Sounding Line believes that agents can re-intermediate themselves through strategic use of their Web sites, in particular by providing customer self-service functionality. We call this strategy "out-facing" services. idNET, a Simsbury, CT vendor, is actually doing something about out-facing services. The vendor helps agencies provide customer self-service through their Web sites by extracting data from the agencies' management systems, hosting it on idNET servers, and then making it available to the agencies' customers.
But idNET goes further. The vendor provides 24x7 call center services as well. The call center, Web site, and in-agency technology is connected together, creating a three-channel access system - exactly what smart captive sales-force carriers are beginning to do and other industries are leading consumers to expect.
idNET philosophy
When it comes to marketing, sales, and service, which brands are more important - those of individual independent agencies or those of carriers? idNET believes the answer is obvious - agency brands. (For a white paper titled "Agency Branded 24/7 Service for Independent Insurance Agents" see www.goidnet.com, the "Articles" section, then "What Is 24x7 service?") Though some carriers would like to believe otherwise, personal and commercial lines consumers always know who their agency is, but often don't pay much attention to where the policies come from.
Why should they? It's not material. The agent helps the consumer understand his needs and alternatives and then makes a recommendation. If there is a claim later on, the agent is there to advocate for the customer and ultimately take the blame if he didn't recommend the right coverage. The agent remains a constant even as carriers go hot and cold in a market or seem to retaliate by dropping coverage when a policyholder has a claim. The customer comes to depend on the agent over time.
Carrier call centers and Web sites, direct bill, and other carrier-based innovations, while seductively attractive on the surface, muddy the agent's brand. The customer becomes confused, has too many variables to remember, and comes to doubt the very concept of an agent as key intermediary.
Some carriers may believe they can create a brand that is stronger that the agent's - and perhaps even sell direct through the Internet. Calculations on the back on an envelope can show the position to be untenable. There are too many companies in competition and branding is incredibly expensive. The only parties likely to profit from the effort would be the consultants, ad agencies, and technology providers - the very people who strongly encourage carriers to pursue this bankrupt strategy.
It should be obvious to anyone who spends some time thinking about it that the agency brand is important and carriers should do what they can to strengthen it, not weaken it. Agents need strong brands to compete with other agents and create consumer confidence.
idNET intends to help agencies strengthen their brands through the use of Internet technology and outsourced services. They believe that agencies that successfully use their services will be perceived as offering more value, and that those agencies will draw more business and retain it longer.
Building and maintaining the online database
The idNET technical strategy is to create an online database of customer, policy, and claim information and then make that information available to agency customers. Another way of providing information through the Internet is to extend an agency's management system and allow customers have access to it. idNET thinks that's a mistake.
idNET has found that many agencies simply don't want to be responsible for hosting a 24x7 Web service for their customers. They don't want to be an ASP. They have enough to worry about already. Other agents worry about exposing their systems to the outside world. They simply don't want them connected to the Internet. Perhaps that attitude is unreasonably cautious, but the press is full of stories about security breaches, data destruction and theft, and other Internet nightmares. In idNET's view, why not make a copy of some parts of the system and let someone else host the copy, keeping the primary system safe from harm?
idNET also points out that from time to time agents change management systems, e.g., part of a merger or acquisition process. It's hard enough to retrain the agency staff on the new system. What would it be like to train the agency's customers on the new system as well? Better to have the online service system separate from the agency system so that the agency system can be swapped out without the online customer knowing the difference.
idNET can extract data from Applied's WinTam and from AMS' Sagitta, AfW, and Prime systems. Even for a larger agency, the initial extraction process doesn't take long (less than an hour) though the process may create a file too large to conveniently send over the Internet. In that case, the agency can put the file on a CD ROM and ship it to the vendor.
Once the initial file is established, it is refreshed on a schedule established by the agency - usually daily. Automatically each day, idNET software on the agency system performs a search of the agency database for new or changed customers and policies and makes copies of each into a change file. The change file creation process can run even while the management system is in use and doesn't take long.
The change file is then encrypted and compressed, attached to an e-mail, and sent to the idNET data center, where it is used to update the idNET server. Daily change files are relatively small and can usually be transmitted in less than a minute. The vendor's daily agent database update process often takes less than a minute. During that time the database is not available to the agency's customers. Overall the extraction and update process is unobtrusive and undemanding of agency technology.
The call center
The agency's data can then be made available to the agency's customers. But because it is hosted on the Internet, it can also be made available to an outsource call center. And that makes the possibility of providing 24x7 call center services practical. Agencies that subscribe to the CSR24 service get one hour of outsource call center services free each month. If call volume exceeds an hour, the agency is billed in one-minute increments for overage
Typically, an agency using CSR24 programs its telephone system to provide an after-hours-service menu choice. The menu choice forwards the incoming call through a unique 800 number to the call center. The call center CSR can identify the agency source for the call and then switch to the appropriate agency database while picking up the call. The CSR uses the appropriate search function to call up the customer's record.
During the system setup process, idNET and the agency create (or edit) scripts appropriate to each call center screen. During the dialog with the customer, the CSR can see both the relevant data and agency-approved script. The setup process also identifies the e-mail contact at the agency appropriate to a particular customer or transaction type, and service requests are then automatically sent to that address.
