There are now thousands of independent agents and brokers and dozens of carriers conducting new and renewal business as well as policy inquiry transactions in real-time SEMCI. Generally, its taking seconds or minutes rather than hours or days. Theyre putting business on the books at the speed at which you can get your money at an ATM. And theyre beginning to put their carriers on notice if they dont have these new toolsin the future, theyll simply vote with their feet.

The independent agency system is becoming more efficient. With real-time inquiry and policy processing in place, some carriers are noting a decline in phone calls and e-mails, allowing them to retool staff for new areas.

Agents are reporting great results. For example, one agency estimates it makes 20 policy or billing inquiries a day to its carriers. The process used to take an average of seven-to-eight minutes over the phone or at a carrier Web site from the time the customer calls to when the inquiry is completed and the agent hangs up with the client. With real time, it takes just two minutes. That saves the agency 600 hours a yearand thats just on inquiries!

Some agents already are doing real-time SEMCI with a majority of their carriers. That puts obvious pressure on the remaining book of business in the agency.

In the world of SEMCI, independent agents are independent, and companies are independent. Carriers might still build proprietary technology, but thats behind the scenesnot something that impedes workflow, such as a carrier Web site. In the middle between the carrier and the agency is a pipeline thats sharedthe Internet. Also shared is translation software that preserves all the unique company underwriting edits that keep our independent agency system independent.

In addition, because there are necessarily competing forces at playsuch as unique company underwriting editswe need translation tools hanging off the front and back of that pipeline. The agency workflow starts and ends in the agency management system.

Carriers that havent retooled for this modern way of doing business are starting to put their toes in the water. Understandably, theyre tentative. Theyre looking to see if this technology has staying power. But theres another dynamic at play. I think theyre worried about what SEMCI literally means to their businessesnot the tech per se, but their workflow and their ability to compete.

Im discouraged when I hear a carrier say, “Im not sure I want to play in the world of SEMCI.” Some of the fears expressed include:

“My agents will be able to spreadsheet me against other companies.” (Arent they necessarily doing that already as independent agents?)

“My product will be a commodity.” (Some products already are, and some wont ever be. You have to pick your niches where you can compete.)

“Agents will move entire books of business with the click of a mouse.” (Is this all weve been working toward in the 100-plus years of the independent agency system? At a click of a mouse, agents and brokers move entire books of business? I dont think so. Relationships run deeper than that.)

I believe SEMCI will bring us full circle to the old days of London, when people actually had time to talk with each otheragents with customers and agents with underwriters. Edward Lloyd would be pleased.

In the exciting and modern world of SEMCI, carriers compete on price, coverage, terms, conditions, product innovation (remember that?), loss control, risk management, claims service, and service to agents and customer service representatives. Carriers have more time to build relationships instead of pouring time and money into Web sites. Carriers go and actually see clients with the agent. Imagine that! A little more risk management, with agents and companies working together.

To be sure, one of the impacts of SEMCI might be a shakeout of carriers. Not all will make it. But we also could see a wellspring of new insurers that are technologically savvy, just like were seeing growth in young independent agents, start-up firms and “converts” from the captive agent world. The independent agency system is thriving, and we need to take it to the next level of customer service by embracing and implementing real-time SEMCI.

Stu Durland ([email protected]) is vice president and co-owner of Warwick, N.Y.-based Seely & Durland Inc., as well as president of Applied Systems Client Network (ASCnet), the user group of Applied Systems technology based in Altamonte Springs, Fla.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, December 5, 2003. Copyright 2003 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.