The “E-Biz” Bandwagon

Thanks, Dave and Brian. That was a good presentation. Our members appreciated it,” Al said. I smiled at him, grateful that the presentation had gone down so well. Al, who in addition to running his own highly automated and successful brokerage, was also the current president of his local independent brokers’ association.

The association had asked me to speak to its members on our company’s move to full website functionality for personal lines of insurance. As my company’s senior marketing representative I called on many of the brokers who had crowded into the hotel conference room for this monthly meeting. For this specialized topic I had enlisted the help of Brian, one of my company’s senior IT managers. He had agreed to accompany me and to share the presentation.

Many of the brokers in the room did not have a contract with my company, but had come along to learn more about this fast-growing industry trend. Some did represent our company but had not yet moved to full web servicing, while others were looking hard at the whole question of becoming web-servicing brokers with other insurers and therefore had their own questions concerning every aspect of Internet development in our industry. Brian and I had spent the last 30 minutes outlining our company’s rationale for the move into web-based functionality. Now, the meeting was switching over to open questions from members, and we were pretty sure there would be plenty of those.

“All right,” Al said, rising to his feet at the head table and facing the audience. “Who’s got a question?” At once a forest of arms shot up, and he pointed at a broker who quickly fired off the first question. “Dave, can you tell us how many of your company’s personal lines’ brokers are web functional?” I got to my feet. “Last report I saw it was more than 75%. Some of them haven’t yet become fully web operational but we expect that within the next six to eight months our personal lines’ brokers will be in full web-servicing mode. Now, of course, they won’t all support it fully, but by the end of this year our company wants all transactions that can be handled by brokers to be done by them. Fact is, if you want a personal lines’ contract with our company now, you probably must be a web-servicing broker.”

“So do we have any options in how we process business?” a broker sitting to my right called out. I nodded, “of course you do. With a customer on the phone, you can directly access our company’s website and have the information processed. Or, you could make notes while talking to the customer and then process them later. However, we recommend you going straight into the web and processing the transaction right then and there. Later that day, your broker management system will be updated on the next download.”

Brian leaned forward at the head table we were sitting at. “Ultimately though, we’ll expect our brokers to process all transactions that are web-enabled. There would be no point in having this sophisticated system unless it’s used to its full potential because the idea is to reduce the number of delivery channels and not just add another processing option.”

Beside me, Al chimed in to the debate. “There are transactions we can’t process though, aren’t there?” I nodded my head at him. “Yes, there are, cancellations for one, and for a couple of reasons. One: at the company side we’ve decided we prefer to control such transactions. Two: the transaction functionality simply hasn’t been developed yet. But remember,” I added quickly, “one of the big advantages of our full web functionality is that all transactions are completed in real time and your broker management systems will be updated following the next download”.

“And as most of you know,” Brian added, “when you become a fully operational web broker, you add guaranteed quotes, plus policy issuance and amendments to all the other information available to you, such as billing schedules, payment records and the client’s full claims history”.

Al pointed across the room at another broker who had risen to ask his question. “What about commercial lines? Are they going to go the same route as personal?” I shook my head slowly. “Our company’s working on that, and I foresee that the simpler commercial business may go this route, but right now we, and the other leading insurers in the forefront of web-enabled business processing, are concentrating on getting the personal lines’ business working as efficiently as we can. Unless we do a good job on this, we can’t really expect brokers to be happy about a rush into commercial.”

As I finished, another broker got to his feet. “Is your company’s system better now than it was some years ago? I had a dedicated terminal that was hooked to your office. But it sure wasn’t a very user-friendly system. Every variable of every risk was represented by a code and we constantly had to refer to manuals to get the right code. My CSRs spent an awful lot of time jumping through multiple screens just to process a few bits of business. It was damn frustrating for them!” Brian gave the speaker a rueful smile. “Unfortunately, you’re right about that. It wasn’t a particularly intuitive system back then in those old green screen days. A solid brick city bungalow had one code, but if it was frame, or brick veneer, it was a different code. If it had a pool there was some other code, and if it was direct billed well, there was yet another code assigned to it.”

Another broker sitting directly in front of me got to his feet. “I had a dedicated terminal with another company – not yours. But their screen codes were all over the map too. In fact processing was so unintuitive I had only one person in my office who was trained to process the business. When she was sick, or on vacation, we had a problem. Although we were being paid a processing fee to handle that company’s business, I can remember times when we were just too busy, had key people away from the office, or got too backed up. In frustration, we just bundled up the business and shipped it to the company for processing.”

“Yeah, the concept was okay, but the execution wasn’t so hot!” The comment came from a broker I recognized. He ran a mid-size operation of mostly personal lines’ business. “Companies were pushing dedicated terminals at us so they could move the processing function over to us. But at one stage I had three of those one-company terminals in my office! Sure, we were being paid a fee to do this processing, but I still had to have one person in my office trained to handle each company’s processing requirements. That wasn’t particularly efficient or cost effective.”