The CSR handles the call, and, as a byproduct, creates a confirming e-mail (or FAX) to the customer as well as an e-mail to the appropriate agency staff member who is to complete the transaction during normal business hours. Once the e-mail is sent, it's up to the agency to complete the transaction. The idNET system has no knowledge about what happens to the request once it's be sent.
Agents considering third-party call centers are often concerned about potential liability resulting from call center mistakes. What happens if the idNET service is defective in some way that leads to an E&O claim against the agency? idNET accepts E&O responsibility - a smart move - since many agencies wouldn't consider the service without that protection.
At the moment, idNET call center CSRs are not licensed insurance professionals. They cannot/will not sell insurance or make any recommendations or take actions beyond those described in the relevant agency script.
idNET statistics suggest that of every 100 CSR24 transactions, about 65% will come to the call center and are generally requests for information. The remainder goes to the agency Web site and are self-service entry transactions. Though it's too early to quantify how and whether CSR24 reduces the in-agency workload, initial returns from larger agencies seem to show a reduction.
The agency Web site
On entry to the customer service portion of the agency Web site, customers must key in their ID and password. Like the call center CSR, they can now see general information and a list of policies. Customers have a limited though useful set of available functions.
CSR24 on-line functionality includes the ability to view or request response for policies (including certain schedules), policy changes, MVRS, certificate holders, medical malpractice, certificates, auto Ids and first notice of loss, quoting, bonds, employee benefits, financial services, and free-form requests for information. Currently the service doesn't support access to billing and payment information or the paying of premium. In part that's the result of the information being unavailable or not current in the agency system - because the carrier does the billing and cash receipts.
idNET has approached a number of carriers about linking into the carriers' billing systems. The customer would be able to click on a link for a specific policy to see it's billing status. Security would be handled in the background and the customer would not have to login to the carrier site. Though the customer would now be on the carrier's site and identified, the top of the page would continue to show agency branding information so the customer would continue to associate the activity with the agency. Carriers have shown some willingness to allow access but aren't ready to address the situation before 2002.
When the customer wants to request a policy change, for instance, that's done through e-mail to the person in the agency assigned to the specific account, policy, or transaction type - basically in the same way the call center CSR communicates with the agency.
Handling incoming e-mails as sources of information for initiating policy changes isn't ideal. It would be better were the data to come to the agency appropriately formatted for a specific transaction type, with the CSR able to review and then post the transaction with a single mouse-click. It should not be necessary to key anything unless the incoming information was inadequate in some way, though that should generally be prevented by edits during the self-service dialog.
Besides a single-click approval procedure, idNET interaction with the agency system could be improved by integrating incoming transactions into the management system's suspense system. Besides the value of a single, comprehensive queue, this kind of integration would also make it easier for agency management to monitor agency practices, see the effect of customer call center and Web access activity, and compare it with traditional channels.
Without cooperation from the management system vendor, idNET cannot create the kind of integration described above, so the organization has approached vendors and, of this writing, has made arrangements with a major vendor to integrate, perhaps by late this year. That's a positive development because it makes possible an environment that isn't just more convenient for the customer, but can also save the agency some clerical effort.
In order to accommodate its agency customers, idNET has built a number of customizing features into its service. Subscribing agents can turn them off or on via software "toggle switches." And, of course, each agency can control which functionality and data is available to which of its customers
Besides providing functionality and hosting for certain kinds of self-service, idNET can handle an agent's entire Web site from template-based design to substantial amounts of custom work.
Though I haven't discussed it here, idNET Web building services include the potential of including community links, weather, news, and advertising; thus, an agency site can act as a mini-portal for agency customers. We'll cover this concept in other articles. I'm skeptical that the effort is worthwhile and it may even turn customers off.
The vendor has also been experimenting with something it calls FireChat, an agency Website feature that can allow customers to interact with the agency staff during normal business hours from the agency Web site.
Getting the word out
According to Richard Roy, idNET CEO, many agents don't yet understand the importance of 24x7 service and its value for branding. He also points out that simply having a Web site with self-service features isn't enough to really provide 24x7 service. A call center is needed as well. As pointed out above, at least two-thirds of the after-hours activity that flows through idNET goes to the call center - so it's a critical element.
Though idNET provides both hosting and call center services, it's also willing to license its software. A number of large customers are doing their own hosting and providing their own call centers, using the idNET software.
Another issue Roy sees is a general immaturity in the industry in knowing how to take advantage of and integrate Web and call center activity into the ongoing life of the agency. The situation is a bit like the period 15 or 20 years ago when agencies had a hard time using their management systems effectively. In the interim, much has been learned about management systems and best practices are now pretty well understood. The same thing will happen over time with Web sites and call centers.
From my point of view, idNET is clearly on the right track. It understands the benefits of out-facing services and will help agents provide them. Over the next few years Web site self-service and call center outsourcing will become commonplace and integrated elements of agency operation - to the benefit of both the agency and its customers. And, as Roy points out, the process will significantly strengthen the agency's brand - just in time. For more information, go to www.goidnet.com.
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