TECHNOLOGY

A giant step toward efficiency

Zurich Programs and Direct Markets unit offers program administrators process improvements

By Nancy Doucette

Welsh statesman David Lloyd George is credited with saying: "Don't be afraid to take a big step if one is indicated. You can't cross a chasm in two small jumps."

It's doubtful that Scott Montney, IT director for Cochrane & Company (C&C), an MGA headquartered in Spokane, Washington, had the statesman's remark in mind when he and his three-person team undertook the real time upload project that would save Cochrane literally thousands of keystrokes, but the sentiment was certainly there. "As far as data exports from our organization to a carrier—carrier interface—this was the first project we'd ever undertaken," he says. "The project grew out of a need to simply process quotes faster."

If you're going undertake a project the likes of which you've never tackled before, why not start with a large international carrier…like Zurich?

Montney recalls that it started when Nick Cochrane, one of the "power users" in the transportation division's underwriting department and son of the firm's owner, came to him with the observation that data from C&C's AIM™ management system could be imported in an XML format into Zurich's Z-Spire® system, which the general agency uses for quoting, rating and issuing.

As a program administrator for Zurich, C&C rates, underwrites, quotes and issues business on behalf of Zurich. As a result, they use the Z-Spire system extensively. But, Montney confides, "With the volume of transactions and the amount of time required to enter vehicle and driver information into their system, we didn't have the manpower to keep up with demand."

Montney explains that for fleets of a certain size an underwriter would review it, pre-qualify it and send it off to the processing department to have them enter all the vehicle information—VINs, year and make—and driver information into the Z-Spire system. Then the processing department would send it back to the underwriter. At that point, the underwriter would log back in, finish editing all the coverages and make any adjustments to forms. Sometimes an account would move back and forth internally two or three times before it was submitted to Zurich to get a quote.

That was motivation enough for Montney to continue to research a solution. He discussed the project with Tom Cochrane, C&C's president, noting: "If Zurich can give us the schema—the road map—of what the XML is supposed to look like for us to feed into their system, we can get something done."

The planets align

At about the same time, Tom Cochrane attended a meeting of Zurich's Agency Advisory Council for Specialty Auto. To Cochrane's delight, one of the agenda items was discussion of a real time initiative in Zurich's Programs and Direct Markets business unit. Matt Burbach, vice president, specialty auto for Zurich observes: "The type of business that we do in specialty auto is somewhat labor intensive. There are lots of data elements. The efficiency of our systems has a direct impact on each of our program administrators. We wanted to figure out a quicker way for our PAs to get data into our system." Cochrane volunteered to be a "Guinea pig" for the project.

Terry Castelli, business analysis consultant for Zurich North America Commercial, notes that some essential groundwork was already in place upon which Programs and Direct Markets was able to build. "Initially, Zurich built the solution for the business unit that services retail agents," he explains. "So when Programs and Direct Markets wanted to initiate its real time processes, they were able to leverage that existing technology, supplementing some of the ACORD tags to suit the market requirements in specialty auto."

Castelli says Zurich's IT team partnered with interface specialists NxTech on some of the ACORD translation details. "You need to have the right partnership when you're working through the ACORD standards and doing the testing," he points out. "It's not a simple matter of deciding that you want to implement a real time upload and all the pieces fall magically into place. It takes some effort but the timeline can be shortened through the use of ACORD standards, which provide the basic guidelines that everyone involved can agree on."

That's a message that Jeff Yates, executive director of the Agents Council for Technology (ACT), has been sharing with every segment of the insurance industry for more than a decade. In mid-2009, ACT joined forces with the American Association of Managing General Agents (AAMGA), the National Association of Professional Surplus Lines Offices, Ltd., (NAPSLO), and ACORD to create the E&S Joint Working Group (E&S JWG). Key among their goals is to improve the electronic exchange of information between industry trading partners and enhance workflows.

Cochrane & Company's Scott Montney is an E&S JWG member in addition to being on the AAMGA's Automation Committee. "Four years ago we were hearing from our carriers: 'ACORD standards aren't going to work. We're too special. We can't use that format.' I don't hear those comments anymore. There's more cooperation. A lot of the E&S carriers are realizing that now is the time to get some integration going," he says.

