Why do I need an Agency Management System?
(Don’t the Companies Download Everything I Need?)

by Ron Webber

It seems like every day another insurance company wants you to go on line with their software for uploading apps and endorsements. Some companies are even downloading your entire book of business with daily updates to your computer desktop and many are giving you instant access to the same type of information over the Internet. Calling the company and wasting valuable time holding to talk to a CSR is no longer necessary. This is a tremendous tool for the independent agent and is certainly a step towards the truly automated agency. Some day maybe all insurance companies will have
instant information and downloads of daily mail available on the Internet and the paperless office can become a reality.

So the question becomes: With all of this automation available from the companies, why do you need an agency management system in your office?
Instead of just giving you my opinion, I will pass on what industry experts and agents are saying about this issue.

(From James Moore, riskindustry.com) “It's a good question. I was recently speaking with the president of an agency management system vendor, and one of his concerns was whether the Internet was making the need for an agency management system obsolete and what the role of a management system would be in the future.

Personally, I think SEMCI (single entry, multiple company interface) might be an unattainable goal. I also think it's possible that it might not even be the most efficient or desirable way to do business.

As for the "why" of buying an agency management system, I think that it comes down to looking at an agency management system as just that a "total" agency management system --- not just a transaction processing system. I can see the agency management systems of the future being more of marketing and accounting system, with "gateways" to the transaction and data capabilities of the carrier's websites. The management system becomes more of an EIS (executive information system) or an EAP (enterprise application portal) or a CRM (customer relationship management system) and the processing side of things is done more directly with the carriers' systems.”

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(From Kathy H., an agency management user) “Lots of reasons! You don't have to get up and down pulling file folders; it's all on the computer. Also, the bridge over feature from comparative rater is great, it automatically sets the customer up for you in the agency management system. It (the management system) makes EFT's and check processing simple and quick. And we love the commission reconciliation. There are many other reasons but these are the features we like the best.”

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(From Agency Owner Tom) “I think that the most important reason would be to have all of your information in ONE spot. This way you would not have to keep learning a new system every time that a company decides to start ‘giving it to you on the Internet."

From Multi-Agency Owner, Eddie) “The answer is obvious. We need our info sorted and compiled not separated into proprietary individual databases which are presented in a myriad of fashions. Agency automation systems are more than access to carrier policies ... much, much more!”

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(From New Agency Owner & Management System User, Chris B.) “While pertinent information about a given company’s policy is certainly convenient, I do not believe it will be a substitute for an Agency Management system. The company policy access at their whim may limit the information about your customer that you may obtain. They may not allow you to instantly print important documents.
They certainly cannot assist you in managing the day-to-day operations of the agency (receipts, deposits, letters, images, etc.,) Think of the simplicity that the management system gives me when reconciling my commission statements. This would be impossible if I depended only on the company system. My thoughts are; the company systems should only be used to supplement the agency management system.” 

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(From Eric, Agency Chain Owner) “Even with company downloads, I would still be hip on the agency mgmt software because of its time saving attributes for our day to day activities and managing information for our future growth. When you can get snapshots of activity for any number of days, weeks, or months this info is invaluable for our decision-making process. It would be wonderful not
to have to process declaration pages, endorsements and cancellation notices each day just download it but as I said before where are you going to put it?” 

These statements are insightful, and I believe, accurate. Let me sum up the answer to this question for you and give you some points to think about:

• 1.You can't see the whole picture unless you run your own production reports.
• 2.Will the companies be diligent in keeping the information you want
  correct? (A nice way of saying "Do you want to trust the companies to keep your records?")
• 3.Does accessing their web site eliminate your need for files? If
  so how can you see your customer's history with your agency? What if you write him with several different companies over a period of time, how will you see that history of his business with you?
• 4.The same question for multiple lines of coverage. Split coverage on auto: Liability with one company and comp/collision with another. Maybe you write his auto and home / boat / motorcycle / small business.
• 5.How about E&O prevention? How will you document your conversations, transactions and follow-ups if you only use company software & web sites?
• 6.How can you possibly streamline your office procedures if you are relying on information that has to be assembled from multiple programs and/or websites?
• 7.How about cash / EFT / check management & processing? Trust account management? Employee theft prevention?
• 8. How about ownership of the customer? The company cancels the agent's contract and along with that access to his customer information.
• 9. What about those companies that are not yet offering full access to the customer data?
• 10. Do you want to be totally at the company's mercy as far as
  access to your information? You can maintain your own data and hardware to assure maximum uptime, but the company has little risk if you cannot access your data because their system is down.

I think the answer is obvious: To properly run and manage your insurance agency, a good agency management system is absolutely necessary.
Automation will make you more productive. Automation will make you more profitable. Automation is the management tool you need to manage your agency and succeed – If you are going to remain independent and in business!

Until next month, keep automating those agencies; I really believe the only way that you are going to survive in the 21st Century is to automate. 

Remember, the bottom line is "Automation equals Productivity and Profitability."

Ron Webber

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