Agents Focus On Ease Of Doing Business

While carriers are working hard to improve their “ease of doing business” with the introduction of new, “real time” technology and functionality, experts say agents and brokers need not wait for insurers to make advances in their systems to improve the business process for staff, partners and customers.

During a recent webinar on the topic sponsored by Highline Media, an affiliate of National Underwriter, David West, research area director for insurance at Tower Group, discussed the technological evolution and advances insurers have made over the years.

In the past, the insurance transaction was paper-intensive and needed tremendous manual effort, he explained. The human element led to inconsistent decisions that undermined agent and client relationships with carriers. Inconsistency in underwriting decisions, he added, spurred suspicion and mistrust in the minds of both agents and policyholders toward carriers.

“That is how underwriting was done for many, many decades,” he observed.

That led to the concept of a bad risk, which is a misnomer, he said, declaring that “there is no bad risk. The only bad risk is an underpriced risk.”

Today, there is greater focus on automation intended to eliminate underwriting inconsistencies and smooth out the relationship between agents and carriers. “The company that makes it easiest to put business on their books is the one that will get the business,” he said, adding that in a soft market, that can prove to be a significant differentiator.

“The hoops that we make our agents go through are truly barriers to sales,” observed Mr. West, who said the technological evolution in underwriting is working to eliminate those barriers.

However, the concept of “ease of doing business” should not be limited to the carrier-agent relationship, points out Nort Salz, co-founder and president of Deep Customer Connections Inc.–a consulting firm in Acton, Mass., specializing in this area.

The company recently completed a survey of agents on what they expect from their carrier partners–a subject, he said, that applies just as critically to agents.

He noted that agents and brokers need to put emphasis on their transactional effectiveness and make certain they have good processes in place.

A good process, he said, needs to be repeatable and efficient–not only from the standpoint of dealing with clients on a daily basis, but also finding potential clients and being able to convert them into policyholders.

Having a good process in place, no matter what size agency or brokerage, is essential before an intermediary can consider automating the operation further, he noted. “Get the process cleaned up and then get automated,” he suggested.

A good process, he continued, means being competent in understanding insurance and the needs of the customer. To that end, an agent needs good listening skills, he pointed out.

Computer technology is important, but there are other areas to pay attention to, he said, such as having a good customer service representative phone system and effective management of it, combined with good interpersonal skills.

The glue holding together any agency is its culture, he said, and what is important is that it is a culture that responds to the customer's needs. Those needs mean prompt call-backs, empathy for the client, and knowing little things about the customer that allow the agency to take the initiative in pointing out potential exposures.

“These are subtle things that make the difference,” Mr. Salz noted.

Transactional competence is also a big issue, he said. If a customer cannot easily contact and work with an insurer, it reflects negatively on the agency, and affects the ongoing relationship.

One way to bolster transactional competency is to improve the response time between the client and information they seek, according to Linda Dodson, assistant vice president and E-business manager for Chubb.

Agents, she said, need to first concentrate on adopting the real-time technology carriers are offering them. While there is some customized material carriers gather that will not be available in the near future, the “primary day-to-day” information critical to clients is available.

“Responding to a client immediately is critical,” said Ms. Dodson. “Telling a customer to hold on while you navigate the system is not acceptable anymore.”

She noted that clients are familiar with the real-time capabilities of financial sites and expect insurers to provide the same. Real-time systems are “so easy and free” for agents that they have no excuse for not using them, she added.

Carriers have invested a lot of money in these systems, she said, but are disappointed over the lack of adoption by agencies.

“The agencies have to think: This is no longer about technology. [This] is the cost of doing business,” and they have to adopt real-time systems and processes, she said.

She advocates that agencies begin doing audits of their customer service representatives to make sure they are using the real-time capabilities inherent in many agency management systems.

She added that too often, when a carrier's system fails, agency associates wait for it to come up again. Instead, they would alert the carrier immediately because they may not know there is a problem.

“Feedback is critical,” she said. “The biggest thing [an agency] can do is to start simple, step by step, before taking on the next critical piece of technology.”

The adoption of technology can enhance efficiency and freedom for agency principals, administrators and sales staff, as one independent agent pointed out.

Thanks to technology, Adam Wolfson, owner of Wolfson Insurance Brokerage in New York, an affiliate of Global Coverage Inc., is able to conduct daily business with his New York metropolitan area clients from his office in San Francisco.

His book is an mix of primarily wealthy personal lines clients and small restaurant accounts, along with other commercial interests. The main office is headquartered in New York, but he spends 60-to-70 percent of his time living in San Francisco and works from there.

Because the agency scans all its paperwork, he can readily access a client's file with a few clicks on the computer. Voice over Internet and e-mail allows him to discuss policy matters, resolve issues and give advice on insurance matters. Daily downloads from carriers update client changes quickly, reduce errors and cut costs.

The added benefit of scanning all paper is that files don't get lost or misplaced, he said, and should anything ever happen in the office–a fire, perhaps, or even a hurricane–all the computer files are backed-up off site.

Another advance, he noted, is that some insurers, such as Chubb, have their claims adjuster's notes electronically stored for access by anyone needing the information.

“In the past you had to call the claims adjuster to get information; now it is all online,” he explained. “This saves time and we do not have to play phone tag with our customers.”

Mr. Wolfson noted that personal lines is further ahead than the commercial side simply because commercial lines are a more complicated risk–but how far behind depends on the carrier.

Despite all the advances in technology, noted Mr. Salz, the role of the independent agent comes down to having good relationships with clients and providing transactional competence.

“Independent agents are alive because the independent agent adds value,” he said, noting customers need to trust that the agent knows what is best.

Technology, he said, is simply a tool for agents to use, but they must never forget to continually cultivate their relationship.

“Essentially, technology is in the service of the relationship,” remarked Mr. Salz.

“Independent agents are alive because the independent agent adds value…[There] are subtle things that make the difference.”

Nort Salz, President

Deep Customer Connections Inc.