By Jeff Yates, ACT Executive Director
The AUGIE survey results are in, and they provide a great resource for agents and the industry regarding the progress we are making with agency technology, as well as the areas of continued inefficiency that the industry needs to address. This month we focus on the positive impact new technologies are having for many agencies. Over 7,500 independent agents, brokers, and wholesalers took part in the survey, and 4,000 completed it, giving us a very comprehensive look at the issues.
AUGIE is the ACORD-User Groups Information Exchange, and the survey is available at www.ACORD.org
by clicking on “Information for Agents, Brokers, and Distributors.”
What struck me first and foremost was that there are a group of agencies which are deriving enormous benefit today from implementing the latest technologies, while there are others which are only seeing a modest benefit, if any. 65% said their agency value has increased because of the implementation of new technology procedures; while 34% said these technology procedures have resulted in no change in agency value. 44% of the agents said that their new technology procedures had a significant impact on the time their staffs spend on processing, while 41% noted only moderate impact, and an additional 16% responded that these new procedures had had very little or no impact.
Some agencies are using these new efficiencies to change the focus of their staffs, while others are not. 44% strongly agreed that the adoption of new technologies has enabled their agency to become a more effective sales organization; while 45% only somewhat agreed, and 11% disagreed. 42% said that new technology procedures have had a significant impact on their ability to provide pro-active client servicing; while 46% said these new procedures have only had a moderate impact for them in improving servicing, and an additional 12% said there has been very little or no impact on servicing for them.
I believe there are several factors enabling some agencies to derive significant efficiencies from technology, while others do not. First, the technologically successful agencies are passionate about continuous improvement in their processes. These agencies are represented in the 55% of respondents who said they strongly agreed with the statement that their agency has an active strategy to continuously improve the business by implementing technology improvements as they are introduced. In contrast, 40% of agents said that they only somewhat agreed with this statement, and an additional 5% disagreed.
Second, you can only derive benefit from a new technology if your staff implements it. 76% of the agents said that their staff is required to implement technology improvements when they are adopted by the agency; but 22% only somewhat agreed, and 2% disagreed. Documenting the new workflows that implement the new technology and then driving these new workflows down throughout the entire organization, with the full backing of agency management, are crucial parts of the implementation process that are often not carried through upon by agencies. A focus on disciplined implementation, coupled with the auditing of employee work for compliance with the new workflows, represents a big opportunity area for agencies to increase their payback from new technologies.
Third, providing systematic training to employees on new technologies and workflows is another key step. 42% of the survey respondents said they strongly agree that they provide such training, while 47% said they only somewhat agreed, and 11% said they disagreed. A heightened commitment to employee training and coaching can provide an enormous payback to agencies, and there are a wide variety of training opportunities on the new technologies available through the user groups, vendors, carriers, consultants, and agent associations.
Fourth, the agencies that are implementing new technologies most effectively are taking one more crucial step as reflected in some of the responses above. They are taking advantage of the efficiencies they have gained to change the roles of their staff and to transform their organizations from ones that have been primarily focused inwardly on processing paper to ones that are focused outwardly on pro-active service, cross marketing, and sales.
There is a multiplier effect starting to take effect for agencies that implement new technologies consistently and successfully. The biggest benefit seems to be that these efficiencies enable the agency to grow without increasing staff. In the words of one agent respondent: “We grew 35% last year, but we did not have to add any employees.” You hear this time and time again from agencies which have made the commitment to staying current with new technology opportunities.
Another agent spoke of the benefits of going paperless: “We converted to an image-driven workflow about two years ago in personal lines. The result was an increase of revenue per CSR of about $75,000 each. In commercial, imaging was implemented six months ago; average increase in revenue per CSR to date is about $40,000.”
In spite of the huge payback many agencies are realizing from their paperless initiatives, only 41% of the respondents strongly agreed that their agency has a major strategy to go paperless or remain paperless. 35% somewhat agreed that they were implementing such a strategy, and a full 24% are not pursuing such an initiative.
A number of agencies are pointing the way as to how the technologies and workflows available today—real-time, personal and commercial lines download, direct-bill commission statement download, eliminating paper, fully using agency management system capabilities—can enable the agency to become more efficient, more sales oriented, and more pro-active and professional with its customers. One agent at the recent ACT and AUGIE meetings summed it up well: “We all know how hard it is to grow the agency’s bottom-line, and yet, many agencies, by not taking advantage of the technology opportunities that are available to them today, are just leaving money on the table that could be flowing to their bottom-line.”
Next month, I will focus on the agency frustrations and unmet needs with technology that are identified in the survey, along with the areas that demand further attention by carriers, vendors, and agencies alike.
Jeff Yates is Executive Director of the Agents Council for Technology (ACT) which is part of the Independent Insurance Agents & Brokers of America. Jeff Yates can be reached here. ACT’s many reports and business improvement tools can be found at www.independentagent.com/act. This article reflects the views of the author and should not be construed as an official statement by ACT.