Agency Automation in The 21st Century

Have you noticed that the carriers are asking you to make changes to their policyholders on the carrier’s proprietary system instead of on your agency management system? They are willing to download to the major agency automation systems to keep your system up to date. However, the reverse is not true. The development of carrier uploads from your system to their carrier proprietary system has stalled.

As we speed our way into the Internet Age, one of the by-products of broadband internet speed and relatively unlimited memory capability is the opportunity for carriers to open secured portals to their systems and permit clients to submit changes themselves. This will skirt agent processing completely. This is more efficient for both the client and the company because the client can request changes and quotes for changes, report claims and view their payment status on line 24/7 instead of waiting for insurance agency business hours as they have in the past. But how will it affect the agencies?

Agents whose only relationship with their clients is through processing are quaking in their boots. Progressive agents view this transition differently. For the past two hundred years the agents (owners and producers) have been the relationship managers with the clients, and all in-house staff has been responsible for processing and administration. A few things are changing this model.

First, trained or trainable employees are becoming harder to find. Agencies whose challenge has been growing the customer base now complain that they can’t grow simply because they can’t find good service and administrative staff.

Second, the transfer of processing from agency to clients will result in less need for processors and more need for relationship managers. The smart agents are training CSRs to become Account Managers. As processing diminishes, the smartest administrative employees will become our client managers while the producers and owners will be responsible for creating new relationships, building on existing relationships and maintaining strong relationships with the agency’s clients.

Finally, since fewer customers are interacting through the agency because of Service Centers and direct client reporting, agency management vendors are responding by enhancing remote automation processing for the agencies. Both AMS and Applied, the industry leaders, have been developing and are selling their ASP models of agency management systems that will host agency data and systems in a secure and effective manner. This will permit the agents and their staffs to concentrate on the client rather than on updates, repairs and maintenance of in-house automation. The synergy between agency, client and company will make each responsive and reliant on each other.

So where are we heading from an automation standpoint?

Understand that company Service Centers are interim steps toward direct client interaction. Companies want you to use their Service Centers to educate their clients in direct relationships for processing. The inherent weakness of this system is that many clients have multiple policies through their insurance agents with several carriers. Few will look forward to calling each company to handle processing and claims for a variety of products. That’s why they hired an independent agent in the first place – to manage their insurance portfolio.

We need a long-term solution that accomplishes the goals of the carriers, the clients and the agencies. The carrier wants direct interaction with their clients to increase their efficiencies. The agencies must reduce their overhead to attain profit efficiencies. They must also use their limited human assets to their best advantage in relationship management. The client just wants simplicity. The younger and automation-savvy clients want to handle their routine insurance processing without visits to their agents or adherence to antiquated “business hours”. They now reside in a 24/7 world of e-mail, text messaging and automated banking and bill paying. They expect our industry to follow suit. The clients who still want individualized personal service expect their agent to be the single point of contact for all of their insurance needs.

Using the agency automation system to its greatest advantage will create fully secured portals within each agency’s system that will permit the client to access his account with each insurance company. The client will be able to inquire regarding payment history and status, identify costs associated with contemplated policy changes and request those changes, and report claims in a real-time atmosphere on-line or to a live representative.

The banking industry has already embraced this technology. Their customers can use their local bank branch or access their account any time on line or by phone. We believe that the insurance industry must follow suit. This would give clients ease of access to their insurance products and will enhance agency and company profitability.

In the insurance industry, downloads from the carrier systems will continue to populate the agency management system with current data for its clients. Automated responses will keep the agency staff alerted to any changes and inquiries made by their clients to permit them to contact the client if needed.

While we are still some years away from client access to their companies and policies through the agency portal, the remote capabilities of the agency management system vendors and even the carrier Service Centers are steps in the right direction.

Agency owners must concentrate their Strategic Plans toward the steps needed to convert their agencies from processing shops to relationship managers and insurance counselors for their clients. If they concentrate on actions that will lower their running costs without losing control of their clients, they will make the right decisions about the progress of automation within the agencies.

Remember, if you use the tides to your advantage, you become a proficient surfer. If you try to stand firm and fight the tide, you end up drowning. Learn the future direction of your agency automation system and of the industry and surf the wave to greater efficiency and greater profit. The industry is changing and automation is one of the primary vehicles that is speeding the change.