The October general meeting of the Agents Council for Technology was chock-full of insights from experts in their respective fields. The topics addressed span our entire industry, from the technology of marketing to cyber security to carrier-agent transactions to regulatory compliance. The single greatest takeaway is that the independent agency channel, through the Agents Council for Technology (ACT), is not only watching but also setting out to transform the way technology improves business-to-business and business-client relationships. Here is a summary of some key points made in both the pre-meeting and the full meeting that took place Oct. 2, 2015.
ACT PRE-MEETING
Paul Viollis – Cyber Crime
Paul Viollis, head of Viollis Group International, drilled down into cyber crime, pointing out that negative behavior migrates to the paths of least resistance. He noted that nobody can build an impenetrable system so the goal is to make your system or device more difficult for hackers to access than others. Deactivating Bluetooth, where possible, on mobile devices and adding disk-level encryption are important first steps. Not moving apps from an old (and possibly infected) computer to a new one also is important.
He noted that agencies hold significant amounts of customer data and that losing it will harm the agency brand. Save your brand by protecting what you can—the machine and the router. Consider, as well, that the convenience of certain apps brings with it increased security exposure. On a personal level, Viollis encourages checking credit card statements weekly and credit bureau reports once a month. He also recommends training users about phishing and cyber ransom.
Ryan Hanley and Marty Agather – Disruptions and Innovation
Ryan Hanley and Marty Agather took us on a tour of technology innovation, new and improved ways of doing business, and disruption—factors that completely change the beachfront and that require a fundamental strategic shift. Citing ‘Google Compare’ as a platform that is challenging the traditional way of doing business in the insurance industry, Hanley encouraged audience members to think about consumer buying habits and consider what drives purchases.
Agather stressed the need for the insurance industry to structure its business so it can respond more quickly. He pointed out the importance of agents and brokers being prepared to engage all consumers, not just those predisposed to working in-person with a local agent. Hanley echoed the sentiment, citing as an example a 26-year-old friend who preferred to communicate via text but was pleasantly surprised when he darkened the door of an agency and saw that it was not just for old people.
Listeners were also challenged to explore new methods of customer self-service and adaptive technologies. Greater engagement with the ACT Customer Experience Work Group and the Strategic Future Issues Work Group was spotlighted as a way agents can build out their knowledge and creativity through networking and peer collaboration. The Strategic Future Issues Work Group, in particular, offers information agents can use to address disruptions and capitalize on innovations.
ACT MEETING
Vendor Cyber Panel
The ACT cyber panel provided a venue for vendors to share what their firms are doing to reduce threats and offered advice for agents and brokers. Strategic Insurance Software product manager Bryce Lee explained that his firm, which offers the cloud-based Partner XE system, has attained third-party certification on how it encrypts data in motion and at rest. Applied Systems’ VP of partner relations, Doug Johnston, said IVANS encrypts data “down to the agent mailbox, then encrypts it inside the mailbox until the agent gets it.”
Joe Magrady, CIO at Vertafore, said his company encrypts all data at rest and has laptop and desktop security and encryption. “For data in motion,” he said, “we’re moving toward TLS, which is more secure than SSL.” Jerry Fox, director of client market strategy at CoreLogic/MSB, discussed the recent acquisition of Marshall & Swift/Boeckh by CoreLogic and its implications for cyber security. The merger forced those involved to look more closely at potential partner exposures and to patch security holes.
Disaster response is top of mind for vendors. “As part of our certification, we were put through the ringer on disaster preparedness planning,” Lee explained. Magrady pointed out that Vertafore has a dedicated compliance function in place to address various regulatory requirements.
Education also is key. Fox identified a major security gap at companies nationwide: “Employees are the biggest [security] hole,” he said. “Nothing short of not allowing them to use the system can prevent employee issues.” According to Johnston, “Education starts at implementation. Over the last several years, training on security procedures has been a core part of setting up the system.”
Vendors also discussed mobile security strategies, procedures for responding to breaches affecting one or more customers, and security holes left by dealing with third parties.
