Imagine this: two separate kingdoms, the Kingdom of P&C Insurers and the Kingdom of Agencies and Brokers. Within each kingdom, each insurer and agency is represented by its own little house, and every little house has a door. Each door can open both ways and represents a way to communicate and share data – and these kingdoms need to share lots of data.
In the Kingdoms of P&C Insurers and Agencies and Brokers the only way to communicate and send data between the kingdom’s houses is to build deep trenches between the two kingdoms. Building a trench is difficult, expensive, and time consuming. And, in these kingdoms, it needs to be done for every line of business and every transaction. If a P&C Insurer wants to pass data with an Agency or Broker, the Insurer must dig the trench to the Agent or Broker Kingdom, and then knock on every Agency’s and Broker’s door to see if they will open it.
In the world I have described, insurers are very busy building these trenches to the Agencies and Brokers. They spend a great deal of time, money, and resources on the various trenches. When the insurers finally get to the other side, they start knocking on all the doors – after having spent all that time, money, and resources to reach them. They find that some agencies have their doors wide open and are ready; some will open their doors eventually; others won’t and have no desire to ever open their doors. What’s more, they are many Agency houses who want their insurers to build the trench to them, but there are still many insurers that won’t fund the trench digging, so the agencies are left without the trench. For these two Kingdoms, the system is an imperfect one, and is certainly not built for success.
What I just described in a quick analogy is the reality of the download between insurers and agencies today. They have to share data and information for policy, billing, and claims. But the cost, risk, and pay back are deterrents and even the priority is not always there. The formalities and costs to share data are what I described as trenches. Missing or incomplete “trenches” result in missed opportunities, inefficiencies, misinformation, and misunderstandings. For example, what an insurer might view as a small book of business not worth investment might be a huge book for some agencies. Sometimes, the lack of understanding between the two “kingdoms” can be astounding.
But what is amazing about this situation is that we continue to go down this path, just as we have for many, many years. Although percentages have grown in both the personal and commercial markets with the support, guidance, and education of ACT, Big I, Applied/IVANS, and other advocates, there is still such a long way to go.
So, we have a choice – and an opportunity to rethink the paradox we are in. This is where innovation can play a critical role. Two of the key tools of innovation can bridge the gap that exists in the download between insurers and agents: actual ideation and crowdsourcing. These may sound like innovation buzz words, but they are critical tools for improving communication gaps and reducing inefficiencies. By allowing varied groups to have a voice in solving challenges, ideation and crowdsourcing can allow decision makers the ability to see data trends across segments of organizations. More importantly, ideation and crowd sourcing can also offer solutions to challenges for little to no investment through the ideas of people that wouldn’t necessarily have “a seat at the table.”
We know what we hear from agents: as we described in the “two kingdoms,” sometimes there are agent houses with no trenches even being built to them. We also know that insurers sometimes find that even after all the work of establishing trenches, some agents keep their doors closed. Utilizing innovation tools to communicate these pain points and search for a better method of business is a great step forward.
But, what can insurers do right now to solve the challenge of the two kingdoms?
In the short term, insurers can demand all leading vendors of Agency Management Systems and Policy Admin, Billing, and Claims Management Systems to have adapters built in and ready for plug and play for all lines of business and transactions. This would improve implementation time, reduce investments, and essentially remove the “closed doors” problem facing insurers.
In the long term, invest in ideation and crowdsourcing to rethink, reimagine, and redesign the connectivity avenues between insurers and agencies. Listen to the pain points and notice trends. Crowdsourcing will offer powerful data to build a better system. Start posing questions to your own organization like, “How do we leverage the cloud and Big Data concept to rethink the 40-year-old point to point integrations…?”
You’ll be surprised at the results and how meaningful making small changes can be. Let’s do it.
This blog entry has been republished with permission from SMA.
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The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.
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