ACT report identifies technology trends
that will affect how agencies do business
By Jeffrey M. Yates
Agency owners need to establish a culture that views technology as a strategic opportunity and an integral part of the process of running an agency.
--Jeffrey M. Yates
Agents Council for technology
The Agents Council for Technology (ACT) is a dynamic partnership of agents, companies, technology providers, and industry organizations. The Independent Insurance Agents of America established ACT to facilitate and promote the effective use of technology in our distribution system. ACT pursues its mission in a focused and action-oriented manner. It is committed to addressing the issues that get in the way of the full utilization of technology in an objective manner, without politics and rhetorical flourish. ACT understands that we accomplish more if all the parties work together, where each gains a better understanding of the needs and interests of the others.
ACT also publishes reports to assist agents and the rest of the industry in getting the maximum benefit from technology. ACT has just completed a major report that provides agents with a vision of the future for technology and provides essential next steps to help agents to fully take advantage of these opportunities. We believe this paper will provide agents and the industry with a very helpful framework in which to evaluate potential technology decisions.
The full ACT report, "A Vision of the Future for Agency Technology Including the Essential Next Steps for Independent Agents," as well as several useful technology checklists, are available at the ACT Web site at www.independentagent.com by clicking on Agents Council for Technology.
The Internet has fundamentally changed our business, and agencies and companies need to adapt their technology capabilities accordingly. Consumers want to interact with our industry electronically and expect immediate service. At the same time, companies and others want to do business with agencies in real-time over the Internet.
There are no perfect solutions, but investing in technology provides a definite bottom-line payback to the agency. It positions the agency for increased profitability, growth, efficiency, and heightened standing with clients, companies, employees, and potential purchasers.
The vision portion of the new ACT report lays out eight major technology trends that will significantly affect how agencies do business in the future. Agencies will have increasing opportunities to outsource a significant part of their in-house technology to Internet hosting services (also referred to as application service providers--ASPs). More and more e-business will be done on a real-time interactive basis over the Internet allowing quicker response times but also creating new challenges.
Integration platforms, whether provided in the agency management system, the comparative rating system, or in an ASP will help agencies do business with multiple companies and other parties in a real-time manner, with data entered only once. Agencies increasingly will have the capability to let prospects and customers do business electronically on the agency's Web site.
Technology will permit companies to implement single-step processes that significantly improve industry workflows by eliminating multiple steps and the resulting "pass offs" to numerous people. In larger commercial lines, collaborative computing will improve efficiency because the multiple parties working on a commercial proposal will all be able to communicate interactively and work from a single electronic file. Agency employees will have the capability to conveniently use their computers from any location, increasing their responsiveness to customers. Finally, technology will enable agents to expand their personalized marketing and service activities with prospects and clients.
The ACT report elaborates upon each of these trends along with their implications. The paper then lays out several recommended actions for agencies, companies, technology providers, associations and user groups to maximize the benefits that can flow from these trends to the independent agency system.
In this report, ACT recommends several essential steps for independent agents to take now to position themselves to profit from these emerging technology trends. The critical first step is for agency owners to establish a culture that views technology as a strategic opportunity and an integral part of the process of running an agency. Technology cannot be viewed as separate anymore. The agency should organize itself so that there is a chief information person or its equivalent focused on maximizing the benefits of technology in the agency. Technology should be implemented to respond to a defined need in the agency, such as to improve a particular business process or workflow.
It is extremely important for agencies to stay current with the latest releases for their agency management systems as well as have at least Windows 98 or Windows NT on their systems, along with hardware that can run these applications efficiently. Agencies should avail themselves of new company interfaces promptly and use electronic download from the company wherever possible to eliminate paper and improve efficiency. Agencies also should install Internet access on each agency employee's desktop with an always-on, high-speed connection. These steps taken together will position the agency to use many emerging real-time technology applications profitably.
Agencies also should strongly encourage the implementation of the ACORD XML industry standards by companies and technology providers because these standards are essential to achieving efficient single entry, multiple company interfaces (SEMCI) in an Internet environment. ACT believes that the future of insurance computing lies in real-time transactions and that agencies should use this new functionality to improve their efficiency. At the same time, agencies need to work with the ACT participants to address problems with the current versions of real-time computing so that the process works more efficiently for independent agencies operating in a multiple-company environment. The ACT vision is for agencies to be able to initiate transactions in their agency management system, comparative rater, or other application and access multiple-company Internet sites to complete processing in real time.
ACT also recommends that agencies use their current agency management systems and other technology more fully and that they adopt digital imaging technology, by exploring the benefits of electronic filing, adopting scanning, eliminating paper, and using digital cameras. Agencies are urged to adopt 24x7 customer service to increase efficiency and to respond to new customer expectations. In addition, the agency Web site offers a potent way to brand the agency and attract new prospects. Finally, agencies need to focus on the security of their systems because the new functionality creates new risks that must be managed.
In addition to this report, the ACT Web site contains three new checklists that provide very practical information for agents. In the first, consultant Laura Nettles outlines frequently missed opportunities to improve agency workflows. Consultant Sharon Cunningham provides a second checklist detailing a number of common areas where agencies are under-utilizing their agency automation functions. Mele Fuller of Safeco Insurance Company draws on her experiences with an agency automation vendor and the company to provide ACT with an excellent checklist of key questions and potential hidden costs for agents to keep in mind as they make their agency system decisions.
ACT's agenda for the coming year is to get the technology message out broadly to agents. Agents have terrific potential for the future, but effective use of technology will be increasingly important. ACT also plans to develop additional practical tools to help agencies implement the recommendations contained in the report.
ACT's other major role is to continue to address problems with existing technology. For example, we have a work group addressing how we can alleviate the current password nightmare for agents trying to access multiple company systems. We also will continue to champion solutions that reduce the need for agents to enter data multiple times.
The participants in ACT are enthusiastic about their charge because they realize that technology today can change agency-company processing, inquiries, and communications fundamentally--for the better. The ACT participants know that each segment of the industry must better understand the needs of the other segments. By doing so they can realize the full benefits of this technology. Technology can be used to markedly improve communications and responsiveness to the consumer, while newly permitting the consumer to interact with the industry electronically. The ACT participants know that a commitment to continuous improvements in operations through technology will be key to sustaining a competitive advantage in the future because they are interacting with business partners which are also technologically proficient.
Go to www.independentagent.com for more information. *
Jeffrey M. Yates is executive director for the Independent Insurance Agents of America's Agents Council for Technology (ACT). Yates' tenure with IIAA spans some 25 years during which he served as general counsel, executive vice president, and CEO industry and state relations.