AUGIE Proves Agents Case

We agents and our staffs individually have felt the pain about technology and workflow for decades, and now for the first time we have collective proof that were all in the same boat.

That proof comes in the form of the most comprehensive study of agents and technology ever undertakenrecently completed by the ACORD User Group Information Exchange (AUGIE). Lets take a look at some of the findings of the survey of some 9,000 agencies.

Duplicate entry and proprietary systems are significant barriers to workflow and interface.

As the growth in proprietary carrier systems or vendor and third-party solutions increases and the realities of multiple data entry come into play, an agencys cost for training and education becomes prohibitive.

Broadband access to Internet is more widely used than expectedcarriers and vendors must build systems accordingly.

Agents and carriers alike need to keep abreast of technology. Carriers need to better educate their field reps on technology issues and what upload and download means, the impact it has on agents, and what the carriers capabilities are.

Carriers need to understand a simple and inescapable fact: Your agents are your sales force. If theyre frustrated or slowed down by inefficient workflow, you will not get as much premium volume.

To be sure, carriers have been investing in proprietary systems and Web interfaces for agents. Many agents view this as a positive step, although certainly not a means to an end. Carriers shouldnt think when they hear, “We love your Web site!” that their jobs are complete. And they shouldnt think download equals single entry, multiple-company interface, or SEMCI. It does not.

While carriers obviously tend to look at the world from their point of view, they need to get around 180 degrees to the other side of the table with their business partners and look at business from the independent agents perspective.

We agents represent an average of eight carriers each. We agents need to look at entire accounts, not a single piece of business with one company. We agents need to provide comparisons for the consumer. In todays market it is incumbent on agents to look at several alternatives for our insureds. With coverage reductionsand in some cases, coverage eliminationsalternative rates are essential. When you multiply a particular carrier solution by many companies, you can see how inefficient our world has become.

In a recent agency workflow study, ASCnet sought to quantify what it costs in time to deal with various workflows. In several agencies, we looked at business flow for new business and policy service. The survey found that an industry SEMCI solution, called IVANS Transformation Station, took seconds where proprietary Web sites took minutes. For example, for new BOP business rating and issuance, from start to finish CSRs took seven minutes to get three comparative quotes via Transformation Station; it took them 64 minutes via three carrier Web sites.

A billing inquiry, for example, took two minutes via Transformation Station, eight minutes on the phone, and nine minutes on the Internet. Over the course of a day or week in the life of an agency, youre looking at many hours of wasted time in duplicate entry, entering Web sites and training staff. Agents and CSRs need more time to market, sell, service and build relationships.

Moreover, there are also immeasurable costs to agents (and companies), the time study found. These include explaining to the customer why the quote doesnt match the rate, why her name is spelled wrong on the policy, why it took so long to get the policy to her, and why state agencies, lien holders and others are not properly notified.

Meanwhile, the AUGIE survey shows that CSRs and agency principals are apt to take the path of least resistance, e.g., carrier Web sites, and say they prefer that when, in fact, they dont know a better way yet. Thus, we caution carriers to be careful to place individual AUGIE survey questions and answers in their overall context. Do CSRs like proprietary systems? Surethey get back an accurate quote pretty quickly. But in the absence of an alternative, what else are you going to do?

Carriers are hearing, “I like your proprietary site.” The acceptance of this as a temporary solution is not a benediction of the solution. It is merely an affirmation that the current system is an improvement from the old system as carriers move to a SEMCI solution.

We think its fine for companies to develop a Web site and a real-time automation solution. But we ask that they go one step further and invest in their automated agents, who are probably responsible for 80 percent of their business. They should develop that additional pipe to their agents with Transformation Station using ACORD standard XML. Transformation Station provides flexibility to carriers. For example, they can have the unique edits on the company side or on the agency management system side.

Based on what we agents already knew, which is validated in the new AUGIE study, we urge insurance carriers to provide more technology leadership to their staff in the home office, and particularly field offices. That education must go beyond simply what the companys Web site can dothe field staff must have a working knowledge of upload and download and agency workflow.

Carriers, too, should encourage their agency plant to get on board with an agency management system, and keep it updated. Carriers are getting most of their business from agencies with management systems, so why cater to a smaller percentage of agents who make it more expensive to deal with you? Agency management systems have more than 90 percent of the market share, and probably 95 percent of commercial lines premium. Thats billions of premium dollars.

There are thousands of independent agencies equipped for real-time SEMCI using ACORD XML. Applied Systems alone has 80,000 desktops ready with the new technology, representing some $40 billion in premium. We urge companies to get on board. The goal is to put independent agents and their companies in a better position to compete.

Carriers often say theyre concerned about the cost of acquiring new business. Agents, too, have acquisition costs to get new business. Remember that we need to manage the entire account, not just a single piece of business with one company. Agents are spending too much money going after various markets with multiple quoting and keying it not once but two or more times. Were asking companies to pay some of the acquisition cost by investing in Transformation Station. Theyll get it back in spades. For example, 100 percent accurate policy applications are worth a lot. A real-time ratenot a tentative quote, but a ready-for-prime-time rateis worth a lot.

This is a competitive environment. Who wins the business? The company has to be in the competitive price arena, as the AUGIE survey found, but if it offers a straight-through-processing alternative, agents will choose the path of least resistance.

IVANS Transformation Station is the most obvious way for agents and carriers to get to a clean, true, real-time SEMCI workflow. Even those carriers that have invested in proprietary, real-time quoting on the Web site are 90 percent of the way towards Transformation Station, an industry-wide solution.

Peter Anderson ([email protected]) is president of both the Applied Systems Client Network, (ASCnet), and of Marshfield, Mass.-based Anderson Insurance Services Inc.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, July 22, 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.