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The Time is Now for Commercial Real-Time Rating
How agents and carriers can benefit from Real-Time Rating today, and help it grow and evolve for our future
About this article: Agencies using commercial lines real-time rating are saving enormous numbers of keystrokes and time. This article shows the progress that is being made in commercial lines real-time rating and how agencies and carriers can implement it today successfully. The industry’s Real Time/Download Campaign has identified increased implementation of commercial lines real-time rating as one of its two key priorities for 2014. The article makes a great case that now is the time for agencies and carriers to implement the technology and for agencies to start to use it today with any carrier that has it available.
 
The Time Is Now for Commercial Lines Real-Time Rating 
 By Thad Bauer, NxTech, Inc.
 
How agents and carriers can benefit from Real-Time Rating today,
and help it grow and evolve for our future
 
 
 Little girl on road.jpg

Where would we be today without the evolution of the Interstate Highway system? We had roads – we could have remained complacent – but think of the time savings and efficiencies we now have due to Interstates. It took 35 years to be considered “complete,” but there are still sections that aren’t complete; roads are being widened and extended, repaved and changed. And yet, this one initiative has been a major contributor in making the United States a world economic superpower and a highly industrialized nation.
 
So you are asking yourself, what does this have to do with insurance and real-time rating? If we hadn’t broken new ground and then traveled the roads and bridges that were built, the next generation of roads would not have materialized, and this young girl would still be standing there. 
 
So where are we with Commercial Lines Real-Time Rating? We may still have some bumps in the road, but it is very usable now and will continue to evolve. And, it certainly does not need to take anywhere near 35 years for it to be considered complete. It also promises to add significant efficiencies to our distribution system and to help the agencies and carriers which implement it position themselves as modern, efficient businesses – our version of an economic superpower.
 
Let’s take a drive.
The type of road and the route you take between agent and carrier destinations may vary. You may use a bridge, you may take the superhighway (where a rate is returned directly to you), and you may make a quick stop on the way. That’s ok, and that is how we move forward. 
 
The one thing that is constant is that this is real; implementations continue to evolve and agents are getting value. We are seeing success across the board from BOP and Package, Commercial Auto, Worker’s Compensation, and other commercial monolines. The amount of data that is being moved in a real-time quote is tremendous, including large schedules. Whether an agent starts in their management system and uses TransactNOW or Transformation Station or an MGA or broker who has implemented ACORD standards to pass policy data to their carriers, these roads are ready for travel.
 
Here’s what agents may find on their drive.
 
Real Time Quote Bridge (also known as ‘rating bridge’, ‘bridging’, ‘real time upload’):
With a Bridge the agency can ‘bridge’ the data for a quote from the client file in their agency system to the carrier, eliminating the need to rekey data in to one or many carrier websites. The agent then typically completes the quote at the carrier site. This is not a website sign-on from the agency system; this is bridging the extensive amount of data that would otherwise be keyed manually.
 
Carriers can respond with a link in HTML that automatically launches the agent user to the website and drops them in the quote with the bridged data, providing one continuous workflow. By imbedding the agent credentials it eliminates the need for the agent to sign-on to the website.
 
In the recent 2013 Real-Time/Download Campaign Agency Survey, agents said the number two improvement priority was to reduce the number of quotes that error out. The primary reason errors can occur are from either passing values that are not valid in the carrier system or having missing data that stops the entire quote from bridging. 
 
Here are some examples as to how carriers have resolved transactions erroring out:
§  If a limit or deductible is not an available value for that carrier, they do not error the bridge but instead based on rules default to the next highest value and provide a message back to the agent describing what has changed, or blank the value to be completed at the website. 
§  If required data is missing, a carrier can dynamically evaluate the data, and either display a page to the agent to collect or change the critical pieces of data, or they can default the missing data based on defined business rules. 
 
The goal is to get the data that exists bridged, and the rest of the rating rules can happen in the website.
 
Why Rekey When You Can Save These Kinds of Keystrokes?
ü  An agent was able to pull the data for a 621 vehicle fleet from his agency system and send it directly to the carrier system.  Not rekeying translated to a savings of 62,500 keystrokes.
ü  One company estimates agents experience a 98% keystroke savings by bridging commercial lines quotes versus starting in the website.
 
Real Time Rating (the Superhighway):  
For true rating, every piece of rating data needs to either be available from the agency system or needs to be defaulted or retrieved from other sources. Carrier systems need to be capable of processing the data in real time to return a rate and quote proposal. The goal is to stay out of the carrier’s proprietary system. In reality though, this ideal scenario across commercial lines is rare. 
 
This doesn’t mean we have hit a dead end. There are successful implementations emerging that are using technology that is available to provide the same result – a rate and quote proposal back without the need to go to the carrier website. 
 
It may require a quick stop along the highway, but it paves the way for change. Here’s a snapshot of what some of these look like.
 