Strategic Future Issues (SFI) Work Group
Since the last ACT meeting in February, several calls have taken place, and the group has completed its final draft report. “We’re in the process of cleaning it up, proofing it and getting it ready for distribution,” explained Aartrijk senior vice president and SFI work group Co-Chair Rick Morgan. Also, the group has started to generate what Morgan called “must-do” items, which the work group will review and refine before the report is released. “It’s been a big project, and it will be more relevant than what we originally produced in 2013,” he added.
Security Issues Work Group
The ACT ‘Security Issues Pocket Guide’ was distributed at the meeting. “Steve Aronson’s vision as work group Chair was for this to be a tool carriers can provide to their marketing managers to give agencies something they can use for their security road map,” explained ACT executive director Ron Berg. He pointed out that, because agencies don’t know where to start, they sometimes don’t start at all. The guide lists 15 top items agencies need to look at, and the Pocket Guide refers users to a full Summary reference resource that goes into deeper detail than the Pocket Guide – Both are located on the ACT website. The work group will expand that going forward. Berg mentioned that work group members should look for an invitation to a “next steps” meeting.
Small Commercial Real-Time Rating Work Group
The Small Commercial Real-Time Rating Work Group was begun in September 2015 to drive consistency, education and utilization of the existing bridging functionality that’s available, as well as the end goal of round-trip, real-time rating for small commercial lines, which some companies are already offering. The work group fielded a short survey asking what industry members are doing now on real-time rating, what impediments they’re facing, and what plans they have for the future. This was subsequently sent out through ACT, user groups, carriers and vendors and is currently being analyzed to validate the work group focus on priority needs for the design and adoption of real-time rating solutions. This work group is co-chaired by Jim Armitage (Arroyo Insurance) and Susan LaBarre (Liberty Mutual).
eSignature Work Group
Begun in September 2015, this ACT work group will address the independent agency channel’s struggles with eSignature adoption by agents and acceptance by carriers. The work group’s presentation highlighted a prime problem: the industry may have put the cart before the horse by addressing the technology behind eSignature before addressing the workflow impacts and education. Co-Chaired by Joyce Sigler (Jones & Wenner Insurance) and Nick Khamarji, Jr (New England Insurance), the work group believes there is an opportunity to do more in terms of compliance, integrating e-signatures into agency workflows and updating existing reference documents. The group, with nearly 50 members, is working with user groups and associations and is identifying pain points in carrier-agent workflows, carrier-customer workflows and agent-customer workflows, as well as other impediments. The group will have an updated report at the February ACT meeting in Scottsdale.
Usage-Based Insurance
Over the past several years, usage-based insurance and telematics have grown. Agents and brokers should understand current and future offerings and how they might affect their business going forward.
Kevin Ament, agency marketing director at Progressive, explained that drivers’ behavior, as recorded by in-car or mobile devices, is being used as an additional underwriting factor. The number of carriers involved is growing, the tools being used to capture data have evolved, and many consumers are receptive to the idea. The data captured are helping drivers improve not only their driving but also their routes, allowing them to avoid more dangerous travel patterns.
John Condon, research manager at Verdeva, described a product his firm is developing that will connect gas pumps to the Internet of Things that he says can create a new distribution channel for independent agents. The firm is launching a pilot with EZ-Pass Group and several states that Condon says will provide group sales opportunities and create a communication platform to reach consumers.
Dwight Holcomb, acting chief marketing technology officer at VRC Insurance Systems, pointed out that up to 90% of insurers are planning, testing or implementing usage-based insurance. “You'll be selling it,” he added. He pointed out that the technology changes we’ll see in the next five years will be greater than we’ve seen in the past 50. A big challenge he identified for insurers, however, is managing all the data they capture. Despite that, data-gathering systems are growing in use; moreover, telematics improves driver safety by changing behavior. He also pointed out that American Family’s TeenSafe driver program, which incorporates the use of a two-way camera, reduced risky youth-driver behavior by 70%.