1. Getting IT and business operations on the same page.

AAMGA's automation conference focused on leveraging IT and business operations so insurance professionals can better collaborate internally, and externally with their markets and other customers. This is one major challenge still facing agencies' and companies' automation efforts of internal operations. Technology cannot exist only in the purview of the IT department; companies must involve the business side of operations in the IT process for it to be effective. “All insurance companies, reinsurers, intermediaries and agents/brokers, program managers, need to be focused on how to leverage IT to solve business problems and to do that companies need to have the business side engaged in the IT process,” explains Jason Brooks, vice chair of the AAMGA Automation & Technology Committee.

2. Diverse industry leads to automation “silos.”

There is a great deal of opportunity in insurance technology—today, everything from invoicing to social media postings can be automated. “Take a look at major vendor software products within our industry. There are a number of good solutions to manage the requirements of various insurance products and producing quote proposals from system defined parameters as well as workflow products that help route work from one role to another within the organization,” says Scott Montney, chair of the AAMGA Automation & Technology Committee.

Although this may seem like progress, most automation solutions take each operation as a separate silo rather than an integrated part of a whole. “They work well in and of themselves, but the data involved must be rekeyed into each system,” Montney says. As a result, the promised streamlined workflows can fail to live up to their billing. Not only does this create more work for insurance wholesalers and their retail producers, it creates a situation where automation can actually lead to increased human error as data is entered and reentered in these diverse systems.

3. Integrating wholesale agency and carrier systems.

Vendors at the conference told us that integrating systems among players in the insurance industry is a major area of current automation advances. “Some vendors act as mostly development consultants—touting that they can help agencies and companies integrate third party solutions,” Brooks says. “We are also now seeing the vendors who own and maintain those third party solutions beginning to focus more on opening their systems up to integration.”

Montney adds, “As more wholesale insurance professionals and carriers successfully integrate their preferred platforms in such a manner—system-to-system—each wholesaler will be able to devote more of their resources to their interactions with their customer base and foster similar integration on that side.”

4. Standardization of data.

Although there has been progress in standardization of how information is delivered and received, the data itself can pose problems for comparison. Data standardization is key to integrating systems and allowing more seamless automation, Montney says. “One of the major challenges is effectively dealing with the sharing of information in the major life cycle events of an insurance policy—say, quoting and issuing a policy,” he says. “To answer these questions now, wholesalers are often required to look up the same information several times within each given carrier's solution, most often a web-based portal site.”

However, Brooks believes vendors and insurance organizations are rising to the challenge. “I think we are going to continue to see a trend of agencies and companies integrating to the point where data that is first entered by a retail agent is passed along in real time to their general agency and on to the [insurance] company,” he says.

Standardization is a particular problem and opportunity for the E&S industry. “As the E&S world continues to adopt standards-based data exchanges, like ACORD XML web services, the IT units implementing various projects will have an easier time of the technical aspects, so there is an opportunity for the organization to focus more creatively on how they can benefit from these technical projects,” says Montney.

5. Scaling automation for companies of all sizes.

AAMGA membership includes MGAs and wholesalers of all sizes, all of which have had very different experiences with automation. Customers are looking for easy and instant comparative rating tools as a resource for professional underwriting. However, the process of quoting and responding to a customer quickly is a challenge for everyone. To accomplish this, you either need a lot of people or the right technology—and it's expensive, regardless of the solution. However, technology is increasingly helping companies keep up with the competition and with customer demand.

The insurance industry's IT challenges have less to do with identifying a single solution than they do with recognizing that the industry is undergoing remarkable change, notes Joseph Valenza, moderator of AMS of “The Future” session at the conference. “It's about being aware change is upon us, and if we acknowledge that, we will all be better prepared for what comes,” says Valenza.

Our industry continues to look at “challenges” as “opportunities.” By merging the needs of all parties aligned in the insurance transaction, we can be uniquely positioned to utilize automation as a driver of efficiencies, profitability and economies of scale.