A View From The Press Box

I just read Mr. Trembly's column about the apathetic agent.

Just to clarify, I have no doubt there are some apathetic agents out there who are not embracing technology. However, I believe the issue circumvents from the technology the carriers are developing in the first place.

The carriers are inventing, creating their Web sites and rating systems, yes. But they are failing to consider SEMCI from inception?

They are assuming the independent agent has the ability to learn multiple programs, Web sites, passwords and IDs for multiple carriers. This is very confusing and costly.

If the carriers are creating these technologies with SEMCI in mind, then that would be great. Most of the carriers I see are currently creating their systems while only considering the one-dimensional aspect--to get it out to the agents. SEMCI is the afterthought.

If more carriers would consider SEMCI from the start, then this might bring more agents to the table faster.

In my office, a CSR has to know five or six quoting system Web sites with initial sign-in and IDs. That they must learn each program independently of the other is costly and time consuming.

I was under the impression in talking with companies like AMS & Applied that they are simply waiting for the carriers to catch up and sign on to the SEMCI revolution. It's been available to the carriers for awhile now.

Ara's column hits a strong note with me and I couldn't agree more with him.

I'm an approved Ohio continuing education provider, with over 40 CE classes, and the common thread I'm hearing from my classes is the great frustration over "computers." They are costly, confusing and create many of our delays in delivering the final product, especially in commercial lines.

In my opinion, the greatest problem we have is a lack of a common computer system. My experience takes me back to 1975/76, when I was president of the Ohio Big I. The national Big I had a computer committee working on the "universal terminal system" and they were 95 percent completed to proceed.

At a general meeting of the committee, a representative of [a major hardware company] came into the meeting and said, "If we work with your group, we will lose all our insurance company business--and walked out of the room.

We still don't have a common system, where everyone is on an efficient system, and that is after 30 years!

The insurance industry should be ashamed of its inefficiency, and take stock of the many millions spent on proprietary systems.

If the Bill Gates of this world understood the mess this industry is in, he could solve it in short order, provided all interests acted for the common good of all agents/brokers and insurers.

I can't solve the problem, but with more columns like Ara's maybe something could be accomplished!

Keep up the good work!

I read Mr. Trembly's column with considerable interest.

For some time now, I have noticed a trend among insurers that is counterproductive for agents.

For example, not one of my accounts over $100,000 has all of their applications on ACCORD forms. This doesn't count D&O or employment practices liability.

That is a trend--for insurers to have their own application. Apparently the ACCORD applications are not sufficient for them.

When using these 'special' forms, I seldom find the information differs from ACCORD, but it's in a different format.

It is normal for a commercial underwriter to ask additional questions when given applications--even applications prepared by their own company. If he or she still needs more information, why the special application?

Agents have long been accustomed to additional questions to support applications, and rarely find this objectionable.

Why are 'special' applications a problem?

Who has the E&O problem when an insurer insists on an application an agent cannot enter into his management system?

How useless is an application that doesn't fit the mold on the management system? Yes, these can be added--at least some of them. But adding 20-to-30 'special applications' surely begs the question, and efficiency for the agent goes begging (pun intended).

Yes, insurers are making progress with single-entry, and personal lines certainly benefit, both on the company and agency side, but how many insurers here have their own 'special' application?

While insurers see how wonderful their systems are, none of them realize that 'only one small change' really is a serious problem for the agent's storage, retention and retrieval.

There is little uniformity in the commercial lines arena, and if anything, this trend is extending further, with additional problems created by the need to use E&S markets heavily over the last few years.

About the only area that absolutely should not be affected by this trend is the BOP, but even here, there are significant differences, and the ACCORD form is generally useless to agents, as almost every company has its own version.

We're aren't big enough as an agency to make the ACCORD forms be the only ones we provide to insurers, but surely those should be adequate--or insurers should require ISO to redo them.

Unless the CEO has researched his own company and understands this issue, and can state without hedging or adding conditions that they accept ACCORD forms, I am not willing to listen to his complaint. Because he certainly has not listened to complaints from agents.

Ara Trembly hits the mark in his Oct. 30 column, “Are Apathetic Agents Holding Back SEMCI?” He correctly concludes that the cause of slow agency adoption rates of real-time is probably not agent apathy but lack of awareness about real-time and how it can benefit them.

I’m frequently out in the field with agents, and I can attest that we continue to have a significant awareness problem about real-time.

Fortunately, the industry has recognized this problem and is addressing it. ACT and AUGIE spearheaded the formation of an all-industry initiative this summer (the Real-Time & Download Implementation Campaign)to get all segments of the industry working together on this issue—agents, carriers, vendors, user groups and agent associations.

This group is working to get the actual real-time transaction numbers out more broadly, along with the numbers of active agent and carrier users.

Because the numbers have not been regularly published, the progress we are making with real-time has not been recognized.

In fact, there are currently over 20,000 real-time inquiries and transactions per day, not including the real-time quotes being produced by the comparative raters.

We also need to get the message out that the agencies using real-time like it and are realizing significant time savings with it--time that can be used for proactive service and sales.

