Lucky Number Seven

It’s not a silly question when the capability of a system’s automation today can mean the difference between an agency that profits and one that limps along. The more your system does and does automatically, the more everyone in your business can focus on tasks that are really important—like selling policies and building relationships with customers.

To find out how agency automation is changing and where it’s heading, IA assembled a panel of experts, some of whom chair work groups within IIABA’s Agents Council for Technology (ACT). They broke down agency management system functionality into the seven areas viewed as crucial to an agency’s current and future success. Get a sense of where your agency stands on the technology spectrum by comparing these seven capabilities with your current system. And then decide whether to keep the system you have—or start planning now to replace it.

Real-Time Processing
“Systems today should be able to do real-time inquiries and ratings,” says Donna Barr, president of Premier Insurance Consultants of Palm City, Fla. “These are the main functionalities of real time processing.”

Steve Aronson agrees. “I’d need to hire additional staff if I didn’t have real-time inquiry and rating,” says the chair of ACT’s Agency Security Best Practices Work Group and owner of Needham, Mass.-based Aronson Insurance. “You just can’t do it as fast without real time. No system should be purchased today without real-time capability.”

Almost weekly, vendors and carriers expand the list of real-time processes available to agents. A 2009 survey by the Real Time Campaign revealed that agents using the near-instantaneous technology saved an average of 10 hours per month, per employee. Newer real-time functionality includes endorsements, payments to carriers, Motor Vehicle Reports (MVRs) and first notice of loss (FNOL). “After an accident, I can talk to my customer and get the claim information, then make a warm transfer to the carrier’s claim rep and save a half hour of my time,” says Aronson. Carriers like real-time FNOL, Aronson says, because they receive information directly from the customer.

Use this list of must-haves to determine if your agency management system is keeping pace.

Customers appreciate it because they receive adjustor information directly from the carrier. And agents like it because they, too, receive the information quickly and get it directly from the customer. “It’s a great tool,” Aronson says.

Online Hosting
Martini, Miller & Schloss, Inc. of Northbrook, Ill., is a five-person agency using an online agency management system. “It’s great,” says Don Solomon, personal lines manager. “The new system has freed up so much of my time. I no longer have to worry about backing up the system, updating hardware or software and any other technical issues that used to pop up when we had the system in-house. It’s all done for us online.”

Because the system is accessible via any Internet connection, Solomon and other employees enjoy other plusses: They can work anytime and from almost anywhere, safe in the knowledge that agency data resides not at the office, but in the cloud or on a remote server. “We could have set this up with the new system in-house, but it would’ve added another layer of technology,” Solomon says. “Online is a little more expensive, but we can put so much more time into other agency activities now.”

At the opposite end of the agency size spectrum is Arroyo Insurance Services, in Arcadia, Calif., and a dozen other locations. Jim Armitage is principal of this 165-person firm, and he’s a happy man. “We love it,” he says of his online system. “No more upgrades during lunch. No more rebooting. No more maintenance and almost no downtime. And we have a lot of people who access it off-site. We’ve found it to be a huge time-saver.”

Monthly user fees for online systems run higher than fees for their in-house counterparts, because vendors, not users, perform the maintenance, back-ups and upgrades. As a result, some larger agencies stick with in-house systems. Online systems have also been criticized as slower than in-house, but Armitage doesn’t care. “I find the headaches of in-house systems are just too much to deal with,” he says.

Download and Upload
Because it eliminates rekeying, download capability is critical to data accuracy, and therefore to preventing errors and omissions. Best practices agencies use download for personal lines, small commercial lines, direct-bill commission statements and to an extent, for mid-size commercial lines. In mid-size commercial, the progress continues.

“There are problems with property and submissions [functionalities],” says Sharon Emek, chair of ACT’s Mid-Commercial Work Group and a director of operations for CBS Coverage Group in New York City. “Agency management systems should be functioning through portals to carriers at this point, instead of through attachments to e-mails.”

As yet, however, neither automation vendors nor insurance carriers have developed portals, which are centralized starting points for transactions done on carrier websites. (The technology is common at banks, where it is used for online bill-paying.) Were agencies to have this functionality, Emek says, they could automatically upload information to multiple commercial lines carriers and then receive electronic alerts as each quote arrives in the agency management system. “It’s the workflow we want,” says Emek, “and we’re working with ACORD to make sure whatever they need for it is in place.”

