Turn the Page: 3 Steps Toward Becoming a Paperless Agency

Slowly but surely, the insurance industry is waking up to the idea that paper isn’t the only way to do business. In 2016, more than 80% of small and midsize businesses said they want to cut paper out of their business, according to a study by Device Magic.

The reasons for dumping paper are clear: It wastes money, slows down processes and diverts time away from generating new business. Moreover, paper builds up over time, and so does the cost of managing it. An organization’s paper consumption grows an average of 22% per year, which doubles the cost of storing and managing it every 3.3 years, according to Device Magic. Most astonishingly, in total, U.S. companies spend over $120 billion each year printing forms.

Agencies can implement a host of technologies to make the switch to paperless, such as e-signature, fillable PDFs, agency management systems and downloadable applications. But given the array of options out there, as well as the growing number of InsurTechs entering the increasingly crowded marketplace, the choices may seem overwhelming.

If you’re confused about how to ring in the changes, start by taking these three easy steps toward becoming a paperless agency:

1) Change your mindset. Paper is going out of fashion. Even though a portion of your insurance customers may still want to receive paper documents, business expectations are changing—and you must too.

“Right now, there’s a mindset problem that’s preventing agencies from embracing or trying to implement paperless ideas in their workspace,” says Steve Anderson, insurance industry thought leader on technology, productivity and innovation, and president of the Anderson Network. “It’s what I call playing a paper mindset in a digital world.”

Change never seems natural, but it is often necessary to ensure your business doesn’t get left behind. Still, accepting that your business can do things without paper as effectively, if not more effectively, is one step. Instilling the idea throughout your agency is another.

“It starts at the top,” says Patricia Lamb, president of Select Insurance Services Agency Inc. in North Royalton, Ohio, which went paperless five years ago. “When staff sees your commitment—the owners, managers, supervisors and all the way down—that sets the bar. Out of all the people in your business, the people who lead need to be there first.”

2) Ask why. The effect of asking this question is two-fold. First, it leads you to truly understand why paper still exists in your operations. Second, it helps you understand the best process for replacing it.

Anderson recommends a technique called “The 5 Whys.” This is the process of asking why five times, with each response forming the basis of the next question. “You really peel away the onion of why you’re doing something,” he explains. Of course, “the proper answer is never, ‘Because we’ve always done it that way.’”

As Lamb’s agency weened itself off paper, staff improved agency operations by questioning what they were doing. “We were scanning documents and then we were filing everything, as well,” she says. “You just have to take a step back and say: ‘OK, why are we doing two things?’”

3) Create new processes. Digitalizing your files and day-to-day tasks will involve creating new processes. Without the intention to implement a new framework for your agency and staff when handling materials, such as policy documents, applications and client information, you will not easily realize the benefits of going paperless.

“It’s a matter of finding a way to scan, email, sign and file documents in a way that makes them easy to get to so you can better serve your clients,” says George Page, Jr., president of Page Insurance in Guilford, Connecticut. “Ultimately, it’s just organizing the workflow around some sort of structure that lends itself to getting the job done for your client.”

Additionally, if your agency is struggling to decide what type of software to invest in, remember: “Agency management systems are important, but I don’t think a specific one is as important as how you use it,” Page says. “Going paperless is a progression toward getting better at what you’re in business to do.”

The Next Frontier?

While becoming a paperless agency will no doubt revolutionize the way your agency operates, it could also play into an even bigger picture as big data continues to transform the insurance industry.

“We want to branch out to work with partners that our AMS will allow us to use, which is maybe going to require sharing some of our data,” Lamb says. “Then, we could become even more efficient and provide a different level of customer service to our clients.”

“For that to happen, we need to have good, solid, clean data to share, because now it’s going to go outside of our walls,” Lamb adds. “That’s where our efforts are right now—making sure our digital data is accurate for others to understand so that we can launch an effort to provide more services.”

Will Jones is IA assistant editor.