With the growing trend of direct-to-consumer insurance sales, some industry experts have questioned the future existence of the agency network. However, news from many carriers leads one to believe independent agencies aren't going anywhere anytime soon. In fact, carriers and agencies are taking steps to improve the relationship. Ease of doing business/time to market was among the top three priorities of CIOs/CTOs surveyed for Boston-based Celent's "Insurance CIO/CTO Pressures, Priorities, and Plans in 2008." Survey respondents said they are focused on getting new business in the door, servicing it efficiently and using more modern infrastructure. New business may come from independent agents and brokers, or from exclusive agents.
These channels need the right tools to bring in business. "Our agents generally ask us for simple, practical ways to make it easier and faster for them to get their work done and support our mutual clients," says Steve Yacik, e-business manager of Chubb Group of Insurance Cos., Warren, N.J. "Even small, incremental improvements that reduce tedious data entry, or more closely integrate the agency system with our system are very much appreciated by our agents."
In its research, Celent finds that improving agent efficiency is important. "That points toward reuse of data as a key issue, and solving the data problem helps the agent become more efficient, which, in turn, helps the carrier become more efficient," says Craig Weber, managing director of the firm's insurance group. "In the P&C world, it's uploads and downloads - leveraging agency management systems. Because there is less use of agency management systems on the life side, the issue is less prominent - it's generally electronic data capture for new applications for new business. There's more of a use of proprietary technology on the life side. You have a better chance of getting an agent to go to a carrier's (proprietary portal)."
AGENCY MANAGEMENT SYSTEMS
In February 2008, Celent asked 200 independent agents about their preference between proprietary tools and multicarrier tools, such as agency management systems. Almost seven out of 10 respondents say they will use either type of tool, as long as it makes their job easier. The other three out of 10 are split, with a slight preference for multi-carrier tools.
Celent believes that support for agency management systems, channel-specific platforms like those provided by the national broker/general agents (BGAs), and robust proprietary systems is essential for carriers that wish to meet the needs of a broad spectrum of independent producers. But for all types of tools, the focus must be on crafting a solution that feels seamless to users.
And, for Bennion Taylor, a Murray, Utah-based agency, syncing with its agency management system does simplify some of its day-to-day activities and, therefore, improves the relationship and communication with its carriers. While Bennion Taylor implemented AMS 360 agency management system from Bothell, Wash.-based AMS Services, the vendor contacted carriers to work with them on connecting with it. "Some of the companies won't do it, but the larger ones will," says Don Taylor, president of Bennion Taylor.
By using the agency management system with the carriers, the agency reduced account quote time by 83%. "We used to print out a form, fill it out by hand and fax it to each company for a quote, which could take up to an hour," Taylor says. "Now, we create a form on AMS 360, fill it out online, and because AMS 360 interfaces with Microsoft Outlook, we submit to the carriers electronically. The process that took an hour now takes 10 minutes."
Taylor took advantage of the quick quoting process and developed a contest with underwriters to see how fast they could complete an application. "With one of our underwriters, we put an application together in seven to nine minutes and sent it over to them. From the standpoint of making sure you have the market blocked, it's unbelievable."
Putting agents in direct contact with underwriters is a powerful tool, according to Weber. "It's almost counterintuitive at first blush; you try to automate a process - get an electronic data stream and aim for straight-through processing. But when an important agent runs aground in the process or has a question, it's nice to switch gears and go to a high-touch model," Weber says, naming e-mail as the method many agents use. "Selectively is key, because if you tell every agent, 'here's your underwriter; call them with any questions,' your underwriter would no longer be underwriting. He'd be fielding a fire drill."
Though there are a few carrier portals and systems that are difficult for Taylor to work with, he will leave his agency management system to work with them.
REAL TIME
Celent research confirms agencies' flexibility - like Taylor - to work outside their agency management systems. "They will go wherever they need in order to find functionality," Weber says. "If you tell a life producer the easiest way to get an application going and the most efficient and fastest way is to go to a proprietary portal, a life agent will go. If you tell the P&C producer, 'we'll take your upload from your agency management system so you do not have to retype an application,' three cheers. But if you tell them 'the agency management system does not capture sufficient data to process the business - you must go to our Web site or enter supplemental forms,' they'll do that too, as long as you make it easy for them and provide the tool that solves the problem."
The carrier has to accept that data stream in a non-proprietary format and convert it to something that's useful internally. The carrier also has to add collectively to that data stream when necessary. "The default should be: 'Take data from my agency management system and when I say yes, apply.' That data flows into the carrier and the process begins, hopefully with a real-time decision if it's a simple enough product," Weber says.
