Carrier proprietary Web sites, extranets, agency portals--whatever--cause agents all kinds of problems and they're not going to morph into something more acceptable on their own.
By John Ashenhurst
If you've been an agent for a while, you probably remember the heyday of carrier proprietary terminals. Not so many years ago, carriers used to put them in agencies and required the agencies to use them for inquiries, and to enter new business, and sometimes changes and renewals. For carriers the economic justification was straightforward. If they could get agents to do data entry on the carriers' behalf, the carriers could cut back on clerical staff.
In many cases, the carriers did not have to make substantial software investments. They could just extend their mainframe policy administration systems out to their agents and make them accessible through "green screen" terminals. Since building a private network is expensive, many carriers turned to IVANS to supply the communication infrastructure to hook their agents into their systems.
Agents benefited from having more control over the data entry process. They could get it done right now and get it done right--an improvement over error-prone and backlogged carrier data entry departments. But proprietary carrier terminals caused problems as well.
Typically, an agency would have one terminal per carrier--each terminal with its own network connection or dial-up procedure. Since everyone in the agency would have to share a single carrier terminal, the terminals were often put in a back room and whenever someone needed to use a terminal, that person would get up from his or her desk and go to the appropriate terminal.
As carrier terminals became more common, agents identified a number of issues, among them: office space required for the terminals; interrupted agency workflow; the need to learn new systems; doing the carriers' data entry work; and double entry (into agency system and then the carrier system).
Over time, some carriers replaced agency terminals with PC software. That reduced the number of special-purpose devices in agency offices. And some carriers provided download (or synchronization) from their mainframes into agency management systems to eliminate double entry. But workflow, connection, training and other agency inconvenience issues persisted.
Agents, with support from their user groups, associations, and vendors, tried with little success to convince carriers to accept upload transactions. The idea was to enter data into the agency's management system and then transmit it to the carrier system for processing. Agencies would have the benefit of one workflow and carriers would still get the benefit of agent data entry. For the most part, unfortunately, carriers couldn't or wouldn't accommodate upload. The Alliance for Productive Technology (APT) and Applied Systems each provided upload solutions intended to overcome the carriers' objections, but upload has yet to achieve the adoption levels of download. Overall, proprietary interface got carriers what they wanted but caused agents continuing inconvenience.
Is everything different with the Internet?
Carriers are now beginning to implement agency portals (or extranets or carrier proprietary Web sites) and want agents to believe that the extranets solve the problems caused by proprietary interface. Some commentators agree with the carriers.
So what's the truth? Are proprietary carrier Web sites good for agents? If they're not, can they be improved upon in a way that benefits both carriers and agents?
Carriers have two important reasons for migrating from proprietary terminals (or proprietary PC-based interface) to Internet-based solutions: they can reduce communication costs substantially and they can reengineer basic distribution processes.
For the last decade or two, carriers have used IVANS or their own communication networks to connect agency terminals (or PCs) to their mainframes--and it hasn't been cheap. Since the Internet is available everywhere there are phone lines and it's "free," carriers can save a bundle connecting to agents through the Internet.
But some carriers are going further in reforming the proprietary terminal environment. They're building their Web-based solutions to substantially redesign workflow. With these single-step implementations, an agent can complete all (or nearly all) the steps in the pricing and underwriting process--not simply do data entry. Web-based single-step processing allows the carrier to reduce its workload, the agent to acquire more control, and the customer to enjoy more responsive service.
With or without moving all the way to single-step processing, carriers want agents to believe that carrier Web sites overcome the problems agents have with proprietary terminals. Since access is through the Internet and browsers, carriers claim that connection, training, equipment, and workflow problems are solved. And with download from the carrier system to agency management system, the double-entry problem disappears as well.
Does access to multiple carrier Web sites through a browser really obviate past objections to carrier terminals? Not quite. Agents still have to deal with multiple password/sign-on procedures. Each carrier has its own Web user interface (sometimes for each line of business) that agents must learn. And while agents can have a browser window and management system window open at the same time, they must still alternate between two (or many) different systems. Carrier proprietary Web sites do not solve all the problems of proprietary terminals; they only substitute new ones.
