According to Stan Davis and Christopher Meyer, authors of Blur: The Speed of Change in the Connected Economy, by the end of this year, telecommunication networks in the U.S. will carry more electronic data than voice. Further projections indicate that by 2003, voice will be less than 10% of the traffic.
We've all heard a lot about the "speed of change." Through statements like the one just made, we meet it face to face. We see this phenomenon practically everywhere we look: in medical advancements, politics and global affairs--but it is especially evident in technology.
In fact, the "speed of change" in technology is almost overwhelming. If you bought a new personal computer last December, chances are it's already obsolete--and its newer, faster replacement probably costs several hundred dollars less than the one purchased late last year. The cycle continues as PC ownership and Internet usage increase and the "speed of change" accelerates even more.
It seems that it's all we can do just to keep up with it--let alone understand all of its implications.
So, how do you, as an independent agent, respond to all of this? What does it mean? What action is called for? How does the "speed of change" affect you? Through its Agents Council for Technology, the IIAA is taking a leadership role in helping you answer these questions for your agency.
It is the role of ACT to look at this speed of change phenomenon and the significant effect it has on the independent agency distribution system. Let me emphasize the word system because technology requires a system to operate. And if that system is to achieve efficiency and ultimately success, it must be synchronized. All of the components need to work together. In the case of our distribution system this means all of us: agents, carriers, vendors and the host of other technology providers who help make it all work.
A perfect example of how the "speed of change" is affecting our industry is in the area of electronic standards--the common language we use to communicate with others in our industry.
As many of you know, the organization that is responsible for these standards is ACORD, a nonprofit organization with over 30,000 insurance industry members and participants. (Visit the ACORD Web site at www.acord.org for more information.) ACORD Standards are continuously being refined and expanded. These standards are especially important for independent agents, since they allow us to all speak the same language as we electronically communicate with each other using upload, download, AL3, ObjX, and other means. Standards help keep us from being placed at a competitive disadvantage as a distribution system.
Now, when we apply the "speed of change" to technology, we see that it is constantly accelerating, creating new ways for computers to communicate. This, in turn, creates the need for new data standards.
New technology and communication via the Internet has introduced a new programming specification called XML--eXtensible Markup Language. XML is a new way for computers to exchange data.
In response to this new development, IIAA has teamed up with ACORD through our Agents Council for Technology to meet this new standards challenge. A joint initiative to create "Fast Track XML Standard Definitions for the Insurance Industry" is currently underway. The "fast track" element allocates 90 days for the development of an XML data dictionary. That's right, 90 days from start to finish--that is the "speed of change" we must now keep up with. The dictionary, which is the essential element everyone needs to agree on to develop the XML standards, will be presented to the industry at the IIAA's Convention in September.
This fast track response is especially critical to independent agents who have the most to lose from a lack of standardization and industry fragmentation. To be successful we must have a common language. In simple terms: We need the XML data dictionary that's being created.
There is an important lesson in this example for independent agents. It is simply this: When it comes to technology, you can't afford to wait. The "speed of change" is too rapid!
New technology offers new challenges and new opportunities. Agents need to, first and foremost, "get wired." Begin to understand what the Internet is and, equally important, what it's not.
Learn more about how to make technology work for you--improving productivity and efficiency, as a tool for sales, marketing and customer service.
In other words, be prepared to make the most of new opportunities as they become available. That's what your competition is doing and that's what you need to do!
Helping agents succeed in doing this is what the Agents Council for Technology is all about. Next month, during the IIAA Annual Convention at Caesars Palace in Las Vegas, ACT will unveil a Blueprint for Electronic Commerce. It will help you better understand technology as you chart your course and navigate this sea of change which surrounds you. The Blueprint also will help everyone in our industry--our business partners and service providers--better understand what independent agents need to be successful. This will help us work together to maximize the full potential of our distribution system.
We also will be announcing the details of another initiative at our convention in Las Vegas next month. This one involves "E-Commerce and the Law." Many of you may have already seen the IIAA study of "Regulatory and Legal Implications of Electronic Commerce on the Insurance Industry." You will find the study available on the IIAA Web site (www.independentagent.com).
The area of legislation and regulation provides yet another example of how our industry needs to keep up with the "speed of change" in technology. The problem is that there is still great uncertainty about how existing laws and regulations apply in the new world of e-commerce. This includes questions about licensing, advertising regulations, privacy, liability for content, signature requirements, record keeping and other issues.
Our legislative/regulatory initiative will address specific areas of concern and lay the groundwork to move us forward in making the changes necessary for us to more effectively compete in the 21st century.
So, what does the future hold for the independent insurance agent?
It holds both challenge and opportunity. A challenge in managing this "speed of change" phenomenon, but more importantly it holds an opportunity to better communicate the value independent agents provide: the knowledge, experience and relationship-based customer service everyone is looking for. The best of both worlds--high-tech and high-touch.
ACT Industry Council participants include: AMS Services, Inc., AMS Users' Group, ASCNet (the Applied Systems Client Network), Chubb, IVANS, Kemper, National Grange Mutual, Progressive, Safeco, St. Paul and The Hartford.*
The author
Len Brevik is the senior vice president, association affairs and chief information officer for the Independent Insurance Agents of America (IIAA). He is also the executive director of the IIAA Agents Council for Technology (ACT).
©COPYRIGHT: The Rough Notes Magazine, 1999