Channeling Agency Distribution: Bend Me, Shape Me

PURE is a member-owned reciprocal insurer that offers responsible owners of well-built, high-value homes comprehensive, customized property/casualty insurance. PURE also offers automobile, jewelry, art, personal liability, and watercraft insurance in the 10 states it currently serves.

PURE is all about providing options, according to Tainsky. "We offer our agent partners and our members enough choices to enable them to conduct business in a way that best meets their needs and makes the most sense for them," he says.

(For more on the agency distribution channel, read this article from Tech Decisions' archives. And check out this Virtual Viewpoint.)

There is more than one way for carriers and agents to do business together, points out Karen Furtado, a partner in the consulting firm SMA Strategy Meets Action, and the key is to find a relationship that works for both sides.

"I definitely see insurers putting forth the effort to help the agents," she says. "I've also seen a number of tech-savvy producers out there. It's not just upload/download; we're talking about marketing programs because their mission in life is to sell business."

Travers feels agents follow the path of least resistance in wanting to get the business on the books and take care of their policyholders. "If the carrier is not helping them do that, they will go somewhere else," he says. "For those [carriers] that have become more attentive to their agents' needs, it is obvious their work is paying off. Carriers are beloved by the agents when the carrier takes care of them. In the independent world, that's the carrier's customer: the agent."

SEMCI

Insurers try to do what's best for their producers, maintains David Finkelstein, sales and marketing director for Capital Insurance Companies, but he believes many carriers get stuck on the fact they have their own proprietary systems. He adds carriers look at the relationship from the perspective of what they themselves need first and foremost rather than looking at the issues from the agents' perspective.

"[Carriers] will have truly reached the point where they are customer focused when they are fully SEMCI enabled–where you have a single-entry platform a vast majority of companies use," he says. "Until we get to that point, you're going to have that struggle where the pendulum swings back and forth."

The technology exists to achieve that goal, Finkelstein contends, especially with the advent of XML. The insurance industry has made tremendous strides in that direction through third-party intermediaries such as TransactNOW, Transformation Station, and others, he remarks.

"There are opportunities to build that interface and create SEMCI," he says. "A lot of the resistance is from the carriers, because they built their own internal systems and there is a myriad of technology they use–some of it old and outdated and some of it new. As a result, everyone is approaching [integration] a little bit differently."

From Capital's standpoint, Finkelstein explains, the carrier has undergone a major reconfiguration of its operating system the agents use.

"We completely replaced our fidelity and surety processing system and rolled out a significant amount of new technology that is Web based and easy for the agents to use," he says. "We're in the process of completing a newly redesigned system for the property/casualty business. We've rolled out the first phase, and it has been well received. We still have some additional steps to take in order to complete the process, but we are moving ahead aggressively, and the ultimate product is going to be much better."

There are important issues to be resolved, asserts Travers, particularly the age-old discussion of whether agents should enter business through a carrier's portal or through their own agency management system.

"Carriers have invested a lot in portal technology and are doing a great job of delivering agent services," says Travers. "The thing is, agents really want to work in their own agency management system because they are dealing with multiple carriers. A strong carrier portal is fine, but the agent still has to deal with five or six different portals [from five or six different carriers], and that becomes a hassle."

Carriers are working harder on seamless integration with the agency management systems with real-time and download initiatives, Travers observes. Agents already have seen some success in this regard, he indicates, since agents are using their own agency management systems to communicate with carriers much more seamlessly than previously.

"There still is a long way to go, but the point is there is movement, action, and some crystallizing of thinking around getting as much integration as possible with the agency management systems so the agents don't have to deal with all the portals," says Travers. "The portal may provide some functionality they can't get through their agency management system, but for their routine things, they want to be able to work in their own environment. Integration with the agency management systems is maybe even more important than the portals for the independent agents."

TOO MANY CHOICES

Furtado believes carriers have a difficult time dealing with agency management systems because of both the number of agency management systems available to producers as well as the different versions of these systems that have not been updated.

"If you look at [some vendors], they may have five or six versions [of their agency management system]," says Furtado. "There are multiple layers of the different versions [carriers] are trying to support and the information they are trying to get out there."

Furtado sees creative strategies being developed, though, such as single sign-on for the agents. "Between the agency management systems and the insurers, oftentimes [producers] can get single sign-on. They might be looking at the portal, but it's really behind the scenes. Workflows also are starting to improve. There are efficiencies that can be gained by using all the technology that is available."

"It's definitely not perfect, but it's better than it was," states Travers. "There are dialects and little differences from one carrier to the next and one coverage to the next, but those are exceptions. There are lots of things to work out, but the progress is remarkable and it's commendable."

PURE is selective about the agents chosen to represent the company. "We install agents who have demonstrated a thorough understanding of the unique needs of the high-net-worth market," Tainsky says. "They must have a proven reputation for providing excellent customer service and sound coverage advice." Agents also must be willing to engage in a truly communicative partnership with PURE, he adds.

"We not only want agents who will succeed at selling our products–we want agents who will collaborate with us to improve their business and ours," says Tainsky. "We value our agents' perspectives on our systems and process issues because they are the ones who use our system. We build it with their needs in mind, so they can conduct business with their clients in a straightforward manner."

The main connection point between PURE and its independent agents is through the carrier's Web site, http://www.purehnw.com, which uses OneShield's Dragon system to enable agents to receive instant quotes or, at a minimum, a good premium indication.

