Bill Kenney is CIO of Colony Insurance Group, a member of the Argonaut Groupan E&S insurer working with MGAs, half of which have binding authority. Like most insurers, Colony needed to find a way to send copies of its policies to the MGAs, and to keep them up to date on loss runs and claims. Colonys solution was to use its Web site, to give the MGAs access to the important data they need. Policies are now sent by e-mail to the MGAs offices. They love it, Kenney said, although he added, Except for a few who still like to print everything out. They come back to us and say, Why dont you just send us a print copy?

Those people are living in the past. One of the reasons is that insurance agents, TPAs, and the carriers are savvier than they used to beand less willing to wait for things. The whole industry is getting more sophisticated, Kenney agreed.

Colony likes the electronic version of its policies. It used to send out four or five copies of a 45-page policy to the MGAs via the U.S. Mail. You send out 20 or 30 of those a day, and the postage expense piles up, Kenney said. The company doesnt have absolute faith in the e-mail system, though. For each policy file it sends out, it also sends a fax to the broker to make sure the e-mail came through. Convoluted? Maybe. But still faster and less expensive than the old way. It doesnt make much sense to send another e-mail asking them if they got the previous e-mail, Kenney said. The dollar savings on postage are obvious, but the other benefits will likely add up to more for Colony. The biggest key is the service aspect, Kenney said. The MGA gets the policy the same day we issue it.

Colony takes certain steps to address issues of security. We dont send out any e-mail that is unauthorized, Kenny explained. We dont attach more than one policy per e-mail, either, even if we have several policies going to the same MGA that day. Each message is sent via a password-protected .ZIP file. While there are concerns about e-mail security, Kenney said that the current system seems to work OK. (Most built-in password systems are notoriously easy to crack with software like Passware at www.lostpassword.com.) Colony is currently testing PGP and its Outlook plug-in as a significantly more secure alternative.

Kenney knows better than to be completely satisfied with any communication tool. Hes working on a secure site for each MGA on the Colony Web site. There are pluses and minuses to this, though. Instead of us dragging it out to [the MGAs], they have to come to our site to get the information, he said. Not surprisingly, Kenney feels this would be easier for his staff, while the MGAs he deals with think that is one more task for them that the carrier should supply.

Agents who go to the site can find their monthly sales figures in a private folder. (Colony intends to put loss runs in those folders as well, but thats in the beta testing phase.) They can keep track of their customers claims, a process that used to require a phone call. Kenney said the company used to receive phone calls on claims all day long, so it decided to abandon that practice. We dont take any phone calls on claims now, he said. Such a drastic change caused some hard feelings among the MGAs, but Colony is happy with the results.

Share and Share Alike

Ron Young is general manager of software vendor Siebel, coming to the company after 20 years with Nationwide. Siebel was looking to develop applications for specific industries and its sales force automation tool was a key component.

Young knows from his days with Nationwide that not all insurers communicate the same way with their agents. Nationwide employs a captive force, while others use independent agents. The difference is critical when a company decides how much data to provide those agents. Captive agents, selling only one companys products, will naturally get more access to the database to track leads and to find more cross- or up-selling opportunities. Independent agents, on the other hand, need to be kept more at arms length, data-wisetheyre less likely to get the type of sales tips that the captive agent would receive.

Of course this goes both ways as well: The independents dont provide as much information to the carrier, either, Young said. For example, they rarely provide a detailed profile of the customer, information for tracking the household, or data for a needs analysis. An independent agent would pretty much keep that to himself, Young said.

From Youngs perspective, its the carriers that benefit most from sharing data. Until the data are gathered, all an insurance company really knows about its customers are their names, addresses, and policy numbers. The agent becomes the source of customer-centric data, he said. [Agents] know what a customer is interested in and what hes not interested in. Carriers just dont have that information.

Where should a carrier start? First off, dont just give a pile of technology to an agent and expect smooth sailing. You need to implement a solution over time, he said. The worst thing to do is to drop all that technology into their laps.

The key is to make the exchange of information comfortable. You want to enrich their job with technology, not make it harder, Young said. Give them something of value, he saidleads, business analysis, campaigns within the agency, products to cross-sell.

