Tech Talk: Why Real-Time Binding Delivers Immediate Value

Insurance Journal's Tech Talk column is made possible in part by the generous support of ITC

For independent agents, optimum use of technology delivers a multitude of benefits, including streamlined back-office operations and more effective marketing outreach. Yet one benefit, arguably the most powerful, is often overlooked — that of producing tangible and immediate value to the customer. An agency-branded mobile app that facilitates easier premium payments and claims filing is one example already in use. While not yet a reality, real-time binding is another innovation that produces value any buyer can appreciate.

The National Association of Professional Insurance Agents (PIA) has been a champion of real-time binding with its “Buy Button.”

“Our biggest challenge as agents is not the decision whether or not to go digital,” said Mike Becker, PIA executive vice president. “Our biggest problem is insurance sales, both online and off-line. The fact is, we need to be in a position to sell insurance in real-time.”

Becker says the Buy Button gives agents the ability to bind a policy in a “once and done fashion” using their agency systems for both clients and prospects who walk in the office, call on the phone or visit online. Agents could also bind outside the office using mobile technology.

“Real-time binding in the agent’s office can enhance the customer experience, improve conversion rates, and help with retention and cross-selling,” said Bill Pieroni, ACORD chairman and CEO.

Experts agree the technology is already available. However, deployment is complicated by how current systems are set up.

“Independent agents operate in a

multi-carrier environment in contrast to direct writers,” said Keith A. Savino, partner and chief operating officer for Warwick Resource Group and a PIA board member. “Directs operate with one system while each of our companies have their own systems. In the manual world, the best we can hope for is being in position to provide estimated annual premium to prospects. We need to be able to offer real-time, exact and findable quotes.”

Carriers will tell agents they can provide binding on their proprietary systems but what agents need is to be able to offer binding through their own agency management systems, Savino said. “Instantaneous binding puts more pressure on an agent to ask all the right questions in taking an application, however the payoff is huge. It can be a game-changer for independent agents.”

PIA’s Becker said there will always be agents who are “latecomers to the party.” But making the change to real-time binding in an agent’s office is critical to the future of our agency system. “We have the better products and pricing but this one piece is a huge impediment.”

As important as real-time binding is, Pieroni cautions that seeing technology as the only answer to addressing the current competitive climate misses the mark.

“Agents face three key challenges as it relates to digitization — leveraging technology to address emerging consumer demands, successfully incorporating digital technology into their office operations, and rethinking strategy and overall value proposition moving forward,” Pieroni said. Digitization of the value chain can, if done correctly, reduce costs and increase effectiveness for the agent, while strengthening the value proposition. “It requires a rethinking of the whole capability model — processes, organization, as well as technology. Solely focusing on technology will impair full realization.”

Digital challenges facing agents falls into three buckets — streamlining back office functions, mastering the use of customer-facing tools such as a website and social media and delivering as many services as possible to the policyholder in real-time without sacrificing quality. This last challenge is perhaps the toughest but is becoming an absolute necessity.

Topics Agencies InsurTech Tech