In his book, Business @ the Speed of Thought, Bill Gates makes the following observation about the implementation of technology: the 1980s were all about quality; the 1990s were about re-engineering; and the 2000s will be about velocity.
In focusing on velocity, Gates describes how quickly the nature of business will change and how quickly the business itself will be transacted. So, here we are at the beginning of a new decade. How will the insurance industry respond?
Current situation
Currently, the role of technology in our industry is rather limited. A typical agency or company has low expectations of its existing technology implementation. Most implementations want technology to 1) connect to the Internet; 2) provide easy and instant access to information; 3) eliminate redundant input into redundant systems; and 4) do it in a cost-effective way.
Achieving these objectives is much easier said than done. Regardless of its accessibility, technology becomes useless if no one can use it. Users want "to push a button" and get an instant answer. Most insurance agency users say they want technology to serve them, but they end up relying on paper nevertheless. Users are unable to keep up with current hardware and software vendor requirements. Furthermore, technology implementations seem to be based on features — features that do work, but don't always or necessarily result in efficiencies. In fact, it sometimes seems that the more technology we implement, the less efficient we become. If the 2000s are about velocity, as Bill Gates proposes, we're in trouble.
So, how do we solve these problems? How can we make technology live up to its promise of increased efficiency resulting in increased profitability?
Small commercial new business workflow
Let's take a look at the typical new business process for small commercial lines business. Carrier rating is available with most carriers online. Comparative rating through third-party vendors is still available, but carriers really want the agency to rate online. Many agencies have abandoned comparative rating because the rates are not accurate. Rating online for each carrier requires the agency staff to be trained and proficient on each carrier system. Here is a typical workflow.
That's a lot of keystrokes. Each carrier system is different — different screens, different passwords, different series of operations, different underwriting criteria. That's a lot of work to get a quote — one the prospect may not even accept.
The multiple carrier challenge
There are a number of challenges associated with automating the new business process. For example, because CSRs must learn how to use different carrier systems, training is a big issue. Each carrier system requires extensive training. In fact, it's not uncommon, as some agencies report, for CSRs to attend three-day training classes to learn how to use a particular carrier system. Multiply that by all the carriers some agencies use, the training issue can quickly become enormous. Of course, a typical CSR needs to know how to use more than just carrier online data entry procedures. There's also the agency management system, the phone system, printers, third-party software, and other technology procedures and operations.
Beyond training, there is also the workflow issue. Each carrier requires a different workflow for each process. Once coverage is bound, processing routine transactions may also be cumbersome. Some carriers require the agency to make changes directly on the carrier system, and, if there is no download, the CSR must enter the change twice. Some carriers require a phone call. Others will only accept the ACORD policy change request. And, on top of that, there are different workflows for renewing, canceling, and reinstating policies and a variety of other activities and procedures to contend with.
Agency commitment to technology
Today's agencies are committed to technology, or, at least, say they are. Most agencies monitor their workload by using reports generated by the agency management system. Other transactions, however, are handled outside the management system and are not recorded, which limits the agency's ability to accurately monitor total workload distribution. Thus, the effectiveness of the technology implementation is compromised, and agencies are often left with an inaccurate picture of how well things are working technology-wise.
So what is the solution? Actually, it's quite simple. Agencies and carriers need to partner with vendors to create and allow for agency-company workflows that work. Single-entry, multi-company interface means more than simply enabling data to flow back and forth between agencies and companies. Workflows need to be established first. Workflows need to streamline business processes. Once the workflows are established, the technology can be developed and implemented to facilitate them. Instead of focusing on delivering features, it's time to start delivering workflows!
Toward a solution
Improving the current system cannot and will not happen overnight. A shift in thinking, operation, and development will need to be made. I suggest the following:
Gathering Information: Information must be gathered online. When the CSR takes a telephone call, entering the information directly into a database must occur. Handwriting it first and then typing it wastes time and introduces another level of potential error. Input can be into the agency management system or via a third-party vendor. It really doesn't matter as long as the CSR can electronically transmit the data.
Quoting: CSRs should be able to transmit underwriting data to multiple carriers electronically. The key here is multiple. There is little benefit to the agency if the input begins on the carrier system only to be repeated again and again on multiple and different carrier systems. Also, carriers should be able to respond electronically. The CSR must be able to bind coverage from the quote and populate the customer service database.
Workflow versus features: Agency management system vendors boast about the many customer service features they offer — activity tracking, submission tracking, form letter integration, diary follow up, applications, and so on. As agency-company workflow initiatives begin to evolve, let's not get too "hung up" on data issues. The agency manages the information, but the data can be stored anywhere. Agents and companies ought to invite vendors into the arena and support vendors who are willing to provide true workflow approaches to agency-company interface. This will mean a shift away from focusing on new features — which may or may not be nice to have — and focusing on workflow first, and then evaluate the feature and integrate it into the workflow so it truly results in increased profitability.
In my opinion, the more vendors we have creating agency-company workflow solutions, the better off the industry will be. Currently, Applied Systems, AMS, and Doris have implemented IVANS Transformation Station, which appears to be a good first step toward creating workflow solutions. But other solutions may also come from other vendors. The vendors that deliver efficient workflow processes — not just more features — will be the one that agencies and companies gravitate toward.
Laura Nettles, a workflow and agency management specialist, heads Nettles Consulting Network. She can be contacted at 404-325-0023 or at lnettles@nettlesconsulting.com.
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