Should agents use carrier Web sites? Each case needs to be judged on its own merits. Carriers that simply migrate their proprietary interface into browsers may have done themselves some good by reducing communication costs, but they haven't done much for their agents. On the other hand, if agents can have access to true single-step, once-and-done processing through a carrier Web site, the added control and reduction of lag time may be enough to overcome inherent inconvenience.
Will things get better in the future?
Carrier proprietary Web sites elicit a number of different responses from industry cognoscente. One view says that it's a mistake to call them carrier proprietary Web sites in the first place since that associates them with proprietary terminals and they're not. They should be evaluated as new technology, namely browser-based applications. This is the "let's change the name" argument. My view is that it's certainly fair to carry forward the issues associated with the old technology as criteria to evaluate the new.
Another point of view claims that carrier Web sites so substantially address past problems of proprietary interface that the remaining objections are trivial in the larger scheme of things. This is the "quit whining" argument and while it may apply to single-step workflow implementations, it doesn't apply generally to all carrier proprietary Web sites.
A third view holds that widespread implementation of the ACORD XML standards will automatically lead to integration between carrier Web sites and agency management systems. The Web sites are just a stage that carriers are going through on their way to providing Internet-based remote services into agency systems. The "standards solve all problems" argument can be used to rally the troops around ACORD but relative to carrier Web sites it's specious. Carriers that have implemented XML standards are already denying integration connections to third parties. More than one has said in public that it intends to use its proprietary Web sites for competitive advantage. The carrier does not want to level the playing field by having its extraordinary technology sit in the background as a service to an agency management system.
Finally, some prognosticators predict that technology will solve all the problems with proprietary Web sites, even if carriers don't use ACORD XML standards and don't cooperate with integration efforts. This "don't worry, be happy" argument makes no sense since technology will not be able to overcome carrier business decisions and Web site security provisions.
No matter what anyone says, carrier proprietary Web sites, extranets, agency portals--whatever--cause agents all kinds of problems and they're not going to morph into something more acceptable on their own.
As I pointed out above, carrier Web sites that are merely a recasting of proprietary interface data entry systems do little for the carrier beyond reducing communication costs. They represent no competitive advantage.
On the other hand, carriers that have implemented single-step processing have done something important and valuable. They've finally used technology to reform the insurance process--to the advantage of all concerned. To the extent they can provide agents with a once-and-done environment and products with distinctive elements, they can achieve competitive advantage. The question then is whether they can retain competitive advantage even as a remote service integrated into an agency management system. The answer is yes they can. They can have what they want--competitive advantage through technology--and agents can have what they want--single workflow.
Carrier concessions required
Carriers need to be willing to make two concessions. The first is that they need to be willing to give up their distinctive user interface--not the fields, edits, business rules, rating, and other substance, but only the way the screens look and navigate. The user interface will be up to the agent's management system or other integration service. If a carrier is unwilling to give up its cosmetics even while retaining the substance of its technology, its vanity is getting in the way of its business sense.
The second concession is to implement its Web site in such a way that its substance can be made available as a remote service through the Internet to other software. There isn't any particular trick to this architecture and all carriers should be doing this anyway, if only for their own use. Remote services talk to local software via XML so it makes sense to use the ACORD XML standards--unless a carrier can show that the standards are deficient in some important way, and even then it would make more sense to help ACORD fix them.
What's the bottom line? Carrier proprietary Web sites suffer from most of the objections agents have had to proprietary terminals. Carriers that provide Web site single-step processing do provide something of value that can mitigate the inconvenience it causes. But in fact, a better solution is to integrate those single-step processes into agency technology and that can be done with little extra carrier effort and with no loss of competitive advantage.
But carriers won't do this on their own. They need encouragement through agent one-on-one sessions, user groups, and trade associations. Carriers and agents can both win. But carriers may not see it. You need to tell them. *
The author
John Ashenhurst is editor of Sounding Line, a monthly newsletter covering insurance and the Internet. For more information see www.soundingline.com. His company, Sound Internet Strategy, provides consulting, Web site evaluation, and seminar services to independent agents and their trading partners. He can be reached at johnashenhurst@soundingline.com or (978) 318-1944.