"When we install new agents, we try to understand their business and how they interact with other carriers–including their individual likes and dislikes," says Tainsky. "We enable our agent partners to conduct business in the way they feel comfortable."

MARKETING AND MORE

Some carriers either have or are moving in the direction of servicing policyholders through a portal, notes Furtado. This is critical, she suggests, because policyholders need to consume information 24/7 in the way they want.

"The reality is agents and the majority of agency management systems don't provide this ability to their insureds," she says. "It falls on the carrier to provide this data to the insureds. Customer service then can focus on service, and the agents can focus on sales. The agent shouldn't have to be so concerned with the service element."

Insurers also are starting to provide to their agents marketing information, such as analytics to help the agents identify classes of risk that could be great opportunities for growth.

"As carriers spend more money on how to harness external and internal data and use business intelligence, [carriers] can provide information down the chain to the agent and empower agents to a level of analytics agents never dreamed possible," says Furtado. "[In the past,] they relied on lists to attract business. Now, they are getting information from the carrier that will help them sell, and that is a benefit to both."

One aspect of service carriers are providing to policyholders that assists the agents is in the area of what Travers calls "overflow support" via the carrier's call centers.

"Agents can take advantage of the carrier's call centers for after-hours service or overflow service," he says. "That allows agents to be more productive. Agents nervously are seeing how that works, but they are finding the carriers are providing good service and it is transparent–the policyholders are happy to receive the good, 24/7 service, and the agent doesn't have to deal with some of the things he or she might not be the best person to deal with anyway."

PORTAL, PLEASE

Capital offers an agent portal, and Finkelstein believes the technology has seen acceptance in a number of areas, but he adds, there always are opportunities for improvement.

"We've found with so many technology-based applications, it is a continuously improving spectrum," he says. "It doesn't ever really end. The functionality and configuration for the agent portal we had in place two or three years ago now is something that is either outdated in some respects or can be improved upon with some of the newer technology tools and applications that are available. We constantly are looking at ways to make it better and easier for the agents to conduct business with Capital and access our information, our forms, and all the other tools they need to do their job effectively."

For example, agents have the ability to go online to the Capital Web site and view updated payment information and outstanding balances for their customers so they can answer any inquiries that might come in.

Capital has seen an increase in the use of the agent portal and the technologies that are out there, especially as the carrier has made enhancements to its different systems.

"It's certainly something [agents] are appreciative of, and they recognize the enhancements," says Finkelstein. "One of the things we've tried to do is engage [agents] in the discussions as we go about making those enhancements. We have a couple of agent technology councils we use for feedback and other guidance and direction as we consider what changes to make and how the new configurations should look going forward."

IS EVERYBODY HAPPY?

PURE offers its agents flexible systems to conduct business to meet their varying needs. With a wide variety of agent partners, Tainsky believes every agent provides PURE with a different perspective.

"When we install new agents, we try to understand their business and how they interact with other carriers, including their individual likes and dislikes," Tainsky points out. "We enable our agent partners to conduct business in the way they feel most comfortable.

"For example, some agents distribute policies to our members [policyholders] themselves, others prefer for PURE to print and mail policy documents to members, and other agents choose for PURE to electronically deliver policies to members.

"We've developed our business processes to provide as much flexibility as possible as well as being environmentally friendly by pushing people to go green," says Tainsky.

The goal of better connectivity between agents and carriers is to allow agents to spend more time selling insurance policies. "Carriers want agents to be as productive as possible, and that means selling insurance and retaining customers–business productivity," says Travers. That is a strong incentive to drive improvements in ease of business for agents, and that applies both on the captive and the independent side, he contends.

For agents selling personal auto policies, Travers adds, competition also encompasses the direct writers. "[Carriers and agents] have to compete effectively with the direct writers, so carriers have to make life easier for agents so they can compete on both cost and ease of business," he says. "People go to direct writers' Web sites, see quotes across several different competing carriers, and buy insurance online. They are going around the agent. In order to compete with that, the whole chain of commerce has to be as streamlined as it possibly can be."

Furthermore, Travers continues, agents need as much help as they can get because not many of them are technologists. "Improving the processes is up to the carriers," he says.

SELF-SERVICE

Self-service portals are a huge asset provided to the agents by carriers, according to Furtado. "I don't see a majority of producers feeling they don't want the insurers' help on servicing the policyholder," she says. "There's a different reality out there now."

Once there was concern about the Web and the agents' place in the new world of insurance commerce, but Furtado believes that issue has sorted itself out.

"Tech-savvy producers understand the power, and it frees them up," she says. "They know their policyholder is being serviced, and they can focus on the personalization of service, not the mass servicing."

Whenever PURE's members have questions regarding their policies, they receive timely assistance from their personal agents as well as from PURE's member services team.

"Although we don't have a self-service portal for policy administration, we have taken on the methodology of a 'push' approach," Tainsky says. "While other carriers provide policyholders with a link to access their policies through a Web site, we actually send policies to our members, either directly or through their agents. We think this makes it easier for our members to interact with us and spares them the inconvenience of having to remember their user names and passwords."

This also provides members with the option of sharing their policy information with their financial advisors, spouses, or other individuals who may be insured on their policy.

Agents are nervous but optimistic the self-service options will be a good addition to the service formula, but Travers adds, agents are protective of their relationships. "If you are pushing work to the customer, that's a bad thing," he warns. "If you are cutting agents out of important interactions, they don't like that. They want to have involvement with their customers and maintain that value-added relationship. If [self-service] is additive and non-disruptive, agents are pleased with it, but this still is unfolding."