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Today, theres a tremendous amount of competition among agents and brokers. As a result, they need every tool they can find to remain competitive and to satisfy their time-sensitive, convenience-driven customers.

Agencies and carriers want the most cost-effective tools to assist agents with sales, but there are many to choose fromincluding wireless PDAs (personal digital assistants), ASPs (application service providers), IVRs (interactive voice response), Web-enabled systems, and e-mail. How can an agency find an integrated tool for its agents and underwriters to efficiently process and book more business at the right price?

Decision management technology, which helps to automate the process of making and managing decisions, may hold the key to bringing the capabilities of all these tools together. By simultaneously managing decision processes across multiple channels (phone, PDA or Internet) and automating up to 90% of new business decisions, these systems provide agents with the access to information and the decision-making capabilities to close business in a real-time environment.

Because of the hardening insurance market, premiums are increasing across the board, and clients are requesting quotes from many agents, brokers and other sources to get the best deal. In order to keep clients interested, agents need quick answers and responses to their new business inquiries. As a result, they want systems that can provide not only real-time quotes, but also policy recommendations and associated risk management services that their agencies, carriers or business associates can offer.

Helping clients select the right bundle of insurance products and services has been a challenge, when information is not effectively shared or delivered to agents in the field.

Decision management systems help to automate these decisions quickly and accurately, ultimately reducing new business processing costs. In addition, they extend an agents acquisition reach by improving productivity and minimizing new business and renewal fallout.

Available via an ASP model, agencies can access such systems without a significant increase in technology or the IT budget. Agencies do not have to invest in purchasing or licensing software, and they do not need to hire IT professionals to maintain or upgrade the system.

Todays decision management systems are also flexible and scalable, allowing agencies to retain control over their unique decision processes and policies. These systems do not lock agents into generic industry practices that yield no competitive advantage.

Instead, the systems automate an agencys unique business model and processes, so the agency can control the steps in the decision workflow, the business rules that move applications through the approval process, and the data input, scorecards, decision trees and other decision logic.

At any point, the decision engine will seamlessly interface with pre-existing systems such as point-of-sale, account booking, policy administration, provisioning, and letter generation programs. Perhaps more important, the system also interfaces with vital internal and external data sources such as client pre-approval lists, customer master files, in-house negative files, consumer credit bureaus, industry fraud and negative lists, and regulatory agencies.

Until recently, most decision management systems were only available at the headquarters office, where much of the application and approval process must be handled because of the extensive amount of data and computing capabilities needed. Producers are rarely there, however, because they are usually in the field meeting with clients and potential customers.

Some agencies have deployed cost-effective ASP versions of decision management tools that provide the flexibility for agents to work from home or from a laptop. Agents can then access the real-time decisions for business acquisition remotely.

“Desk” time, whether at the office or at home, however, can actually impair an agents ability to nurture client relationships, close business deals and respond to potential quotes and application issues. As a result, many agents are demanding ways to improve access to real-time quotes and expand their customer service capabilities from the road. Mobile capabilities are becoming an essential feature for decision management.

With sensitive client data and the expensive costs of deploying wireless PDAs agency-wide, many organizations are looking for alternatives that can still free up a producers time for sales and customer service issues, in addition to keeping new technology costs and associated training expenses to a minimum.

Since wireless phones have become standard issue for any producer, agencies are turning to Interactive Voice Response (IVR) systems as a way for agents to immediately access decision management advantages. Agents simply dial in by phone and input the customers information on the keypadgetting a quote, rating or approvalwhile taking an application with the client at the point of sale. This is an important service that is helping agents get more business and improve customer satisfaction with the application process.

These types of call-in decision management systems are extensively used in the financial and telecommunications industries to review and approve credit applications in real-time. Now, these systems can be highly effective in returns for the insurance industry. Because the systems are highly accurate in decision applications, the result is a high rate of policy acquisitions, with low associated costs.

These real-time mobile decision management tools are also important to reduce application fraud and credit risk for insurance companies and agencies. For instance, many insurers today are now using external credit data for risk classification, and this information is automatically being channeled into the decision engine.

By integrating sophisticated scoring technology into the decision management system, agencies can leverage the analysis of large amounts of data and produce an accurate risk score that indicates the level of risk inherent in the application.

This type of decision management product boosts acquisition rates and cuts costs by automating the entire decision process for the majority of new customer applications. This enables rapid response whether the business is coming in over the Internet, telemarketing, interactive voice response (IVR) systems, handheld devices connected to wireless networks or conventional channels.

When an application conforms to specified criteria, for example, online approvals can be returned to a customer in less than 10 seconds. When manual intervention is required, the system expedites the process by delivering the application to the underwriter with complete information on why the review was triggered, thereby aiding in an accurate and prompt decision and allowing the underwriter to get back to the agent as soon as possible.

Todays consumers have insisted that a live person be involved in the insurance purchase process, dramatically increasing the value of agents. Agencies and carriers must provide them with the sophisticated decision management tools to do their jobs effectively.

is executive director of decision management at HNC Software, San Diego, Calif.


Reproduced from National Underwriter Life & Health/Financial Services Edition, October 21, 2002. Copyright 2002 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.