Chris Mower didn't want to spend a lot of time-or money-building a Web portal for independent agents. But those restrictions didn't prevent him and Royal & Sun Alliance's Professional & Financial Risks Division from developing a comprehensive offering that is designed to develop new revenue streams, improve productivity by eliminating manual processes and help small-business clients understand management liability exposures."The business model, which we validated with customer feedback, was to create a way to distribute products through new channels without creating channel conflict," says Mower, manager of e-business solutions for Royal & Sun Alliance's ProFin division based in St. Louis. "It was about re-inventing existing processes and taking advantage of new technologies."
Last December, one year after Mower's group began conducting market research to validate the business model's goals, client perceptions, pricing and processes, the ProFin division launched its Business Assurance Center at www.businessassurance.com. As planned, the portal not only supports full transactional services for independent agents-from online quotes to binding policies-it also provides agents with educational and loss-prevention information to help clients better understand complex management liability products such as employment practices liability insurance.
Royal's ProFin Secure policy includes directors & officers, employment practices liability and fiduciary coverages targeting small businesses.
Helping hands
The creation of the Business Assurance Center would not have been possible without a series of partnerships with content providers, technology suppliers and law firms.
For starters, RS&A hired Satyam Computer Services Ltd., an offshore software and IT development company based in India, to design, develop, maintain and host the Internet portal. Mower selected Satyam for the project in part because the company works with the Royal's IT solutions group in India.
"We selected Satyam because we wanted to tap into their expertise and have them build it on time, within our budget, and that's what they accomplished," he explains. "The complexity of the underwriting engine and the agency registry were two aspects of the project that we could not develop internally. Satyam brought in two programmers and a business analyst to our office who worked together with the project manager."
In addition to developing a Web front-end for producers and small-business customers, Mower's group and Satyam had to build a conduit to Royal's corporate accounting, billing, clearance, producer and policy systems "so that they could understand our book of business," he says.
The portal has a couple of interesting tech twists. Insureds can purchase and bind their coverage online using a credit card-the Business Assurance Center uses an existing Royal payment model-and, in the future, Mower plans to add electronic check capability. The site also enables agents to use electronic signatures in states where electronic signatures are accepted as legal proof for binding polices.
Also, after coverage is bound, the policy is not printed and mailed to agents, unless it requested. Instead, the policy is posted at a secure location on the Web site-where it can be viewed by the insured, the agent and key people within the agency.
"Our goal is to create a handling system that's 100% electronic," Mower says. "We've developed a low-cost structure because we can't afford having a lot of different people handling paper."
With that thought in mind, Royal's ProFin division partnered with Dun & Bradstreet to help speed the application process for agents. When a participating agent submits the name and address of an applicant to the Business Assurance Center, the system searches Dun & Bradstreet's database of 15 million records, pulls all records that are potential matches and feeds that information back to agents.
The agent selects the right match, and that information is automatically downloaded into an application, complete with a policy quote generated by the portal's underwriting engine-provided that the client meets Royal's underwriting rules. United Kingdom-based Epoch Software Plc provides the document management technology, called Rapidocs.
Agency aid
Building a platform that streamlines the application, quoting and the binding process is just one aspect of Royal's business model for the Business Assurance Center. Perhaps equally important to agents is that it is designed to be a resource center to help agents describe coverage overviews, coverage comparisons and loss prevention to prospective clients.
"Most clients are prospects that need to be shown why they need the coverage," Mower explains. "A high percentage of small businesses don't have human resources standards and procedures to minimize their risks under employment practices liability coverage, so we've partnered with companies that can help implement these procedures, and if they do, we'll write the policy."
Among the legal firms that Royal has partnered with are Arter & Hadden LLP, Jackson Lewis Schnitzler & Krupman and McGuireWoods.
Royal's ProFin division is targeting its Web portal to support agencies in small, rural communities that often are overlooked by larger carriers. Agencies must first complete an online registration, which includes a review of the agency's E&O insurance, financial strength and licensure for the agency and agents. Prior to appointing and licensing the agency, supporting documents must be faxed to Royal.
Each producer at an agency receives a user name and password and can customize the Web interface. For example, a customer service representative who has access to the site will be able to view certain policyholder information, whereas an agent or an underwriter will have access to more detailed information.
The program, which was launched in December, is available in Missouri and North Carolina. "We wanted to start slow and get it right before growing the business," Mower says, adding that the company intends to have the program available in 20 states by year-end. Royal is averaging about five agency sign-ups a week, and, as of February, had generated 100 quotes.
Many carriers are seeking ways of using the Internet to attract new business among small-business owners. Some insurers have tried "direct" models that created channel conflict with their agents and eventually failed. Royal's business model avoids the prospect of alienating agents. "The Business Assurance Center is not a direct model; it is an intermediary model aimed at registering independent agents online," Mower says.
Perhaps the one aspect of the portal that's most attractive to Royal's senior executives is its start-up cost: under $500,000, including technology costs and content, but excluding Dun & Bradstreet costs.
Mower has one suggestion for innovators looking for project approval: "We had to build a demo to get the senior executives to approve it. We had to get it off paper."