Ron Young believes most of the concerns about the security of data come from the agent side. And they arent worried about hackers. They worry that another agent may glean that information, he said. Carriers have to work hard to make sure that doesnt happen.

Security is important in sharing claims data as well, particularly with an independent agent who may have more loyalty to the customer than the carrier. Agents dont need all the information that goes into a claims file, he said. Access to the status of claims is important from a customer service aspect, but knowing, for example, how much a carrier is willing to pay for a claim can be tempting to an agent who often serves as an advisor to the client.

As for the claims staff, Young believes carriers need to focus on tools that can make their jobs easier and less harried. That might include automated follow-up correspondence or a system that allows claims reps to enter and make payments. If it doesnt have value for the users, it will get less acceptance, he said.

Communication Skills

Paul Young (no relation) said the value in communication is all about getting information to the agent. As strategic initiatives manager for service industries with SAP, hes heard plenty of horror stories about lapses in communication. Many of those come when the customer communicates with the carrier via a call center or the Internet, but the agent is left out of the loop. Customers make changes in their coverage and the agent doesnt even know about it, he explained.

Carriers reap the benefits of good communication in two areas, Young said: agents and claims. With agents, you have to make it easy to do business with them, Young said. Many of the insurance products have become commoditized, so its not about costs, but making agents want to work with your company.

Agents dont need to know every detail about every customer, but Paul said that agents do need to communicate with the carrier about the data they would like to receive on specific customers. That is the message we hear, he said. Things happen to the customer and their agent isnt aware of them. Young agrees that the communication between independent agents and carriers is limited by the carriers desire to hold back a little data for themselves. They want to share, but not over share, he said.

As for the claims corps, unless theyre mobile-enabled, they need to return to the office to find out what other departments are doing with the claims theyve submitted. Customers will be asking them. They need information that will allow them to respond to needs quickly, Young said. He pointed to a study done last year by Forrester Research that reported the average length of an automobile claim was 22 daysand that 14 of those days were virtually wasted with nothing being done. The ability to communicate among all sides can cut that number of days down drastically, he said. One way to do that is by giving claims reps the ability to connect to the home office when theyre on the road, either with or without wires. If the claim is only on the desktop, you cant achieve all thats needed, Young said.

Helping Them Adjust

Mitchell International is an industry leader in the area of claims technology, so its not surprising that Steve Ramirez, the companys senior director of market planning for e-business, describes the handling of claims as a very complex process. As costs are rising, companies are constantly looking for ways to reduce expenses; claims is obviously the place to go.

A look at the old fashioned way claims were handled (or, in some cases, are still being handled) illustrates the inefficiencies that mobile communications can solve:

A claims rep would drive to her office, pick up her assignments, drive to the sites, do what she needed to do, and return to the office. The process seems almost quaint in 2002. According to Ramirez, wireless applications allow an agent to get her assignments before leaving home, drive to the site, and enter appraisal and any documentation into an application that send the information (wirelessly) to the claims folder on the system at the home office. Once one assignment is done, she can look for her next one without wasting time in the car.

Wireless connections allow appraisers to up their productivity by an average of one to one-and-a-half appraisals per day, according to Ramirez. Thats significant when theyre daily count is four or fiveits an increase of 20 to 25 percent. That difference can mean a huge savings in labor over the course of a year. As Ramirez put it, the elimination of a single appraiser position can amount to $85,000 to $90,000 a year when you factor in salary, taxes, benefits, and expenses. Even disregarding the labor issue, Real time access to a claims status just makes good business sense.

Connecting to external users is not a problem that all industries face, but is certainly the backbone of insurance. How well data are exchanged between agents and carriers, claims adjusters and carriers, and whoever else is out there looking to communicate with you is the difference between success and failure. Some carriers do it better than others. Youll know who they are by the improvements youll see in their annual reports and by the number of agents and adjusters looking to do business with them.

Inspire: www.nspr.com

Mitchell International: www.mitchell.com

SAP: www.mysap.com

Siebel: www.siebel.com