Let it be known: Paper files and manual records, no matter how much data they contain, no longer offer insurance agencies competitive advantages.

"Disparate systems of record cannot support a growing digital agency," writes University Park, Ill.-based insurance software company Applied Systems in its e-book, "the Digital Agency: Developing a Digital Transformation Plan," which gives more insight into today's consumer, who is one that asks for on-demand self-service from a computer, tablet or mobile phone.

A digital agency uses modern technology to connect its agents, insurers, policyholders and prospects. The agency is paperless — with automated business operations that support core capabilities — and seamlessly exchanges information and gains data insights through multiple channels.

Below and on the following pages are five pillars that make up a digital agency, according to Applied Systems:

1. The agency management system

This is the center of an agency's digital operations. It manages customer relationships, policy and benefits administration, sales automation, marketing initiatives, document management and financial accounting across multiple lines of businesses. These capabilities help identify cross-sell opportunities.

A truly digital agency management system (AMS) is built upon scalable architecture, so that the agency can add new customers and lines of business. It also integrates with third-party applications, proprietary systems and other data sources for a single view of the business. An AMS needs to provide end-to-end communications with carrier partners.

Related: 11 signs it's time for a new agency management system

(Photo: Shutterstock)

2. Data analytics

Collecting data is not a problem for agents and brokers. The challenge is that it's difficult to handle. A true data analytics system is able to offer a point-in-time snapshot of multiple business metrics.

Applied Systems sources a Bain & Co. report that says data analytics enables companies to make decisions five times faster than their peers, and perform in the top 25% within their industries.

Data analytics allows an agency to transform data within the AMS for visual insights that drive business performance, including in the areas of patterns, market trends and customer preferences.

Related: Applied PerformanceManagement drills down data for agents, brokers

(Photo: iStock)

3. Insurer connectivity

Communicating and exchanging data securely and without interruptions from insurer systems to their agency partners is necessary for the current, accurate quotes, market appetite search, underwriting, billing and customer service.

Whether through download or real-time, insurer connectivity is critical to accessing products and programs for agency clients and for delivering an enhanced customer experience. Download is a data exchange where insurers automate delivery of infomraton to agencies. Real-time connectivity allows rating software to delivers accurate quotes. Applied Systems says that nearly 70% of agents surveyed in a recent Ivans Insurance report say that the availability of download capabilities to be very important when selecting insurers to do business with.

Automated insurer connectivity also reduces time spent on administrative tasks, such as looking up quotes through multiple websites. 

Related: 8 tech trends that will change how carriers do business

(Photo: Shutterstock)

4. Mobile offerings

Mobility is no longer an option — it's a requirement. Digital agencies can leverage mobility to provide consumers 24/7 access to insurance information from any device. When an agent is working remotely, mobile technology provides access to the AMS, allowing the producer to provide customer service and keep operations running smoothly. 

Mobility has consumer benefits as well. Clients want to access quoting and purchasing tools and view insurance information on their mobile devices. According to Applied Systems, millennial and generation Z consumers say mobile access to information and online services is important when choosing an insurance provider.

Related: Meet the up-and-coming generation Z 

(Photo: iStock)

5. Cloud-based solutions

Digital agencies can move core software applications to offsite data centers for improved performance, flexibility and security, Applied Systems says. With local, on-site servers, agencies risk cyber threats or natural disasters destroying company data and creating downtime. Additionally, manual software updates require time, money and IT resources.

Cloud adoption is expected to rapidly grow throughout the industry, as companies move their software to the cloud. Other advantages include growth opportunities and scalability.

Related: Cloudy with a chance of data