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Making the Agency Business More Profitable…And More Fun

By Jeff Yates, ACT Executive Director
Each time I complete an Agents Council for Technology (ACT) meeting, I leave really pumped up about the opportunities we have today to finally solve some of the business problems that have plagued  independent agencies for years.   I am excited by the number of highly knowledgeable volunteers—from the agency, carrier, and vendor ranks—who are dedicating large amounts of time to ACT and other industry initiatives to tackle these problems.  I believe the scale of industry involvement is unprecedented. 
 
I believe this high level of involvement results from an understanding that new technologies, such as real-time and web services, are creating excellent opportunities for us to re-invent some of the inefficient processes and workflows that are causing growing frustration.  The increasing involvement is also coming because agents are pressing for solutions to these problems on a more consistent basis than ever before.
 
ACT is interested in solving business problems that agencies face, and the technology we discuss is simply a means to get to the real objective.  We want to help agents make more money, in less time, with less hassle, and at the least cost.  I believe every agency owner is interested in these objectives, and we need to do a better job of getting the word out that these are business improvement issues that they ought to be involved in, not just technology issues that should be delegated to the agency staff primarily using the agency’s systems. 
 
Agency principals need to drive a process improvement mentality within their agencies.  Agency staffs, who are used to their traditional workflows and “work-arounds”, are sometimes reluctant to change, especially if some of their carriers do not yet offer the new workflows and technologies.  These staffs state that they do not want to deal with multiple workflows, when in reality they are already dealing with multiple workflows every time they log on to a proprietary company website.  They are just used to it.
 
The beauty of the new real-time workflows is that they will reduce the number of workflows that agents will have to deal with, because they will be able to use the workflow of their agency system, and the data within it, to transact business with multiple carriers. 
 
We need to do a better job of convincing agency staffs that there are many agencies today which have implemented these new real-time workflows wherever they could, and as a result, have freed up time to reduce their backlogs and to engage in more pro-active service with customers.  Perhaps even more important, these agencies have been able to reduce the frustration levels within their staffs because the amount of senseless re-keying of the same information into multiple carrier websites has been reduced. 
 
The implementing agencies of today also realize the power of their example.  The best way to encourage carriers and vendors to invest more in these more efficient real-time technologies is to implement what the carriers make available to show them that the investments they have made are worthwhile.
 
We have to do a better job of giving agents step-by-step guidance to show how easy it is for them to implement these new real-time capabilities, using their current systems, at little, to no additional cost to them.  This assistance is now available from the agency system vendors and user groups.  Several carriers will also help agencies get started.  So, the bottom-line is this: proven real-time improvements are available to agencies today at little to no cost and the path to implement them has been simplified.  The only question is whether the agency is willing to embrace change.  This is where the agency principal may need to provide crucial leadership.
 
ACT has focused on the implementation of real-time in our industry as its number one objective because this breakthrough technology will greatly reduce the current inefficiencies and frustrations that independent agencies face and enable them to work in a multiple carrier environment much more effectively.
 
We also believe real-time is critical for our distribution system in order to stay competitive in the future.  Today, other types of financial services companies are able to solve customer inquiries on the spot, without having to say, “I’ll call you back.”  Not only is the current process highly inefficient for agencies, it makes us look unprofessional.  Consumers are increasingly able to get answers on the spot from other institutions, and they are asking why we cannot give them the same thing.  Unless we solve this problem, we are going to move further and further away from what consumers expect, as we increasingly do business with Gen X and Gen Y, who are computer savvy, want instant results, and want options to communicate and transact business online at their convenience.
 
Not only will consumers increasingly demand these real-time services, but competitors will offer them to add value, enhance their professionalism, and differentiate themselves in the marketplace.  In so doing, they will “raise the bar” for the rest of the industry.
 
The good news is that many independent agencies today can answer a number of customer inquiries on the spot by employing real-time inquiry functions through their agency management systems.  Many carriers offer real time billing and claims inquiry, as well as electronic policy view.  Others enable agents to get loss runs in real-time.  We urge agencies to implement these real-time inquiry functions today, if they have not yet done so.
 
To find out exactly which real-time capabilities your specific carriers offer through your agency management system, go to ACT’s recently redesigned website, http://www.ACTtech.org and click on “My Possibilities.”  There you can click on your agency management system and your specific carriers and run a report on the real-time and download capabilities each of the carriers can provide for your system.  We think you will find this website to be an increasingly helpful resource to keep you up-to-date on the real-time functions you can implement.  If one of your carriers is not listed on the site, ask it to register on the site and enter its data.  The site is open to all carriers at no charge.
Agency management system vendors and user groups also offer very helpful information on real-time.  To access links to this information, go to the ACT homepage at www.independentagent.com/act and click on the icon “Real-Time Interface Links.”  Also, review the new “ACT Highlights” section at the top of the ACT home page to help you find more detailed information on real-time, as well as on other ACT reports that may be very helpful to your agency.
 
Real-time goes way beyond the inquiry functions, of course.  More and more carriers are starting to offer real-time rating through agency management systems and comparative raters.  This is critical functionality for agents.  I urge agents to implement this functionality when it becomes available, to commend the carriers that have acted, and to urge your other carriers to invest in real-time rating.  The time and cost savings that agencies will realize from real-time rating are enormous.  Assume an agency employee earning $50,000 a year is able to save one hour a day by using real-time rating.  The value of that time is $6,000 annually!
 
ACT will continue to identify business problems that independent agencies are facing and seek improvements.  We are working on a number of other issues, many of which are covered on our website.  We would welcome your recommendations as to additional “pain points” you would like to see ACT address.
 
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.  This article reflects the views of the author and should not be construed as an official statement by ACT.
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