In the insurance industry, good communication between carriers and agents has always been essential, particularly when a carrier's ability to work effectively with agents has such a clear bottom-line impact.
What has changed over the years is the role technology plays in supporting this relationship. The Web has made instantaneous communication possible, and insurance buyers have come to expect rapid response from carriers and agents as evidence of their ability to provide good service.
Real-time processing is the technology that brings this type of communication to life in insurance. By eliminating duplicate data entry, streamlining workflows and putting essential data at the fingertips of agents, real time is transforming the industry to create more efficient links between insurance companies and their agents.
First introduced in the late 1990s, real-time processing was created to facilitate the next generation of data communications between agent and carrier systems. Use of the technology continues to grow, as the industry has defined more universal data exchange standards, and carriers and agents have learned to trust the benefits of sharing information electronically.
According to IVANS' recent "2010 Carrier Survey," nearly half of insurance carriers have already implemented real time, and another quarter expects to do so in the next two years. Real-time growth will continue to be fueled by carrier interest in improving operational efficiency and increasing responsiveness with customers.
Today, carriers are taking advantage of real-time processing in a number of ways. Many are integrating this technology with Web-based applications–particularly Web portals. Designed to give agents easier access to quoting and rating information from carriers, portals are widely cited by carriers as a focus area for 2010, and nearly 70 percent of IVANS' survey respondents plan to invest more in Web sites and portals this year.
The data flow to carrier portals is significantly more efficient when integrated with real-time processing. Rather than re-keying data that exists in their agency management systems into carrier portals, real-time solutions can pull data from the agency system and pre-populate parts of a portal form–such as a quote request.
Some carriers have taken this integration further, skipping the Web data entry form completely through the application of edits and business rules before or as part of an upload, allowing the carrier systems to respond back immediately with bindable policy quotes.
Carriers and agents not only appreciate this integration because of its obvious efficiency benefits but also because they can shorten the sales cycle and close on new business opportunities more quickly.
Carriers are also integrating single sign-on technology with real time. Single sign-on enables agents to access carrier systems–such as a portal–directly from their agency management systems, without having to login separately to the portal.
This technology is one step toward eliminating a longtime complaint from agents who feel overwhelmed by the number of login IDs and passwords they must maintain to access carrier Web sites on a daily basis. Agents are actively pushing carriers to do more of this integration, with the ultimate vision of agents using their management systems as the jumping off point to access any carrier system.
Real-time processing is also moving beyond personal- and small-commercial lines, where it has been most widely adopted, into midmarket commercial and specialty arenas. The Agents Council for Technology recently established a work group to recommend a policy quoting and issuance workflow for midmarket commercial using real time.
This type of submission has in the past relied heavily on frequent and inefficient personal interactions between agency customer service representatives and underwriters to assess and price risks. This is due to carrier need for additional data to properly underwrite and price policies.
In the past, this type of data would have been provided via fax or e-mail, making it impossible to automate the quoting and issuance process. The work group is looking at how existing and yet-to-be-approved ACORD Standards could be used to automate the submission and quoting workflows, providing efficiencies similar to those being experienced by personal and small commercial lines.
Similar efforts are also underway in the excess and surplus markets, beginning with the standardization of supplemental applications, and eventually real-time data exchange standards associated to those forms. With a broad and opportune base for automation, specialty markets are the next logical step for real time, as the technology continues to expand its reach across the insurance industry.
Real-time processing is delivering results, yet there is still plenty of room for expansion. Regional and specialty carriers will drive the next wave of growth, as they look to streamline operations that have traditionally been paper-based. Many larger carriers have already implemented real-time technology, so the opportunity comes from further integrating real-time communications into their operations.
Investing in programs that encourage agent adoption of real time is key, and more work needs to be done to increase awareness and adoption among the thousands of agents not yet on board. Agents who are already conducting real-time transactions with another carrier make excellent candidates, as do agents who are active users of download technology today.
Agents seem open to change, with 85 percent in an IVANS survey reporting they are already using or very likely to use real-time technology.
The insurance industry has come a long way in its use of automation, and the desire for real-time communications through mobile devices, social networking and emerging technologies in the consumer space will only intensify buyer expectations for instant information gratification.
Customers want quick answers, or they will look to a competitor who can more readily respond to their needs. Real-time processing works because it addresses this growing appetite for information exchange, and ultimately, it will become the way all carriers and agents must operate together to be effective in an increasingly interconnected world.
Clare DeNicola is president and CEO of IVANS Inc. She may be reached at clare.denicola@ivans.com.
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