Some carriers are streamlining the agent process by creating procedures that review in real time each quote and compare it against business rules. With the technology available today, by interrogating the ACORD XML data we can dynamically present a screen to the agent to gather only the missing information for a specific quote that requires agent input. The benefit to this approach is that the agent is only answering what is necessary, and the company is not maintaining rules in multiple places. Carriers are keeping the data input to a minimum, and they default values wherever feasible. 
 
That’s the quick stop along the highway. Behind the scenes the additional data that was collected is added to the agent quote request. Defaults are applied based on rules to bump or roll other data before submitting the rating request. Quotes are then returned within seconds, including an accurate rate and PDF quote proposal. The agent doesn’t need to move to the carrier website, an accurate quote is returned, and errors are minimized. If the data submitted surpasses the bounds of the business rules, we bridge what we can, which still saves the agent duplicate entry inside the website.  
 
What is important from the carrier’s perspective is they are still maintaining rules in one place, which also benefits the agency from an accuracy perspective.
 
The implementations that are emerging are not just for single location or vehicle risks. For example, Millers Mutual real-time rating includes larger habitational risks with as many as 50 locations and hundreds of buildings.
 
An Agent’s Viewpoint
According to Laura Bankos Kury, Vice President of Collens-Wagner Agency, Inc., "I find the approach that Millers Mutual has taken to be most efficient for my agency. Using my agency system and Transformation Station to quote, I get a BOP rate back without rekeying data or ever going to the website."
 
Why Are Different Routes Necessary As Part of the Evolution?
Just as agents are independent and use different systems to run their business, so do carriers. And just as each agency has different system capabilities, the carriers have different rating system requirements and capabilities. As a result, each carrier may plan their trip differently. That does not change the destination.  What it does is provide a road map for progress and efficiency gains along the way.
 
How can agents switch into overdrive? 
This leads in to some of the feedback from agents in the 2013 Real-Time/Download Campaign Agency Survey.
 
Agents that are using Real Time clearly saw the value, citing the top three benefits as:
·        Saves many keystrokes
·        Significant time saver
·        Easy to use.
 
These are great benefits that should have the industry excited to move forward, so why can’t we get more agents out of first gear? 
 
In the same survey, agents that were not using Commercial Lines Real Time were asked to cite the top three reasons why. Here are their responses and some of my thoughts.
 
·        Agents:  No consistent real-time comparative rater for commercial lines. 
Ø  I agree they are not prevalent for commercial lines, as they are for personal lines, but I don’t know why that should stop an agent from using real-time rating. You are still quoting today, and you are rekeying commercial lines data that exists in your agency management system to get a quote. Wouldn’t you rather use the data in your system than rekey the same data in to multiple websites? 
 
·        Agents:  Too few carriers. 
Ø  We should shout out to the world about the carriers that do provide this functionality.  Why not use what is available and realize significant savings now? Don’t wait for the road system to be 100% complete, that won’t happen. (There is constant road construction in this country.) More use means more roads will be built.
 
·        Agents:  Easier to go to website. 
Ø   Really? Granted workflow changes can present challenges. (Have you ever bought a new car where the gas cap switched sides? I bet you were able to still figure out how to fill up the tank.) Hitting a button on your system and saving hundreds if not thousands of keystrokesusing the system you already have put a significant investment intohas got to be easier than duplicating your entry of data into one or many carrier systems.
 
Agents, here are some key ways you can help shape your future and move the industry forward:
·        Use commercial lines bridging and rating for those carriers that are providing it.
·        Give feedback to your carriers on what works and what doesn’t.
·        Tell carriers you need this functionality.
·        Embrace the next improvement or new development.
·        Thank senior carrier executives when they provide you with time-saving real-time functionality.
 
What Can Carriers Do? 
·        Get out your roadmap.
·        Understand your options.
·        If you haven’t begun, plan your trip.
·        Understand your internal capabilities and what is available externally to assist you.
·        Talk to industry resources to help. 
·        Get started. Begin with one line. 
·        If you have implemented, talk to your agents, get feedback, and enhance existing implementations.
·        Get creative!
·        Plan your next trip.
 
Don’t wait for perfection.  Travel the roads available.  Build more roads.  Improve those roads. 
Much like the U.S. Interstate system, commercial lines real-time rating will continue to evolve, but it is essential for the future of the independent agent distribution system to have agents and carriers get on the road and start that drive today. We need both the engineers to design it and the drivers to use it to understand its full capabilities. 
 
Now is the time to pave the road for our future. As the noted authority Lily Tomlin said: “The road to success is always under construction.”

Thad Bauer is president and co-founder of NxTech, Inc., a firm that helps carriers, MGAs and brokers implement Real Time and Download, using ACORD Standards, to exchange data electronically with their agent partners. Thad has almost 25 years of experience in the property-casualty insurance industry and in automating workflows between companies and agencies. Thad authored this article for ACT and can be reached at tbauer@nxtechcorp.com. This article reflects the views of the author and should not be construed as an official statement by ACT.