Penn National Insurance, a mutual company that sells personal and commercial lines insurance through 1,200 independent agents, writes business in PA, MD, NJ, VA, NC, TN, and AL (as well as DE and SC for commercial lines). Founded in 1919 out of the efforts of the Pennsylvania Threshermen's and Farmers' Protective Association, last year the company wrote about $500M in premium. Headquartered in Harrisburg, PA, Penn National has created a progressive vision for its use of the Internet, has implemented a substantial part of the vision, and is now working on an ambitious commercial lines element.
What's especially interesting about their commercial lines approach is the way in which Penn National is planning to connect agency management system operation with the Penn National agency portal. Initial experiments connected Applied's The Agency Manager, through IVANS/Applied Transformation Station to the carrier Web site. Future implementations may also apply the concepts of Hybrid Interface; that is, the direct cooperation between management systems and carrier Web sites (more below).
General observations
The Penn National Web site is well designed and especially user friendly. The notion of friendliness is reinforced by an open letter from Denny Rowe, president and CEO, and by the way each departmental page is in effect sponsored by a named and pictured Penn National employee who speaks directly to the site visitor. Overall, one comes away with the impression that the company is personally accessible — not a bureaucratic, frustrating institution.
Site navigation is clear and straightforward. A persistent left column menu lists significant site sections (e.g., Our Story, Insurance, Claims, Consumer Info, etc.).
A horizontal menu across the top of the page provides general navigational aids (home, search, site map) as well as additional relevant items and a navigation menu for the specific page being perused (for instance, the consumer info page provides Agent Finder, Auto Insur-ance, General Insurance, and Homeowners Insurance sections). But an otherwise good site is marred by a search capability that could stand improvement. It works only with pre-defined keywords, rather than all words. I wasn't able to find anything I was looking for.
I was told that the carrier has a project in the works to improve this functionality.
Site pages use supporting graphics, but they're small. No flash, other fancy stuff, or long-loading page elements are used. Consequently the pages load quickly even with dialup connections. Page real estate is used efficiently throughout the site, with page identity and navigational elements kept small but legible. The site doesn't employ frames, which can sometimes interfere with visitor attempts at identifying a page as a favorite and with understanding how to navigate it.
The Penn National site provides a solid company history section, but, as far as I can tell, no press release or announcement section and no links to external articles about the company. I'm surprised that a $500 million company provides so little insight into its doings, though perhaps that's related to its mutual roots.
Consumer information and service
Penn National provides shoppers useful information and policy holders self-service capabilities, but it does not attempt to price or sell insurance directly through its Web site. Instead, throughout the site, the carrier stresses its partnership with its agents and their ability to serve the consumer's needs — for instance, by providing personal consultation.
Access to the agent locator is pervasive on the site, but its functionality could be improved. To use the locator, one chooses the type of insurance desired (personal lines and/or commercial lines) and then enters a ZIP code. Agency information is returned for the closest matching ZIP code. The return page may then provide a button to display more agents, presumably a bit farther out from the input ZIP code.
When I asked for personal line insurance for ZIP code 20101, I was returned an agency that wrote construction insurance. Not what I was looking for. Hitting the "show me more" button twice returned two, then seven agencies - according to what principle I have no idea.
Agency finders should allow the site visitor to search in several different ways, according to the information they have available — besides ZIP code - to include city/town, county, area code and ideally via a map as well. And the finder should make it very clear what it is doing and how.
The Penn National site contains an easily accessible library of consumer information addressing auto, home, and general insurance questions. Like the rest of the site, the content is clearly written and reads like it was written by and for regular human beings, rather than lawyers. Much of the content is generic, though some mentions the carrier specifically.
In the business insurance section, the site describes in some detail the lines and types of business the carrier has chosen to write. Both personal and commercial lines claims procedures are spelled out, including how to find a claims office. The site also offers some safety and loss prevention information — including some directed specifically at older drivers (e.g. changes in vision and its implications) and parents of new drivers (e.g. getting teenagers to listen — something we'd all like to know how to do).
For those consumers who can't find enough radio commercials to listen to, the site provides audio playback of the spots the carrier has aired in the past. On a more serious note, Penn National offers some Web-based self-service functionality to policyholders. The carrier home page provides a link to a policyholders' self-service signon page. Policyholders can check bill status, make payments online, and retrieve policy information.
The Penn National site provides useful information to shoppers, policyholders, and agents through its Web site — and allows agents to include some of this information into their Web sites via a link between the agency and carrier site.
Personal lines agency services
Penn National supports both upload and download ACORD-based interface for personal lines. Download is available for Applied, AMS, DORIS, SIS, and Instar systems. Upload is available from Applied's The Agency Manager and AMS for Windows. Therefore for personal lines and some management systems, Penn National supports a classic SEMCI solution for agents. So for instance, agents can do comparative quoting, then initiate new business transactions in their management systems and upload the data to the carrier. The carrier can complete its part of the transaction (rate, underwrite, and issue) and then download policy information back to the agency management system.
Penn National provides a variety of agency services through its Penn Connect services on its Web site as well. Agents can do claims inquiry, billing inquiry, pay direct bill premium on behalf of a policyholder, do loss runs, read manuals, and access forms. According to Melinda Lloyd, Penn National director, the carrier provides on line almost everything agents need to do business with the carrier. She believes that Penn National is one of a small group of carriers that provide nearly complete online agency services.
Unfortunately, agents can't make policy changes out of their management systems or through the carrier Web site. They must notify the carrier of the needed change via FAX, phone, email or snail mail. Then the carrier staff puts through the change via its policy administration system. Penn National isn't alone in not supporting agent access to policy change. Most carriers can't. Even though policy change is a frequent event for agencies, generally it isn't supported via SEMCI implementations or even carrier Web sites, often because of limitations in the architecture of the underlying carrier policy administration systems.
