A RISKY BUSINESS

As I approached the first aisles of the “Exhibitors’ Showcase” it occurred to me for perhaps the sixth or seventh time just how technologically advanced our business had become. The three-day-long brokers’ convention had started, and half of the convention floor in our city’s largest hotel had been converted into an impressive showcase of computers and printers, advanced software, broker management systems, digital imaging devices, cell phones and technical gadgets by the bushel.

As the company’s senior marketing representative I was expected to be a visible presence at the convention, to help out in our hospitality suite, and to make contact with those brokers in my territory who were attending the convention. It was not yet mid-morning, but already the exhibit floor was crowded with convention delegates.

As I stopped beside a gleaming exhibit where a new broker management system was being demonstrated, I saw a familiar figure nearby staring intently at the computer screen and writing on a notepad. It was Al, a fifty-ish broker who operated in a town of 75,000 some 160 kilometers from the city. He had represented our company for many years.

“Window shopping, Al?” I asked.

He turned to me with a smile and flipped his notepad shut. “I call this risk management, Dave,” he answered, and when he saw my raised eyebrows, went on. “Risk management is supposed to be the science of reducing the chance of disaster, cutting down the possibilities for catastrophe. Well, that’s what I’m doing.”

He closed the fingers of one hand into a fist. “The risk I manage is my business, my brokerage. It’s a pretty successful one, but I’ve kept it that way by managing the risk as best I can. By hiring good staff, by computerizing, by adding good software, and so on.” He waved his hand at the exhibit area. “That’s why I come here – to find out what’s newer, what’s better, what’s more cost-effective.” He smiled again. “It’s my own risk management program at work.”

We walked together down another aisle of the exhibit area and Al glanced sideways at me. “For instance, my visit here this year has convinced me that it’s definitely time for me to go transactional. Been putting it off for years, but my senior CSR has convinced me to bite the bullet.”

Al had a sizeable chunk of personal lines’ business, plus a number of large farms and some commercial. Although he wasn’t one of our major brokers, he gave our company a decent slice of good business and serviced his clients conscientiously.

“I bought a good broker management system some years ago,” he said. “The vendor has already told me my system is powerful enough to handle my going fully transactional. The real problem is me. I guess I’m emotionally attached to the good old client file system.”

I nodded. “Some brokers still are. But the advantages of transactional are pretty overwhelming.”

Al held up his hands. “Oh, I know, Dave. My senior CSR has run them by me fifty times already.” He began to raise fingers one by one as he reeled off a list of advantages. “Productivity increases because there’s faster turnaround of transactions: almost no wasteful time spent filing or re-filing, or looking for files. More effective use of staff because anyone can take any call and bring up the file of the client who’s on the phone. Huge reduction in paper-handling time. Better control of operations because all those pre-defined activities don’t let you forget important tasks, since they not only document what’s been done, but follow-up for you just in case your memory fails. And, of course, less frustration in hunting through inches of paper clipped and stapled together in files –“

He paused for a second and I jumped in. “Greater security of information too, Al. No more loose file folders lying around the office. Plus, moving to transactional means that you have really made your own commitment to insurance’s electronic revolution.”

As I spoke, a figure detached itself from the crowd around us and a cheerful female voice rose about the conversational hum. “Revolution, Dave? I know you marketing reps can be revolting at times — but revolution?”

Facing us was Joanne, co-partner in a thriving suburban brokerage and as outgoing and efficient as she was direct.

Al’s the one who’s going radical,” I said. “He calls running his own brokerage his personal risk management project. As part of managing the risk better he’s made up his mind to go fully transactional. He just hasn’t decided when.”

Joanne gave Al a quizzical look. “Risk management, eh? I like that. I guess we all manage the risk of being in our business as best we can.” Then she reached over and squeezed Al’s arm. “Let me guess. You’re probably wondering if you should go all the way in one step, or whether you should ease your way into transactional operation. Am I right?”

Al stopped dead. “Joanne you’ve been reading my mind. I decided to visit two business friends of mine I play golf with in the summer. They’ve both gone transactional. Their operations are roughly the same size as mine, maybe a little bigger.” He shook his head. “Funny thing was – these two guys each took a different approach. One just set a date and on that date jumped fully into transactional, the other took the phase-in approach.”

Joanne looked over at Al and smiled. “None of my business – but why didn’t you take your senior CSR along with you?”

Al stopped in his tracks again. “Dammit, you’re right! That would have been the smart thing to do.”

“Everyone’s got twenty-twenty vision in hindsight,” Joanne said as we began walking again. “But tell me about that phase-in operation.”

“Well, all his daily client activities were logged on their system screens, but they still maintained a paper client file. For a few weeks the CSRs left their bundle of client files in their work areas in the usual way.” Al shrugged his shoulders. “Apparently it became obvious pretty soon that there was no sense in keeping the paper client files, so they just stopped. That was it — they were fully transactional.”

