured and unstructured–and you also have the ability to combine both internal and external information. One of the immediate benefits [for agents] is it provides them with a user interface and an approach to working they already are familiar with."

More internal process transparency is what Josefowicz sees ahead for agent portals, along with more ease of use that will push anything agents want to do through the portal. "We're already seeing things such as customizable proposal letters and document generation going out through the portals and real-time quoting and issuing if that's possible with the product line," he says. "[It's all about] more information, making it easier to use, and more transactional capability."

State Auto prides itself on its relationships with agents, asserts Allen. "The strength and stability of our company comes from doing the right thing and being consistent with our approach," he says. "What we have to react to, in today's age, is technology; the speed at which you can deliver information, quotes, and policies is so critical. It's as critical as the business relationships. We're on a dead sprint to try to get a lot of this new stuff in place so we can leverage it across other operations."