Why Can’t We Be Friends?

"They don't think of it from the technology perspective as much as from an application perspective," he says. "Is this going to help me write business?"

In some ways, managing technology and relationships takes different mindsets, according to Salz.

"You get the neatest technology sometimes from techy types that aren't always the ones good at building relationships," he says. "What I think needs to happen is the tech people need to spend time sitting in the agencies and doing some business. It's not just the underwriters that need to build relationships with agents, the technology people and the claims people need to keep dipping their toes into that agent water."

Ellen Carney, senior analyst with Forrester Research, sees carriers struggling to gain more traction with agents without the long-term relationships that are vital.

"If we do one more portal or give them a new mobile connection, it's going to make everything great and they will write us first," she says. "It just doesn't work that way."

Carriers have built attractive tools for agents, but Carney maintains those tools are not as important to the agents as the carriers would believe.

"The agents pick the tools that are easiest for them to use," she says. "Agents want access to information and access to underwriters. They want their lives to be simple, but carriers have made their lives complicated. One agency told me they hired someone to be the portal navigator. If an agent wanted to get a quote they went to this one person because that person knew how to navigate the portal and come back with a quote.  There's some craziness going on there."

EASE OF BUSINESS

Having the most appropriate insurance solution for their clients will always be the key factor for independent agencies, explains Karlyn Carnahan, a principal with Novarica.

"Carriers have to be sure they have the right combination of coverage, product capabilities, and claims services," she says. "If the carrier doesn't have those things it really doesn't matter how good anything else is."

Given that more than one carrier would have the appropriate solution for a policyholder, Carnahan adds that ease of doing business comes next.

"The question is: What does ease of doing business mean? For most agents it's a combination of things," says Carnahan.

The first factor, she explains, is responsiveness.

"The agent wants to know early what risk a carrier is going to accept," says Carnahan. "It's OK to say no, just don't make it a slow, drawn-out no. This is where having business rules built into a portal or into upload/download helps a carrier to deliver that responsiveness."

Secondly, agencies want consistency.

"Agents want clear expectations of what the carrier wants from an underwriter," she says. "This also can be accomplished through business rules."

A third area is flexibility.

"A good underwriter who can respond and think outside the box and find a solution when one isn't readily available is invaluable," says Carnahan. "Carriers have to define [the process] in a way that allows [underwriters] to override the process in the appropriate circumstances. Clearly they are not going to do that on a low premium account, but if there is a larger more complex account you have to allow an underwriter to address it."

Underwriters are experienced people with deep knowledge of the business and carriers don't want them to be working on simple accounts.

"Using business rules on the easy stuff frees up the underwriter and allows them to apply that expensive underwriting expertise to situations where it is really warranted," she says.

Agents also have a ton of expertise. The difficult piece for them is to understand how to best deploy that expertise across a multitude of carriers.

"Each carrier has their own set of requirements, their own rules, and their own underwriting," says Carnahan. "This becomes the challenge for agents to try and remember who they work with and how they work with them. If you use technology to support that it certainly helps. One of the ways carriers help to supplement an agent's expertise is to let the agents apply their expertise in areas that are most important to them and have the carrier pull in third party data for things that you don't need to waste an agent's time on. That validates a lot of information and saves the agent's time. It speeds the process along."

"When you think about culture and how companies can be easy to work with—or not—it's an end to end issue," says Carol Drake, vice president of marketing for Grange Insurance. "Technology has to be easy in terms of how [the agents] want to use it. It's table stakes anymore. You have to be good at it in order to be competitive in the marketplace."

Grange trademarked the acronym EODB a decade ago, according to Drake.

"It's been a mantra of the company," she says. "Our philosophy is if agents want to use our proprietary system, terrific; if they want to work with us from an agency management system (AMS) or a comparative rater situation, we make our technology easy to plug and play."