For example, 50 percent of Best Practices agencies are doing real-time inquiries with five or more carriers, and 37 percent are realizing “significant time savings” from this tool.

Meanwhile, 54 percent of Best Practices agencies are doing real-time rating with at least three carriers, and 45 percent are achieving “significant time savings” from this improved rating workflow.

Mr. Trembly challenges us “to get the posse out and spread the word on real-time technology’s benefits.”

He’s correct, and you will see the Campaign launch an all-industry marketing campaign for exactly this purpose in early 2007.

Agents will hear a consistent message promoting real-time everywhere they turn—-from their carriers, user groups, agent associations, and vendors.

You will also see more agency real-time training opportunities--both virtual and in person.

There is strong agent interest in the sessions taking place today, and it is very positive to see carriers, vendors, agent associations and user groups joining together to deliver them.

An updated ACORD “Power of Change” seminar will be launched soon to assist agencies in making the move to real-time and other improved workflows in their offices.

The Campaign will also develop tools to help agents implement real-time, including a real-time implementation guide and usage reports that will enable agencies to monitor their employees’ real-time usage.

Real-time represents the most significant technology opportunity agents have had in decades to move us toward the agents’ vision of SEMCI.

Real-time takes us out of the world of having to deal with a multiplicity of carrier Web sites and gives our employees the chance to finally achieve a common workflow through their agency management system or comparative rater.

Shame on us if we cannot convince our distribution force to move to this improved workflow.

Mr. Trembly, message received. The ball is now in the industry’s court.

Jeff Yates
Executive Director
Agents Council for Technology

Mr. Trembly's column and the discussions ensuing therefrom, continue building an outstanding 20-year case study of failure within an industry to solve a fundamental structural problem, and underscores the lack of imperatives to do so.

For sure, technology exists to solve the problem, which then begs the question, "Who benefits?"

A definitive answer to that question should point to where motivation for the solution lies. From there, it's a matter of responsible leadership.

I must note that many software companies are taking the SEMCI problem into their own hands. Many agencies are simply tired of waiting for carriers and others to take an unselfish approach to selling insurance.

Personal lines insurance seems to be making some headway, while commercial lines is lagging behind. Many software companies are now investing millions of dollars in technology to solve the SEMCI problem.

I suggest we stop looking for carrriers to solve the problem and take matters in our own hands by taking interest in software being produced by leading companies. Many of these companies can screen-scrape a carrier's Web site or use real-time ACORD XML transactions.

Agents are starting to take notice.

We concur with Ara Trembly and others who responded that lack of awareness, rather than apathy, is the real obstacle to SEMCI. In addition, genuine confusion and skepticism are probably major stumbling blocks.

The issue may not be that agents do not use real-time. Rather, it may be a question of which real-time or how many real-time workflows they use.

Agents are being directed into multiple real-time workflows and pathways by different carriers. In many cases, agents are directed into multiple workflows by the same carrier for the same transaction:

--Many carrier representatives push their own real-time Web sites.

--Some carriers tell agents to use a proprietary rater to get to real time.

--Other carriers say the agent can choose the carrier website, the proprietary rater, or an information exchange like IVANS® Transformation Station™.

--Still other carrier representatives are uninformed about just what their companies offer.

In other words, disparate approaches to real-time workflows lead to confusion, and this confusion can be misinterpreted as apathy or the cause of apathy.

This is not to imply that carriers deserve all the blame for the reigning confusion. They don’t always wear “black hats.” Indeed, everyone in our community shares the responsibility for cleaning up the lawless frontier.

We see hope in the joint effort of ACT, AUGIE, agent associations, carriers, software vendors, and ASCnet and other user groups with numerous initiatives under way to help agents understand and implement real-time transactions.

We plan to help focus on universally defining real time and emphasizing the critical importance of a single consistent workflow for agents.

In simple terms: All sales and service of the insurance customer begin and end in the agency management system. Any time an agent must exit the agency management system to enter a proprietary Web site, the real-time workflow is interrupted, and true real-time operation is compromised. When that happens, it costs agents time and money.

As all parties appreciate that the agency management system owns the agent’s desktop, the industry needs to stop promoting applications that require practitioners to exit the agency management system and log on to countless Web sites to transact business.

The industry has a responsibility to focus on developing a single workflow that eliminates the confusing messages swirling in the marketplace. For years, we have worked with ACORD to develop XML standards that contribute efficiency throughout the system, and we are committed to continue working with ACORD and others in the industry to achieve the single, consistent workflow that is a key component of true SEMCI.

--Doug Johnston, Executive Vice President, Interface Services, Applied Systems, Inc.
--Rick Morgan, Senior Vice President, Marketing & Strategic Services, Applied Systems, Inc.

I enjoyed Ara's column, "Are Apathetic Agents Holding Back SEMCI?"

As a regional P&C carrier, we also struggle to get our agents onboard to use the technology available to them.

We are considering a strategy to "reward" the agents that participate.

Agents that use technology to submit their new business and process their own policy changes will be financially rewarded through higher commissions or other bonuses.

The higher the percentage of their business handled electronically, the higher the reward.

The next step will be lower commission levels for those agents that choose not to use the technology available to them.