Al cleared his throat and got to his feet again. “You make a good point. And let’s not forget that the stresses of a very competitive marketplace are one very good reason why the CSIO portal has come about.” Out of the corner of my eye I saw Brian listening attentively to what Al was saying, but he got to his feet as soon as Al had finished talking. “There’s a lot to be said for single-entry, multiple company interface, and plenty of us believe the CSIO concept could help take our industry to the next level of automation. But we also have to be aware that this depends on CSIO being able to offer in a fairly short time-frame, a system that delivers a broker-friendly system that is as robust and versatile as the companies’ web-based functions.”

There was a momentary silence, then another questioner rose from the audience. “Do the companies like yours that have advanced web-based systems have 100% flow-through processing?” Brian shook his head, “no, that hasn’t happened. My company, and the other companies that are as advanced as us, have filters in place. The filters are there to make sure the business flowing in conforms to our established underwriting criteria.” As he finished speaking, I saw a familiar face rise from the audience. It was Bob Davies, co-owner of a prosperous midtown brokerage. “Dave, before I committed to your company’s requirements for full web-enabled business processing, I had one internal headache to solve in our office. You see, the way my partner a nd I set up our internal business processing was to have one of our senior producers screen everything before it went off to the company – good, old-fashioned front line underwriting, if you will.” He shook his head gently and sighed. “Frankly, we were very reluctant to allow our customer service representatives to key direct to your company. We always had that nagging doubt at the back of our minds: what if our CSRs are committing us to business that doesn’t meet our risk appetite? Know what I mean?”

I nodded back at him. “I understand your early concern, Bob. It meant that you had to drill your CSRs in your own underwriting guidelines, then trust your people to follow them. I think it gets down to this, when you’re comfortable that the companies’ filters are stopping any questionable business from slipping through, then you’ll feel more secure in allowing your CSRs to process web-enabled business.” At this point I saw another familiar figure rise from the crowd in the meeting room. It was a former president of the association, a man known for speaking his mind. “We’ve been hearing a lot about what you companies expect of us. How about telling us what we brokers are going to get from companies when we hook up to full web function?” I stood up. “I think I can answer that, and Brian here will add anything I forget.” I held up my hand and flicked up a finger as I reeled off my points. “An end to mailing in documentation. Real time quoting, policy issuance and amendments, plus billing schedules. Full daily downloads of client and risk information from us to your agency management system. Extended hours of processing. Multiple site processing – because anywhere you can find Internet access, you can process business, so no more having to run into the office to get work processed.”

I glanced over at Brian and saw that he wanted to add to my list, so I sat down and he continued. “Dave was about to get to what I think are the most important factors from your perspective, and they’re what you should look hard at before you commit to one company’s system as opposed to another’s. Firstly, how easy is the system to use? How efficiently does it deliver? And does it offer first class online tutorial help and trouble-shooting?” He looked around the room. “When you run into a problem, you don’t want to feel you’re left twisting in the wind, it’s important to know that competent technical support is available either online via email, or by telephone via a no-charge 1-800 number.”

At the back of the room a broker stood up. He was smiling as he spoke. “Hey, we’ve learned a lot about how web technology works today, and I know the industry has made huge strides. But I’d be willing to bet we’re going to see some pretty dramatic advances in the years ahead. Can you give us any peeks into the future?” I pointed my finger at Brian. “I think my partner here is better qualified than me to answer that. But most of you already know that consumers – some of them your customers – are being tapped for insurance and financial needs by non-insurance institutions like banks and trust companies here in Canada, or by food distributors like Tesco in the U.K.”

Brian nodded, then carried on. “Well, how about pay-for-use car insurance?” he said. “In the U.K., they’re experimenting with satellite-based technology for car insurance buyers. With a global positioning satellite installed, a car’s usage could be tracked accurately every minute of every day throughout the year – where it’s being driven, and when it’s being driven. So, I guess it’s theoretically possible that in future you could buy coverage for your particular driving needs, and the GPS unit would monitor that the car was adhering to the driving limits set for its use.” He leaned forward over the lectern. “Maybe there’s even a way to integrate this GPS technology with the ‘On-Star’ system now installed on some GM cars. That’s an intriguing possibility…”

“And how about recording your claim via a personal digital assistant like a Blackberry?” I added, looking over at my partner. He smiled. “Sure, that’s another possibility, Dave. We should be able to find ways to integrate the information recorded on PDAs into our systems. After all, once the information is correctly entered, that process is complete. Then it’s just a case of transferring that information as quickly and as efficiently as possible.”

The room fell silent, and Al got to his feet once more. “Well, Dave and Brian, you’ve stunned our group into silence, and as you know that’s not easy to do,” he said with a laugh. “Thanks for coming along and answering our questions about full web functionality. It’s one of those industry movements that seems to have a lot of momentum. I have a hunch we’ll have to have you back next year to answer our questions about the next stages in its development”