Business Process Integration Can Help Solidify Carrier-Agency Partnerships
Historically, insurance carriers have struggled to keep pace with the demands of highly productive agents, who in some cases can single-handedly write enough business to impact the carriers bottom line.
Agencies choose carriers based on their ability to generate revenue by selling the carriers products. The specific products and pricing factor into this equation, of course, but if the carrier and agency do not have a good collaboration strategy, operating costs will eat into profits and reduce the carriers attractiveness.
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Agencies have indicated that in situations where products and pricing were competitive, ease of doing business is the most important factor in carrier selection. If the carrier cannot provide good service, agencies may find other carriers who are easier to work with. For this reason, carriers can miss opportunities to add to their book of business if they are too slow to provide quotes, issue policies and endorsements, or respond to agency requests.
At the root of the collaborative issues is the inability to integrate agency and carrier technology, including agency management systems, as well as policy, claim and underwriting applications. In addition to their internal applications, carriers rely on dozens of external systems or service bureaus for motor vehicle reports (MVRs), credit reports, background checks, and so on.
To illustrate how pervasive integration problems can be, consider the simple agency process of providing quotes from three different carriers.
Typically the agency must log onto three separate carrier Web sites and enter the same information three times, perhaps in three different ways. Some quotes may be handled in real time, but other quotes may take a day or two.
This forces the agent to wait before providing all the quotes to the customer.
When it comes to more complex processes such as issuing policies or certificates of insurance, these integration problems are magnified tenfold.
To solve these inefficiencies, agencies are working towards SEMCI (single-entry, multiple-company interface)in other words, using a single system such as an agency management system to send data to multiple carriers. Critical to this effort is the ACORD XML standard for transmitting insurance data electronically.
Also assisting are intermediaries that provide value-added communication mechanisms that use ACORD XML to broker transactions between agencies and carriers.
Most carriers have not leveraged the full value that these intermediaries and standards provide, but some experts believe it is only a matter of time.
It is not hard to envision how carrier-agency partnerships can be improved dramatically by the ability to transmit data electronically.
Agencies that have made substantial investments in technology rapidly are separating themselves from the pack. They are demanding real-time or near real-time transactions, because they know the framework exists to make this a reality.
Carriers feel the pressure to improve service by making the same type of technology investment. Carriers know that price is not the only differential in a customers decision; customers want agents who can provide professional counseling and top-notch customer service. If the carrier takes three hours to give an agent a quote or six weeks to issue a policy, the customer will consider this a deficiency on the agents part. The ensuing repercussions to the carrier are obvious.