So what do agencies need? That depends on the agency.

So what does a specific agency need? That depends on whom you ask in the agency. And that depends on the product and insurer mix and so on.

The fact is that agencies and insurers do not control their technology universe. This means that no matter how forward thinking, what they do will be influenced in large part by what they cannot control. What they do is driven as much by their competitors decisions as their own.

Decisions made by one insurer will impact the success of decisions made by another. Implementing a technology solution in an agency is influenced by what another insurer is doing in that same agency. And good solutions often get ignored as a result of the mix of insurers in the agency, not because it was a bad solution in itself. One insurers high-tech success may be another insurers bane.

Of course, decisions made by one agency will also impact decisions made by another agency, and agency tech decisions influence what insurers actually do in the marketplace (some think).

But some agencies embrace proprietary insurer technology for a variety of business reasons. That encourages the insurer to roll out the same technology to other agencies, who represent a different mix of insurers and where that solution results in havoc.

It reminds me of the time that an agent expressed concern to me about proprietary systems in our business, yet turned to the insurer CEO standing next to me and praised his recently released, albeit proprietary Internet solution. Go figure!

Meanwhile, some agencies feel locked in by their vendors decisions, and the vendors say they are affected by decisions of their customers. And so it goes.

It seems that people try to explain the world in terms of simple cause and effect relationships. You do that and I will do this. But its more complicated.

I was watching the Discovery Channel the other day about climate and weather. They demonstrated how the melting of polar ice decreased the salinity of ocean water, creating tubes of heavy water that changed the ocean conveyor belt (flow of currents), shifting evaporation rates that influenced temperature, that changed global weather patterns, that in turn affect the ice caps.

That's a complex series of relationships, but not much different than the tangle of interdependencies we face as an industry looking for a way to reinvent itself.

There is no single solution. But all the solutions being created must allow us to work within such an inter-dependent world.

We have a mixed bag of technology solutions today for many reasons–some we know about and others are more like the invisible ocean flows. But no matter how complex and inter-woven the technology landscape might become, what developers build and what businesses do will always depend on a combination of interdependent factors.

Having said that, there are a few guiding principles that we can all embrace on this journey:

First and foremost, we need to support and implement the industry data standards provided by ACORD. If we receive any criticism from our members, its that were not moving fast enough, not that were not moving in the right direction.

Second, we need to encourage insurers and vendors to integrate the standards in their software because they become the building blocks (and provide the flexibility) for the mass customization that we need.

(I hesitate to use the word “glue” as a metaphor to describe standards, since standards actually provide the flexibility to connect and disconnect–couple and uncouple–components and data streams as your business requirements change.)

Lastly, we need to improve our understanding of what works and what does not work in our business. We have great examples of both. On that score, the agency user groups and their insurer partners have completed a survey that might open constructive dialogue on how insurers spend money on software development in the future.

Today, your end game might not be the same as everyone else's and your roadmap is probably different as well. But have no doubts that your decisions and your ultimate success will depend on what others will do. At the same time, knowing what others do, working in cooperation and collaboration does offset the vagaries of a turbulent marketplace.

I encourage you to gather useful information by getting involved in industry initiatives like the Agents Council for Technology (set up by the Independent Insurance Agents of America in Alexandria, Va.), the national agency management system user groups' AUGIE project (the ACORD-User Groups Information Exchange), and the ACORD Standards Program.

Gregory A. Maciag is president and chief executive officer of ACORD, the non-profit industry standards association based in Pearl River, N.Y., with offices in Belgium and the United Kingdom.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, February 18, 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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