Steve Aronson is disappointed some agencies that won’t implement commercial lines download at all because it’s not perfect. “Eighty percent is better than nothing and it gets better every month,” he argues. “Download may only send you 80% of the information your CSR wants in the system. But would you rather have 80% or zero?”

Automated Workflows
The age of automated workflows is just beginning. Not all vendors offer them yet but automated workflows are likely to be the next major agency efficiency. Donna Barr of Premier Insurance Consultants explains why they are important: “Automated workflows tell me as an agency owner what my CSRs are doing all day,” she says. “They tell me how long it takes them to do a task and whether they are doing all the tasks required.” Such a workflow can begin when a document is scanned, then continue by tracking the document it on its journey through the agency and recording each task that is performed relating to it, the person who did the task, when it was done and how long it took.

Agency reporting can also become an automated workflow. “In newer systems, you set up each report one time and specify each person who needs to receive it,” says Barr. “Then everyone gets the reports they need at the time they need them. They just show up on the desktop.” Barr has run many reports manually, so to speak, by going into a system, defining report parameters and running it. “I know how long it can take,” she says. “Automating reports can save you thousands of dollars in time.”

If Brad Smith could choose one new capability to add to an agency management system today, it would be automated workflows. “It’s smarter automation than what we’re doing now, and a lot of workflows could be automated,” says the president of Smith-Berclair Insurance, a 30-person agency in Memphis. As an example, he mentions setting up a new auto client. “Entering that new piece of business in your system, you’d want the system to create a letter to that customer and send it by e-mail or fax,” Smith says. “For a claim, you’d want the system to generate a follow-up letter to the client and an activity report for the agency.” Workflows should be so automated, he believes, “that once you’ve done one thing, your system knows the following steps to take and when to take them. You set it all up beforehand and there’s no human intervention.” As with portals to carrier, it’s what agents want—and what vendors are being pressured to deliver.

Less Paper
“We all need to look at the types of paper we’re generating today and consider the legal and security implications of being as paperless as possible,” says Ron Berg, chair of ACT’s Strategic Future Issues Workgroup. Berg is also senior technology research specialist for MetLife Auto and Home, but he spoke to IA in his capacity as ACT workgroup leader. E-signatures and electronic document storage provide many E&O advantages, Berg believes. “There’s an audit trail in some systems that shows when a document was downloaded, who e-mailed it to the customer and when, and when the customer opened it—that’s where we are now,” he says.

Brad Smith expects more policies to be delivered by e-mail or disk. “This is already available, and there’s no reason for companies to be mailing out these huge policies,” he says. Less printing of policies will be good for everyone, he thinks, and will go hand-in-hand with a trend for customers to do more via agency portals.

Customer Self-Service
Some customers want to do things for themselves: check their coverage, see their bill or model an automobile quote before buying a new car. But not every agent wants to let them. “We still like talking to our customers every chance we get,” says Brad Smith. “We think there’s a fine line about how you provide service, and we want to continue to build the relationship.” Smith also worries that allowing customers to make policy changes could increase agency liability. “Seeing their bill or reporting a claim is one thing,” he says. “Changing a policy is another.”

“The challenge is figuring out what customers want to do and what the agency wants them to be able to do,” says Ron Berg. As agents decide the types of customer self-service they want to offer, he says, carriers will be driven to make them available.

Marketing
Most new agency management systems have robust client-relationship management capabilities that can be used for, among other things, marketing. “We have a gold mine of information in our system that helps with predictive analytics, identifying good risks and identifying cross-selling opportunities,” says Angelyn Treutel, president of SouthGroup, GulfCoast in Bay St. Louis, Miss. Treutel laments that many agencies ignore these tools. “Yes, they’d have to make the time to explore these things and train their people on them,” she admits. “But each agency management system has dynamic user groups that are great resources for learning shortcuts to use the system better. And there are discussion forums online.”

To the larger issue of neglecting any robust functionality a system offers, Treutel says this: “Those features are there for good reason, to help your agency be the best it can be. The more of them you use, the better you can operate your business.” What’s more, she says, vendors will continue to add functionality and more powerful processing to systems, and it will come with a cost. Thus, buying a system and using only a portion of it will leave more and more money on the table. “Agency management systems are the great equalizer,” Treutel observes. “No matter the size of your agency, you can increase your presence, do better analytics and better manage your customer relationships, all by using the tools in your system.”

Are you using all the tools in your system? The tools are improving and increasing all the time. For agents with an eye on profitability, it can’t happen soon enough.

Susan Hodges (hodgeswrites@gmail.com) is an IA senior contributing writer.