February 14, 2012

How do agents want to interact with the carriers they represent? While many industry observers assume that independent distributors prefer the agency management systems in which they've already invested, new research suggests this isn't always the case.

According to a recent study by New York-based Novarica and the Personal Lines Growth Alliance (PLGA), a Springfield, Va.-based trade association for independent agents, when it comes to writing business for their insurer partners, 42 percent of agents prefer a carrier's portal, versus 26 percent who prefer their own agency management systems (AMS). Twenty-nine percent of the respondents answered, "I like them both pretty equally," and the remaining 3 percent expressed no preference.

This was a surprise to Rick Gilman, the executive director of the PLGA, who tells Insurance & Technology that he believes the best method for independent agents is to use the AMS "as a single way of accessing and communicating transactions with the carriers that independent agents represent." Gilman points out the relatively small sample size of the survey -- it included 96 responses, representing just 20 percent of the PLGA's membership -- and says the study's findings run counter to what he has discussed in working with ACT (part of the Independent Insurance Agents and Brokers of America) and AUGIE (ACORD User Groups Information Exchange).

"It seemed odd that one survey would be so diametrically opposed to what we've been working on going back to SEMCI [single entry multiple company interface]," Gilman relates. "I'd like to get these questions answered by a larger audience to see what the true feelings are, and I will work with AUGIE and ACT to try to get some of these specific questions worked into some future surveys."

Despite the questions, Novarica is standing by the results of its survey. In fact, the company says the findings dovetail with what it has gleaned from other agent surveys. "This study doesn't get into the reasons for agent and CSR preferences, but it's consistent with our multiline study of more than 500 agents," says Novarica partner and managing director Matt Josefowicz. "We stand by the finding that agents and CSRs will gravitate toward the easiest and most convenient channels, and for most of them at this point, that's the carrier's own portal."

These split views were reflected in industry responses to a report Insurance & Technology posted in December about the Novarica study, "Agent Survey 2011: Personal Lines -- How Technology and Service Drive Carrier Choice," as well as in follow-up comments from a mix of stakeholders, including agent groups, carriers and vendors. Here is a sampling of some of the opinions shared with I&T:

"While many agencies operate in an AMS, there are tens of thousands that don't want to or can't fork over the five or six figures required to buy an expensive management system. Forty thousand dollars is not an unreasonable [cost] for that technology. We have an industry-leading proprietary quoting, servicing and information portal, and we continue to invest in that. We have to provide some or many of the capabilities that a management system may provide.

The challenge as a carrier is that it's different technology and twice as much work to have both options available. It's easier to have just a link into our portal -- we don't have to [implement] all the ACORD standards of all data streams and all the connecting web services to all the AMS processes. But if that's how an agent feels their office will run more efficiently, we've got to be there."
--Jim DeVito, Marketing Process Manager, Progressive (Mayfield Village, Ohio)

[For more on how insurance companies are investing in agent relationships as a platform for growth, see related story.]

"Agents don't want to work through bridges or faulty interfaces and then be required to validate every field passed over, enter missing information or, worse, reenter information that goes into the wrong fields. Complicating the matter of integration is the fact that each agency operates its business differently, and a real disparity exists among the systems they use. Then you add in the complexity of underwriting on the carrier side and the variations among carriers and the questions they ask of the agent to fully comprehend the risk. If the standardization and management of SEMCI were achieved, it would be a tremendous efficiency gain for agents, carriers and insureds.

If agents had the ability to go into their agency management systems, enter their clients' information once and not have to deal with the variations of multiple carrier systems, it would be a win-win-win scenario: Carriers would see more quotes from agents because submission would be easier; agents would have the ability to be more responsive to their clients' requests; and insureds would be provided more options to satisfy their insurance needs, in a more timely manner."
--Stuart Tainsky, SVP and CIO, PURE Insurance (White Plains, N.Y.)