In addition, independent agencies, who were SEMCI proponents from the start, could soon enjoy presentation-ready proposals automatically delivered from different carriers.

The dispute over whether carriers or agencies should enter data has raged for two decades. For one entering the business before 1980, there was no argument–since only insurers had computers, they had to enter the data once applications were received from agencies.

In the late 1980s, carriers tried to shift this responsibility by giving agencies PC-based rating programs, thus pushing them to enter data. But the benefit of quicker quotes was outweighed by the drawback of multiple data entry. Then the concept of SEMCI was born, and industry executives dreamed of the day that exposure data could be entered only once–at the agency–and then submitted electronically to different insurers.

In the 1990s, SEMCI was discussed in conjunction with the Web explosion and advances in upload. But two primary obstacles stood in the way–divergent databases at agency and carrier offices, and poor data quality in agency databases.

Over the past five years, most of the carrier systems that were developed–primarily featuring Web-based applications–still require agents to enter data already in their database. This aggravates many agencies that for years have tried to get insurance company senior management to understand their frustrations. Some agency principals even instruct their customer service representatives not to submit applications on carrier Web sites, arguing that theyre not getting paid to re-enter data.

In an era when the insurance industry invests billions each year in technology, the primary method of getting data from agency to company databases is still manual re-entry from a piece of paper!

For SEMCI to happen, carriers and agents must see a clear, bottom-line reason to adopt it. And these new technologies might provide the proof. Lets look at how both parties can benefit:

Carriers, often with commercial “hit ratios” below 10 percent, must pass the acquisition costs for the unsuccessful quotes onto that single sale. New small-business account acquisition costs average more than $250, and far more for middle-market segments.

But emerging software applications could enable carriers to customize a list of preferred risks and then automatically receive into their rating systems only those applications that fit these criteria, thereby reducing acquisition costs. Carriers could quote many small risks without underwriter review, using artificial intelligence software applications.

In addition, new applications could allow insurers to review an agencys rollover book electronically, without dispatching a representative for a time-consuming on-site visit. They would receive multiple reports on potential risks, including property exposure, current premium, location, the percentage which fits their underwriting appetite, etc.

Independent agents stand to reap huge gains from these new technologies. Consider that most still operate under the archaic system whereby the CSR prints out applications and either enters them into several insurer rating platforms or faxes them to underwriters, who must input the data before quoting.

Then, once the agency receives quotes, the CSR must manually retype the information into a proposal to be delivered to the client. What a waste of time! Making matters worse, clients expect alternative proposals more often, forcing agencies to secure other quotes whether rates are climbing or falling.

But new software applications could enable the data that already exists in the agency automation system to be automatically extracted (its entered only once!), translated into a format importable by any rating system and returned back to the agency in the form of a presentation-ready proposal.

Some systems automatically search an agencys database for clients renewing within 90 days (prompting the CSR to update relevant data), which is then transmitted to underwriting for quotes–so that the agency receives a proposal 30 to 45 days before expiration.

Among the other features that could benefit agencies:

Automatic extraction of all renewing policies, not just those chosen by CSR.

Automatic interpretation of CSR abbreviations.

Ability for agents to de-select clients, thereby giving agencies more control (and better hit ratios for carriers).

Insurer-defined screens (an appetite list) that can be easily modified.

Less risk of errors and omissions from missed renewals.

With todays emerging technologies, nobody should have to enter data into the insurers rating engine anymore, and everybody–carriers and agencies alike–should say yes to SEMCI. The result will be a higher quality work product delivered more efficiently and with a potential for significant economic gains.

David S. Huff, CPCU, is president of the Berkeley Heights, N.J.-based AgencyForce Services, LLC, an underwriting services firm whose software helps expedite the underwriting process. He can be reached at 888-934-2546, or via e-mail at [email protected].

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, January 14, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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