Michael Fergang, vice president and CIO of Grange, believes the EODB trademark means that Grange has developed a culture around its relationship with agencies and the commitment hasn't changed.

"Because of what we defined a long time ago as the way we want to do business, from the way we prioritize what we work on to the way we get business requirements, with the way we pilot with agents, and the way we prototype with agents, they are intimately involved in every aspect of our processes, from the conceptual idea to actual implementation," says Fergang.

When Grange does pilots, Fergang estimates the carrier uses about a dozen agents to test the process and then will roll out the process to just one of the 13 states Grange writes business in.

"We modify our implementation based on the feedback we get from agents," he says. "We meet with an advisory board and focus groups on a regular basis. They have conceptualized ideas and they see what we are building. They might touch a prototype that simulates how they are going to do business. It's hard to think we'd ever change our culture because our culture is all around EODB."

FROM THE TOP

Salz recently took part in a panel discussion on how carriers can make it easier for agents to write business. The panelists came from three different perspectives, but all had a common message: To really make progress on ease of doing business and to come at it from a strategic direction, carriers need to focus on three things.

1) The agency/carrier relationship will only work if there is strong, sustainable leadership from the top

2) Ease of doing business is not a project, it's a culture. Carriers need to breathe it into the entire organization and everybody, in some way or another, has an effect on that.

3) You have to find a way to reinforce ease of doing business so people within the organization get feedback to support what they're doing.

One reason the panelists with Salz were emphasizing direct, sustained leadership is because many carriers get started in the direction of ease of doing business, only to find it is hard work, so they return their focus to transactions.

"Carriers have to make their people understand that it is a strategy, not a tactic," says Salz. "That requires the president of the company getting up and talking about it all the time."

Agents are looking for effective working relationships with carriers, explains Salz. What that looks like depends on the carrier, though.

"What do you already have in place and in particular what is the culture you currently have?" asks Salz. "For some of my clients, it's clear that ease of doing business is something that's built into the DNA of everyone in the organization, but if I also try to think about more operational terms, I think the first piece of an effective relationship that agents are looking for is support in writing business. Agents are sales people. They are out there trying to sell. They want support in writing business."

Such support varies, depending upon how carriers enter the marketplace and where they already are, points out Salz.

"In fundamental terms it starts with carriers having a clear appetite for risk," he says. "That doesn't mean agents want a checklist of what business the carriers are interested in writing. It's more of a common understanding of what the carrier's business is really about. If the agents 'get it' they will send the right business to the carrier, which will make both sides more efficient. It also means that the relationship between the carrier and the agent will be stronger."

"I like the idea of other companies changing culture because that means they are not a speed-to-market company if they are worried about their culture and how to service their customers," says Fergang.

AGENCY SYSTEMS

The agency management systems used by so many agents are made for upload/download, points out Carnahan. The AMS have the functionality for an agency to manage the overall performance of the agency along with a built-in flexibility to allow the agents to work the way they choose.

"As carriers continue to invest in real time and build out functionality, agents will prefer that because it is a simpler process," says Carnahan. "Using real time, you can't differentiate the experience, whereas when using a portal you can. Having an easier process or a slick user interface seems to have an impact on where an agency places business. Working through a portal allows a carrier to deliver robust functionality with a differentiated experience in order to grab more market share from that agent."

Simplicity is a key in the agency world.

"I was interviewing some agents about different portals—whose was the nicest," recalls Carnahan. "One of the CSRs named a particular carrier and I asked why that portal was so great. She said, 'It's so easy, my six-year-old can use it.' Consequently, that's where the agency places most of its business."

Salz believes the biggest challenge agencies face with technology is once they reach a point, the technology has already moved on. "It's a moving target," he says.

It's difficult to compare an insurance underwriting experience with retail purchases online, but shoppers don't care what a carrier's problems are.