Celent research finds that the key reasons agents use proprietary sites are the accuracy and timeliness of data that applies to issues such as case status. This is logical, to a degree. If you want to find an accurate, up-to-date case status, it makes sense to go directly to the source. Chubb is providing agents and brokers access to commercial account-related loss information around the clock.
"Online business loss runs create an efficient way for Chubb to provide critical information to agents and brokers in a consistent and compliant manner," says Suzanne Witt, VP of commercial strategic marketing, Chubb. "Providing agents and brokers with electronic access to loss run information for commercial and specialty lines of business on an account basis, not just a policy basis, offers a more holistic view of their clients' business."
Authorized agents and brokers can access three- or five-year business loss run reports for all property, casualty and specialty lines, except risk management and surety business, through
"By responding to our agents and brokers No. 1 service request, we have eliminated their need to request loss information from Chubb's staff," says Witt. "This online tool is an integral component of our expanding e-commerce capabilities, which seek to streamline the business process for our customers, agents and brokers."
The emergence of Web services to deliver this and other information in near real time via a variety of communication tools gives agents an opportunity to work even more efficiently. "Agents using Real Time (a technology-based workflow and interface) find that their staff spends its time handling current clients more efficiently, offering them more time to dedicate to sales and reaching out to new clients," Cal Durland, CPCU, manager of agent relations and AUGIE facilitator for ACORD, said at a November 2008 PIANY/NYIA CEO conference. "Agencies that have current technologies also have an easier time attracting new employees."
IVANS, a Stamford, Conn.-based provider of corporate connectivity solutions and services, has seen carriers continue to add agents to their download programs in an effort to drive more business. The solution provider has seen transaction volume grow by more than 500,000 transactions year over year, accounting for 20.6% growth. The real-time transaction with the most significant growth is the endorsement bridge. From January 2008 to October 2008, three new carriers added support for endorsements via IVANS Transformation Station, and the number of agents actively using this transaction has grown by 25%. IVANS attributes this increase to more functionality being added into the endorsement bridge, thereby making it a more useful transaction. Agents are able to navigate directly to where they need to be instead of being pushed to a general Web page. As a result, agents are able to complete the endorsement transaction more quickly than before.
Agents consider their business relationships when choosing their preferred method for new business entry, according to Celent. In fact, 25% of agents choose their preferred method for new business entry because carriers with whom they write business tend to prefer this method, while 25% make the decision because it is the least time-consuming method.
Technology is just one factor in creating a working successful relationship between carriers and agencies. Chubb makes an effort to understand how their agents work for a living - in terms of the systems they use, their common day-to-day work flows, how they work with other carriers, etc., according to Yacik. "Successful technology isn't really about the technology, per se. It's about people successfully using the technology to get their work done more accurately and more efficiently."
FEEDBACK
Feedback is a way to understand the wants and needs of agents. "We continually ask our agents for feedback about the systems we make available to them - through our field marketing representatives, through agency surveys, through agent calls to our help desk and through face-to-face visits with a variety of different agencies," says Steve Yacik, e-Business Manager of Chubb Group of Insurance Cos., Warren, N.J. "That feedback drives how we prioritize what we work on, and how we assess the degree to which what we implement is successful."
Another carrier relying on agency feedback is Los Angeles-based Farmers Insurance. About three years ago, Farmers began developing three locations - and just opened a third location-called ServicePoint for its agents. "We originally had service locations at nine different places spread out across the United States, and they weren't very technologically savvy or updated," says Debra Lechner, assistant VP of customer insight services. "Now, we have state-of-the-art telephony and CRM technology, so the service representatives have 'know me' technology when the agents call in." The service reps can see the agent's book of business, and they can help to track requests.
"There was a huge effort of consolidating agent data into a Siebel platform," Lechner continues. "Pulling the data out of legacy systems and putting it into a much more updated platform has been tremendous in helping the service center know what transactions are happening, how many agents are calling, which agents are calling the most or least often, etc."
In addition to meeting the intended objective of improved customer service for its 17,000 agents, Farmers attributes a number of additional positive outcomes to a surveying program developed with the help of software from Norway-based Confirmit. On a nightly basis, Lechner's group takes a random sample of all of the phone calls that came into the three locations. Her team pulls a random sample of those phone calls and sends a 10-question e-mail survey to the agents the next morning, asking them to rate the service. "We've put in a closed-loop feedback, so as soon as an agent completes the survey, if they have indicated a poor score on any of the questions, the manager at that location receives an e-mail that they need to look into the survey and then determine what to do next," she says. "And on the opposite, if the agent answers all highest scores on all of the questions, the manager is contacted to give praise to the service representative."
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