Impressive results

Montney says the initial goal of the project—to process quotes faster—has most certainly been met. "Last week I was talking to one of our underwriters," he begins. "He had a 110-vehicle fleet to quote. It was 15 minutes from the time he sat down to start the quote to when he was looking at it in the Z-Spire system. The upload capability has totally changed the way we do business."

In another instance, there was a 621-vehicle fleet. The C&C underwriter was able to pull the data out of the AIM system and upload it to the Z-Spire system. Not having to rekey the data translated to a savings of 62,500 keystrokes.

"We send 26 unique pieces of information for each vehicle across the wire to Zurich when we do an upload," he continues. "Some of those are just a couple of characters…a vehicle year, for instance. But the VINs—no one wants to type them over and over again. That's how mistakes are made."

In terms of how the account information is received from the retail agents, Montney says: "We would like to get account information and vehicle schedules e-mailed to us on ACORD forms exported from the retail agent's management system. But we'll accept the retailer's information in whatever format they want to send. If they want to use smoke signals, we'll get somebody to interpret that," he says with a laugh.

That "somebody" would most likely be Appulate, a vendor with whom C&C has a relationship, which translates the information into an ACORD XML message, Montney notes. That data is then fed into the proprietary tool that C&C's IT team built to handle the interface with Z-Spire.

Zurich's Terry Castelli points out that C&C's "sophisticated technology" had a direct impact on how quickly the project was completed. "They were able to place a user interface between their system and ours to gather some additional data elements needed in order to transmit a complete real time transaction. That required quite a bit of development work on their part."

When we spoke with Montney in July 2011, he said the C&C underwriters had about just over 12 months of upload experience to draw on. "Our six underwriters are sending some 150 quote request imports a month to Zurich," he proudly reports. "One of the underwriters in our California office uses this process to send in a single vehicle quote because it's that much easier."

Matt Burbach of Zurich sees benefits for all parties concerned. "It allows our PAs to really focus their resources on underwriting rather than rekeying data. It's added time to their day so they can quote more accounts."

From the carrier perspective, Burbach says: "It allows us to get our quotes into the marketplace faster; there's less duplicate entry and increased accuracy."

Building on success

"We're working to drive efficiency through the business and the process," Castelli says. "Part of why all this is able to work is that ACORD and ACT have pushed standardization, which helps. Before we implemented the upload capability, program administrators were doing the direct data entry into our processing system. Now they're able to stay in their own system. The upload significantly reduces the number of keystrokes. It's not just 'press a button and the transaction is complete,' but the number of keystrokes for the program administrator are greatly reduced."

Since kicking off this initiative with Cochrane & Company, Zurich's Programs and Direct Markets unit has offered the capability to other select program administrators. "Just because a PA wants the solution doesn't mean it will be a successful implementation," Castelli points out. "We look at the IT side at the program administrator to see whether they will be capable of implementing this. We don't want anything that's short of a success."

He says PAs can upload the following lines of business: commercial auto (which includes business auto, truckers and some lines of public auto), general liability, workers comp, and inland marine for motor truck cargo. Property is not on the list as of now. "We roll this out according to the desires of our program administrators," Castelli says. "At this point we don't have a program administrator that handles property that is ready to do this."

Based on the success of the project with Zurich, Montney says C&C is taking what it has learned from that project and using it to create a similar capability with another carrier for a book of dwelling fire business. "It's the same basic process where we scrape information and send it to the carrier so that it prefills their proprietary quoting system that we have to use." He acknowledges that this project is moving more slowly than the one with Zurich did because this personal lines carrier doesn't have the foundation already in place. "They're starting from square one," he says.

Montney concludes: "We're hitting this at the right time. This is going to really take off and we're fortunate to have been able to get in on the ground floor with some pretty important players."

For more information:

Cochrane & Company

Web site: www.cochraneco.com

E&S Joint Working Group

Web site: www.esjwg.org

Zurich Program Business

Web site: www.zurichna.com/zna/pdm/contact-us/contact/Regional+Sales+Team.htm