“Why the phase-in?” I asked. “Was he unsure of his staff’s ability to adjust?”

Al shook his head. “No, he told me it was mostly to give him and his staff a comfort zone. It allowed them to plan ahead in stages. It gave them a window they could back out of, or modify, at any time. When they actually switched to pure day filing it was really a minor transition for them all.”

“Hey,” Joanne said with a laugh, “different strokes for different folks. Tell you what I did. We set a target date to go transactional. For four or five months before that date we staged weekly all-staff meetings. We encouraged everyone to air their views and concerns and to share their ideas. That way, nobody felt they weren’t consulted, and I think we all learned a few truths about how effective or non-effective we can be at times.”

By now we had reached an open section of the exhibit hall where chairs and tables were scattered freely among the hotel’s potted palms. We had barely got comfortable when I heard a high-pitched giggle from Joanne and followed her pointing finger. Advancing in our direction was the burly figure of Harry, who ran a successful brokerage in the city suburbs. He was balancing four large cups of coffee on his briefcase as he walked gingerly towards us.

“I thought I should do the right thing for this tired-looking group,” he said, passing each of us a cup. “You all look damn serious. What’s the topic today?”

“It’s risk management,” I replied. “Coping with the many risks of being in the insurance business.”

Al grinned at Harry. “I want to kick the paper dependency habit and go transactional. Not too many of us old traditionalists left any more, but I’m just agonizing a little.”

“Not over the ‘why’, though?” Harry queried and got a shake of the head from Al.

“Nope — it’s just the ‘how’ that bothers me a bit – saying goodbye to those comforting pieces of paper.”

Harry took a sip of his coffee and sat down. “Well, we can’t completely escape the paper trail, but when you go transactional you cut down to one daily activity file which has various paper items in it. In our office it gets filled the next day. One person picks up all the hard copy stuff from every desk around ten in the morning — takes about four minutes flat. That file is then day-dated, and that’s it for paper. Everything else we need to know is available on our screens. We haven’t had a paper file for any of our customers for four years.” He looked over at Al. “To be honest with you, I now trust what’s on my screen more than a loose sheet of paper with notes on it.”

Beside me, Joanne sat forward in her chair. “It’s a great system, all right, but you shouldn’t think of going transactional as reaching some magic problem-solving goal. It simply means you process work one way — electronically — instead of trying to juggle paper and electronic data together.”

Al nodded thoughtfully and Harry went on. “Another big advantage of transactional: your phone line gets you in to all your office files. I can dial into my system from home. I can be talking to a client in my living room and updating his screen in the office fifteen kilometers away. Or, if I get a call at home, I can start the claim process right away. No more coming in to the office on Monday morning with a briefcase full of paper notes and scribbles.”

“You’ll probably find some side benefits, too,” I added. “A couple of brokers in my territory were amazed at how much surplus filing space they wound up with after going transactional. In fact, one of them figured he could have kept five years’ worth of client information on site if he had wanted to. He didn’t, of course. He kept the past two years only. The rest he shipped to off-site storage.”

A small frown had settled on Al’s normally placid face. “What about those old client files?” he said, looking around us. “Shouldn’t you keep them close by in case they’re needed?”

“You’d be surprised at how little they’re used.” It was Joanne speaking. “We keep ours in a locked room in our office. Access is strictly limited so the confidential information is secure. When I first went transactional I still had a couple of older staff who were uneasy and tried to do things the old paper-intensive way.”

“So how did you handle that?” Al asked.

“Easy,” Joanne replied. “We installed a simple register on the central file so that every time anyone took a paper file out, they had to record the fact – plus the reason for getting it out. When we reviewed why people were getting out these files, it soon became obvious it just wasn’t necessary.”

“Okay, I’ll buy that,” Al said agreeably, setting his cup down on the floor. “But I have another question. What about all those special pieces of paper: house evaluations, driver-training certificates, photos of risks?”

“No problem,” Joanne answered. “Remember, the transactional process has two sides to it: one is information, the other is a reference to a hard copy item. For instance, your screen tells you that you received an item from the insured. Let’s say it was a driver-training certificate. The screen will tell you that you’ll find that item in the activity file of that day, or – if you’re a technology freak like some brokers I know, you’ll have digitally photographed that item. The screen will remind you of that fact, then it’ll retrieve it for you.”

“It all sounds pretty convincing for my personal lines,” Al said, nodding his head. “But what about commercial?”

Harry’s voice cut through the momentary silence. “Good question. And the short answer is commercial’s different. Fact is, you pretty well have to have to retain a paper file, because if you’re going to take a commercial risk to market at renewal time, you need all the information in one spot: the inventory, the balance sheet, the correspondence, the company quotes, the whole ball of wax.”

“Well, it’s nice to hear there’s still room for a dependency here and there,” Al said with a laugh.

“Speaking of dependency,” I said, getting to my feet and looking towards the banquet hall. “My stomach tells me it’s lunch time, folks. Shall we?”-