AMS Says Real-Time Comparative Rater is Only Months Away

By | May 17, 2004

Leading agency automation provider AMS says it is just months away from completing a real-time comparative rater that will satisfy independent agents’ need for a single-entry, multiple carrier interface, also known as SEMCI.

The product, to be called SETWrite (Single Entry Transaction Write), will be completed by July and rolled out to 36 states comprising more than 90 percent of the country’s premium volume, according to Salil Donde, president of AMS-Rackley Inc.

The company demonstrated the Web-based product at the 28th annual AMS Users’ Group conference in Indianapolis in April and announced that seven carriers have signed up to provide real-time auto and homeowners insurance rates to accompany the traditional estimated, or manufactured, rates that are the old standby of products such as AMS QuoteWorks.

Agents have long complained that these rates are often untimely and inaccurate, especially in the era of loss-history databases and credit-based insurance scoring. Technical challenges and carriers’ fears of “being spread-sheeted” by agents have held back SEMCI for more than two decades.

“Agents have been asking for this for many years,” Donde told Insurance Journal. “Carriers have been trying to do it for many years. The challenge was to make it work, rather than sell someone on the concept. We began conversations with carriers and asked them, ‘If we actually deliver this, do you want to play?’ We got them involved early on in the process as partners.”

So far, Hartford, Progressive, Citizens and Hanover, Kemper, Penn National and St. Paul Travelers have announced their support for the product with real-time rating information coming directly from the carriers’ Web interface. Donde told IJ that a number of other carriers are in the process of signing on.

“There are minimal resources required from the carrier,” Donde said. “We do all the work. With a company that already has an XML Web service, the process is very simple. If carriers, such as a number of regionals, don’t have rate information already on the Internet, we can get information from the carrier’s legacy system into XML … There’s no question we’ve leapfrogged the competition.”

Donde said his goals are to have 15 carriers providing real-time rating information as part of SETWrite by the end of this year, and to begin rolling out some commercial lines products—most likely small commercial and businessowners policies—by the same time. SETWrite would be available to all users regardless of what agency management system they use.

While other products such as Applied Systems-licensed IVANS Transformation Station also do real-time rating, they are not comparative, according to Steve Anderson, editor of The Automated Agency Report.

“SETWrite is a real-time comparative rater in what is a true definition of the term,” Anderson told IJ. “It went out to one or all of the seven carriers and presented back a Web page screen that presents carriers one, two, three and four. Transformation Station does not do that at this point.”

Say it ain’t SEMCI?
Mike Dillon, business development manager for Fairfax, Va.-based Long & Foster Insurance Agency, was part of the AMS-Rackley’s research and development team on SETWrite and tested the product.

“The big deal for us was that we don’t have to do all the re-keying of data,” Dillon told IJ. “We went from taking 40 minutes from the beginning of a call to issue a policy to 15 minutes.”

Dillon, whose agency uses Applied Systems to manage its agency, said it is crucial for agents to spend more time providing professional advice to clients and less time re-entering data from one system to another.

“This is SEMCI,” Dillon said. “This is what we’ve all been waiting for. It works and it works correctly.”

Michael J. Foy, CFO of Exeter, N.H.-based Foy Insurance Group, was also on the SETWrite R&D team.

“The delivery of the first product will be 80 percent of the way there,” Foy told IJ. “We’ll improve afterwards. Every carrier is already on SETWrite, which is just QuoteWorks plus. The next step is getting everybody to do it in a real-time way that encompasses what we saw in the demo. Carriers who bring the entire process will write more business. This is a product everyone will embrace.”

Whether that’s true remains to be seen. MI-Assistant and Priority Data Systems, among others, are working on their own real-time comparative rating products. And, in spite of Donde’s assurances, the technology gap that needs to be hurdled by regional carriers is not insignificant. Furthermore, many carriers fear that by allowing such an easy way to compare rates, agents will choose where to place business solely on rate.

Anderson said the fear was overblown.

“All that says to me is the carrier does not understand what agents do,” he said. “An agent’s job is to compare prices. That’s why they’re an independent agent and represent multiple companies and not a captive agent. They’re afraid that the agent will sell just on price. That’s just not true. It’s not the sole determining factor.”

Anderson pointed out that agents already do compare rates from one carrier to another, and that real-time comparative rating would just speed up the process.

“I don’t see how cutting out time in that process will make it more price-sensitive,” he said. “You still have to compete on other things besides price,” such as available coverages and the quality of claims service.

In spite of Donde’s obvious excitement about the SETWrite product and what he believes is a tremendous advance in agency automation, he shied away from saying it achieved SEMCI.

“If we say it’s SEMCI, people won’t believe it,” he said, comparing the concept to the oft-tried but disappointing miracle diet.

Anderson agreed: “I think the word has so much baggage and so many negative connotations with agents that it’s not useful anymore.”

“So you won’t say it’s SEMCI for PR reasons,” a reporter asked Donde, “but is it?”

“I think that’s for the market to decide,” he said.

And so it will.

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