Agents Struggle To Make Agency Management Systems Work

Independent agentsmost of whom are not computer expertsare spending thousands of dollars to upgrade their agency management systems each year, only to discover that the software they have purchased is not making life any easier for the 21st century office.

“In our office we try to keep up on the cutting edge of technology. We recognize the value of the tool,” observes Darlene Penfold, principal in Penfold-Leavitt Insurance Agency Inc., in Eureka, Calif. “It is a valuable tool and there is a tendency for [agents] to get caught up in technology as methodology. It is a tool.”

Penfold-Leavitt uses two agency management systems, Applied and AMS, says Penfold, who also serves on the Oakland, Calif.-based Insurance Brokers and Agents of the West media relation team.

One problem with the software is the need for constant upgrades.

“They are good programs and the vendors try to make improvements, however, they could improve more quickly than they are doing and create programs that accomplish tasks in a more efficient manner,” Penfold remarks.

One example she gives is an accounting report done on AMS software that requires the agency to go through a series of steps in order to generate a report. “This is dumb,” she says. “You should not have to go through this many steps to get a report.”

Some tasks, Penfold notes, were easier to accomplish in the DOS version of the software. (DOS was the dominant computer operating system prior to the introduction of Windows.)

While some may empathize with Penfold, the problems agencies face in running their systems may come down to not knowing how to work them inside and out. Having that knowledge is a matter of commitment in both time and money to learn the system, says David Lohnes, a Saratoga Springs, N.Y.-based automation resource consultant for the Professional Insurance Agents of Connecticut, New Hampshire, New Jersey, New York, Ohio and Indiana.

“The biggest thing about automation is that it is not an event. You dont get automated,” Lohnes explains. “It is a process, a continuous process that should be a line item on everyones budget.”

There are a great wealth of possibilities in any of the agency management systems available today, he says. While not endorsing any particular programs, he notes the programs vary in their ability to perform tasks.

Applied is one system with a wealth of capabilities from a customer service perspective, Lohnes says, but it takes a number of steps to accomplish these tasks, and that involves a lot of education on the part of the agency personnel, especially to learn shortcuts. Education, admits Lohnes, is something many agencies are not prepared to commit to in terms of either time or money. After the initial training period, he asserts, it is rare that agency personnel return for more training.

“It is a constant battle to keep that up,” Lohnes notes. “Training is never complete. It is the single biggest problem and greatest need, and it is expensive. The big concern agencies have is the cost of the system, but most never think that that cost is a price that is paid for. The real cost is in training and making changes in procedures.”

Lohnes recommends that, instead of thinking in terms of getting the system into the agency, turning on the machine, and being off and running, agencies need to take a long-range approach. Instead of believing everything should be running efficiently in a couple of months, his approach would have an agency develop its technology application, in an ideal world, over a three-year period.

The first year would be spent inputting data and learning to use the system. In the second year, Lohnes continues, the agency would learn how to use the data, and, “if the agency has a lot of time,” the agency would organize the data in the third year so it all looks the same. Typically, however, agents expect everything up and running normally in two months, he says.

Another issue is duplication, Lohnes notes. Agencies keep both computer and written records either out of fear of losing them in the system, or the inability to break old habits.

“These are some of the issues the majority of agents do not think about up front, but learn after the fact,” says Lohnes, who has run into the situation “dozens and dozens of times.”

If agencies take the time, there is a payoff. One agency that has taken the time is G.S. Newborn & Associates Inc. in Flemington, N.J.

The agency spent five years working to integrate its technology in one location before moving into a second location, says Gary Newborn, president of the agency and of the Independent Insurance Agents of New Jersey. He credits his staff with making the technology work.

“We looked at the number one reason to utilize the technology system and we decided we wanted to go into it to improve relations with our clients,” says Newborn. “From an operational standpoint, we look at new ways of doing business. Today we do everything we used to do and tons more with the same time and staff.”

Mark E. Ruquet is an assistant editor for NUs Property & Casualty/Risk & Benefits Management Edition.


Reproduced from National Underwriter Life & Health/Financial Services Edition, August 13, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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