"The competition is tough and carriers understand that, but in some ways it comes back to the question of culture," says Salz. "Changes are easy to understand at a cognitive level, but that's not where insurance companies come from. A lot of companies solve a technology question and move to the next, but they don't think of a strategy in the larger, system sense. There's no way you can get there if you're always thinking of the next cool tool. It comes back to strategy and leadership. It's hard being sustained and focused and not looking at gimmicks."

The culture issue is a combination of factors, according to Salz. In some ways it seems transactional, but it's also human.

"Carriers need to pay attention to their underwriting process," he says. "They need to look at it from the perspective of whether there are steps that can be eliminated. Underwriters need to not only understand how to assess a risk, they need to be great listeners and know how to empathize with agents. As the Moody Blues sang, 'It's a question of balance.'"

Fergang explains the way Grange's independent agents want to do business is ultimately what matters to the carrier.

"We don't dictate companies going through our portal or a comparative rater," he says. "The infamous black box that does the editing, pricing and rating is the same black box if you come to our portal or a comparative rater or an agency management system. You might have a different user interface, but what you get back is consistent 100 percent of the time."

SKILLS OF AGENCIES

The skill level of the various agencies that do business with Grange usually depends on the agency's business model.

"Some agencies don't want to invest in the cost of technology," says Drake. "Our system is such that they don't have a need to invest in one, but the majority of our agencies are of a size that they need an AMS because of the number of carriers they represent. We don't dictate that. Our philosophy is we are a plug-and-play company and we are going to be easy to do business with however they choose to do it."

"The more [the agencies] take advantage of what's available to them, the more efficient it is for them and for us," adds Fergang.

"A lot of office managers are in charge of technology. It's the classic small business—running on a shoestring and the demand in a technology-embedded business is stressful for the smaller agencies," says Carney

One of the biggest pain points for carriers—particularly with the issue of upload/download—comes when agents modify fields.

"Carriers design things to work a certain way—for fields to go into certain fields," says Carnahan. "Once agents modify fields, they may have a field that a carrier believes is one piece of data and the agent believes it's another. When the carrier downloads information they override that data or they upload it and it doesn't make sense. Agencies have to be able to customize to manage their agents the way they need to, but on the other hand it causes problems for both parties because of the lack of consistency.

Conversely, getting data back from carriers that overrides the agency's own data can be a big challenge for the agent.

Right now, most agents Carnahan has surveyed indicate a preference for using the carrier's portal rather than the real time upload/download.

"First of all, you definitely find a preference for this in large agencies that have multiple carriers to deal with," she says. "Small agencies don't necessarily have that need to manage so much. Carriers have invested a lot in portal technology and in many cases [the portal] is more robust and functionally richer."

Carriers want the agencies to step up and quote them first and if an agent does that they will receive more help from the carrier, explains Carney. She recently went to a carrier's website and tried the agent locater field. She reports being surprised that an agent closer to her address wasn't the first name on the list.

"It turns out [the carrier] points you to the agent that is more likely to write that carrier's business," she says. "It's great for that particular agent—it's a qualified, solid lead and they are going to give it to the agent more likely to write their business. It boils down to loyalty. In a market for independent agencies there isn't a lot of loyalty."

On the other hand, agents will go with whoever is easiest to work with and the one with the most competitively-priced product.

"That's what agents are expecting from their carrier partners: you are going to push me leads and make my life simple and your product development people are going to come up with stuff no one else in my area offers," says Carney.

MEETING AGENTS' NEEDS

Bruce Winterburn, vice president of agency markets for Vertafore, believes success can be achieved when the carriers and agents view their relationship as a true partnership.

"Both sides need to work together to make workflows as seamless as possible," he says.

Working solely with one carrier might be simple enough, but most agents work with multiple carriers, which unsimplifies just about everything, according to Carney.

"If you have five portals with different passwords it makes it challenging," she says. "The best use for posted notes is writing down passwords and posting them on monitors. If it is not simple to get access to the portal you built for me and I can't remember the password—or change the password every 30 days—that doesn't make life simple."