Commercial lines agency services
Penn National is taking a different approach with commercial lines than it has with personal lines. Rather than trying to accomplish a classic SEMCI upload/process/ download scenario (with additional functionality available through the carrier's Web site), Penn National intends for agents to be able to complete the entire commercial lines process online, with some measure of cooperation with agency management systems. The Penn National commercial lines vision applies to workers comp, auto, package, BOP, and umbrella.
The idea is for an agency to enter commercial lines information into its management system, transfer the data to the carrier system and then go to the carrier Web site to complete the new business transaction. Penn National intends that in many cases agents will be able to quote, then bind and "issue" commercial lines policies in minutes in one sitting.
Why not use the classic SEMCI process for commercial lines as well as personal lines? When I talked to Lloyd about the Penn National approach, she said that agency management systems don't cope well with carrier-by-carrier commercial lines differences. While personal lines is something of a commodity, commercial lines definitely isn't and carriers distinguish themselves one from another through product differentiation and thus require unique information from one to the next. That means commercial lines upload really isn't practical since what's uploaded isn't adequate for a carrier to process the application. And download is problematic as well, since carriers would want to send back more information than agents' systems could digest. I'm not certain how strong this point is since I've observed that in recent years some agency management systems have gotten pretty good at conserving and even being able to send back to the carrier whatever information the carrier downloads, even if the agency system has no specific predefined place to put it.
From Penn National's point of view, the best way to facilitate the commercial lines process is for the agent to come to the Penn National Web site, complete the application, get a quote and so on. But since Penn National believes that agents want to start the process in their management systems — as they do with personal lines — the carrier set up a process whereby information from the management system could find its way to the carrier Web site, thus providing a single entry solution.
Initial experiment
In an initial experiment, Penn National made it possible for agents using Applied's The Agency Manager and IVANS/Applied's Transformation Station to enter data into the management system, transfer it to the Penn National Web site, then go to the Web site, now with substantially pre-filled forms, to finish the transaction. The agents would enjoy single entry (at least for the submission stage), be able to what-if quoting, and then complete the transaction to issue.
With the Penn National approach, the agency management system and carrier Web site work in tandem. When the agency passes the submission information to the carrier system, once of two messages are returned — either an error message or a pick-up link. In the former case, the agent makes corrections and then resubmits the information. In the latter case, the agent clicks on the link (then goes through sign-on if necessary) and then continues the data entry process on the carrier Web site.
An initial Penn National commercial lines experiment included 17 agents, ten using an Applied system with a connection to Transformation Station. At the carrier Web site, Penn National provided agents access to the same screens and user interface that its internal staff uses for commercial lines. Unsurprisingly, the agents found the carrier system unsuited to their needs. The Penn National internal user interface was simply too rich and therefore overly complicated for agents. The carrier is currently evaluating several alternatives to provide an interface that is more appropriate for agency use, and so the commercial lines experiment is temporarily on hold.
Perhaps surprisingly, none of the ten agencies that could have done entry first into their management systems and then used Transformation Station to move the data forward to the Penn National Web site actually did so. Instead, agency personnel went directly to the carrier Web site, bypassing the management system altogether.
Because the first order of business is to provide a more appropriate agency UI on the carrier site, Penn National hasn't been able to study why the agencies ignored their management systems when doing commercial lines submissions. Lloyd hypothesizes that perhaps agency CSRs found it easier to do "what-if" scenarios directly on the carrier site or perhaps they preferred single step workflow. And some agencies enter policy information into their management systems only once the policy has actually been sold. In any case, if agents continue to be disinclined to start the commercial lines process in their management systems, that may strongly suggest that personal lines expectations simply don't fit commercial lines and management systems will play a different and less central role than in personal lines.
Hybrid interface?
In discussing the Penn National approach with Lloyd, I floated the hybrid interface concept to get some sense of its attractiveness to Penn National. I pointed out that though the carrier was trying to make some sort of connection between management systems and its Web site for commercial lines submissions and was doing personal lines upload and download, it could improve the situation for agents by providing a strong connection between agency management systems and its Web site for other transactions, such as billing inquiry, claims inquiry, and so on. Lloyd commented, "I don't see us pursuing using Transformation Station on billing or claims inquiry transactions, as we have more robust functionality for inquiry — and they can also process payments, etc. If, however, the agency system had a URL taking them right to the PNI Web page for that claim or bill — that would be great."
Commercial lines download is relatively rare and upload even less common in the industry. If Lloyd is right, that there are too many differences carrier-to-carrier to make classic SEMCI work for commercial lines, even with some carrier-by-carrier accommodation for special data and edits, perhaps carrier Web site functionality made more accessible by hybrid interface will prove to be the most practical approach. And it could turn out that agents will depend more on carriers to store commercial lines policy detail and less on management systems. It's too soon to say, but Penn National's experience so far suggests that classic SEMCI concepts may not universally fit commercial lines.
In any case, Penn National has its focus fixed squarely on finding ways to significantly improve the commercial lines insurance process through the use of the Internet, while at the same time recognizing the central place management systems play for agents. Once Penn National fields its new, agency oriented user interface and begins its test process again, it will be interesting
to see whether agents start in their management systems and then move to the Penn National site, as the carrier has expected, or continue to go directly to the carrier Web site.
I'd like to see the carrier look into other ways to link its Web site with management and perhaps rating systems, creating useful hybrid interface arrangements. I'd also like to see the carrier help agents make their own Web sites richer by providing more content and functionality agents can include in their sites, not just through a link. But the carrier is off to a good start and crystal clear about how it intends to sell insurance, partner with agents, and make use of the Internet — a position many carriers have yet to achieve.
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