WOW!

Automation is HOT, HOT, HOT

by Ron Webber

I have two stories to pass along to you this time.  I will not spend a lot of time on the first one because I feel sure it will be widely reported starting with the Florida Specialty Agents magazine, UNITE.  Rich Hill, president of the Florida Specialty Agents is to be congratulated on finally pulling off a two hour meeting with concerned agents, insurance company personnel and software vendors of comparative rating and agency management software.  I finally witnessed an agreement that we are headed for disaster, if we do not join forces and approach the subject of making Single Entry Multiple Company Interface (SEMCI) a reality.  The consensus was that something has to be done, and quickly.  The enemy is not your competitor whether you are an agent, company or vendor, the enemy is the direct writer, who is literally tossing you out of the car as they speed past. 

By the way, hats off to Allstate Insurance for their national ad campaign benefiting all agents.  The one that shows the agent walking through a disaster scene looking for his friends, neighbors and insureds, wondering who is looking for those people who have switched to the 800 #, direct, and internet writers of insurance.

If you are not a subscriber to Unite magazine or Spokes (national magazine of the National Alliance of American Agents) then try to obtain a copy of the article written by Rich Hill.  The objection of companies concerning trusting the comparative raters, and the latest credit scoring debacle can be and has been resolved.  The use of any rater that moves to a common application writing and upload program and then to agency management software is a reality.  When I spoke to an insurance company president following the meeting he said, “if this works and this is what my agents want, I am on board.  Plus, I would be foolish not to spend $30,000 for this process compared to many of my fellow companies that have spent $1,000,000 on programs that do not work.”  Simply put agents are tired of being subjected to proprietary software that is totally different from the other 10 they already have had to learn.  Agents are now standing up and saying, “I want to enter a driver’s license one time and not have to re-enter it over and over again.”

Companies were told that the quote from the comparative rater can be re-rated in their proprietary software before the upload, credit scored and MVR is ordered.  The application can then be uploaded to a firewall server and picked up by the company immediately, or at a later time, and integrated into their system with out any further entry.  One question, concerning which standard (AL3, etc) will be used is now a moot subject, since the software asks the company specific questions and produces the company specific applications.  Plus, it produces automatically any other company specific forms such as endorsements, vehicle inspection, doctor statements, etc.  If your company is the only one that wants to know, “Do you have a cell phone?”  You will get your requested data, yet the software looks the same to the agent user.  Cross your fingers folks, this could be HUGE!

Now, my second subject, automation really is more productive.  My readers have seen me saying that over and over.  I am going to relate a story to you that should bear me out. 

This is about an agency that I helped implement automation about 18 months ago. Already a successful agency, they knew there must be a better method to handling this paper monster we call insurance.  They purchased The Agency Advantage software and contacted me to come to their offices. 

They had six (6) offices and were already attempting to do centralized processing of all their paperwork.  They made a commitment to get all six offices on line with the central office using the Citrix software technology.  They were committed to getting rid of the old paper manual files by doing to a combination of transactional filing and document imaging (scanning).  After a week of training and implementation, I left with a good feeling that these people really listened and committed to making automation work for them.  But all the automation and computers in the world are no good unless the result is a combination of productivity, profitability, and what I call peace of mind, that I am not creating an E & O monster.

Well, here I am back for a review of their implementation of true centralized processing and to evaluate their uses of the software and make suggestions for the future.  As they are embarking on bringing on six more agencies that they own as a corporation. 

What I found was truly remarkable.  Not only had they done it right and accepted the changes, they had taken it to a new level.  When Jack Nickalus saw Tiger Wood’s performance at the 1997 Masters golf tournament, his comment was, “he is playing a game that I am not familiar with.”  The Agency that I was visiting were achieving results that I am not familiar with in such a short time frame. 

Here are the numbers, you decide:  Six offices, $12,150,000 in premium volume, 14.5% average commission, 81% retention of all commissions, 14 writing agents averaging $867,857.00 each, with 5 agents averaging over $1,200,000 each.  They are writing over 1200 new applications a month, and renewing policies at a level that would make your captive agents envious.

The amazing thing is that they accomplished this with six support personnel.  All mail is handled and entered in the system within 24 hours.  They have no paper customer files.  It is all electronic and declaration pages are imaged and other necessary documents are transactionally filed by date.  In interviewing the support staff, they had no complaints about the system or their ability to find any document immediately.  Agents in the remote offices have the access to the same electronic files and images.  Receipting, depositing, and processing have been simplified and cross training allows the operations manager more time to address human personnel problems and not who has the file?  Where is the application? All those questions we all hear in every insurance agency in America.

I must thank them for letting me share this data with you, they are very proud of how far they have come.  The principal is looking forward to the new challenge of adding six more offices on line, Another goal of centralized quoting, where phones will not ring in the remote offices ever again, is a reality that was started during my visit.  After that they will try to take it to a new level. Where the very best and focused agents start writing upwards of $2,000,000 per writing agent.  I believe he will make it.  By the way, let me add that he doesn’t enjoy the benefit that most of you share and that is a comparative rater system to import his quote data.  They have to take the extra step of manual entering all the policy information instead of bridging comparative rating data.  I know he is pulling for the same thing that I am, the first story of SEMCI.

Remember "Automation equals Productivity and Profitability."

If you have any suggestions of articles on Automation in Insurance agencies, or comments please feel free to contact me.

Ron Webber

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