The Continuing Struggle to Bring Collaboration and Connection to P/C Agencies, Carriers and Vendors
Technology is helping the insurance industry in many ways. Technology is helping insurers to better understand the risks they take when insuring homes and businesses. Technology is helping agencies to manage operations more efficiently. And perhaps most importantly technology is helping the industry to connect and service its customers in new and more efficient ways.
Communication barriers are being dropped and companies are developing more collaborative approaches among industry partners, according to Ilya Bodner, founder and CEO of Bold Penguin. Bodner says he wouldn’t consider today’s insurance world the “renaissance days of collaboration” but he believes a trend toward collaboration has begun. “And that is refreshing.”
For a long time, insurance software systems were built with a “monolithic” approach, according to Bodner. “You come in and close circuit,” he said. “Insurtechs obviously helped change the script a little bit and now more and more companies are willing to partner — to push information and pull information to each other — to make the end-user experience better.”
In Bodner’s view, collaboration is becoming easier as comfort levels of everyone involved — carrier executives, agencies and insurtech providers — eases. “Now we’re building in a way that there are gateways, there is authentication, and APIs that have been established to make it a little easier.”
For Ohio-based Bold Penguin, which has raised more than $50 million in venture capital since its launch in 2016, building collaborative relationships with large brokerages and property/casualty insurer software providers took time and hard work.
“There was certainly a period of, ‘Can we trust each other?'” That trust finally came around because customers demanded more collaboration, Bodner said. Things are finally changing. “We work with Vertafore, we work with Applied Systems, we work with Guidewire, we work with Duck Creek,” he said. “We push data and collect data that I don’t think would have even happened a few years ago,” Bodner said. “Insurtechs have made it easier.”
Bold Penguin, with investments from Lockton, Guggenheim Insurance and Lightstone, is a virtual exchange that helps agents and brokers triage, quote and bind commercial policies in a programmatic and rules-based system. It also helps carriers market their products to insurance agents.
The original thesis behind the insurtech movement focused on “disintermediation,” said Larid Rixford, CEO at Insurance Technologies Corporation (ITC).
“That proved to be a fallacy,” Rixford said. “The nature of the insurance industry is a collaborative model where agents, vendors, carriers and the consumers themselves are all collaborating to educate, to learn from each other and service insurance policies.”
To be successful in the insurance industry, whether it be online, agency direct, carrier direct, or whatever channel, collaboration is key, Rixford said.
“Those are all important facets to make insurance all work and that’s where insurtech really should be and how it was focused to be,” he said. “It is not about technology replacing the existing models. It’s there to supplement the existing models by making them more efficient and more profitable.”
Barriers Still Exist
While relationships appear to be helping the industry connect more easily, not everyone is having the same experience of integrating data and that is a concern for some in the industry.
One problem some agents have identified as a shortcoming in agency management systems is that the technology doesn’t focus on the communications component of the insurance agency business, according to Frank Sentner, sole proprietor for Sentwood Consulting.
Sentner has been providing technology services to the insurance industry for 44 years. He has managed policy, billing, and claims system replacement projects for insurers and provided strategic consulting for The Council of Insurance Agents & Brokers. He now consults with ACORD and serves on the boards of several start-up insurtech firms.
Sentner has spent the last six years working with a broad range of insurtechs. He is outspoken in wanting to eliminate the obstacles to better communication among partners and right what he sees as wrongs being done to agents by certain agency management technology vendors.
“These innovators and their amazing technologies have the power to transform our insurance industry,” he said. “Despite their promise, however, larger agency management system vendors prevent agents from integrating these technologies with their agency data by creating sham partner approval processes that screen out all probable competitors or by pricing integration technologies out of reach or by simply not enabling access at all.”
Sentner believes that data is more important to the functioning of the insurance businesses than any other kind of business. “Unfortunately,” he told Insurance Journal, “most agents have ceded the rights to the data in their agency management systems to the vendors that control them. The agency management system license agreements should not provide these vendors with control over access to your agencies’ data.”
According to Sentner, the largest agency management system vendors know the revenue potential of aggregating and controlling agency data, as do the private equity and large data companies that now control them. Roper Technologies acquired Vertafore for $5.35 billion in September 2020 and Google’s investment arm, CapitalG, made a “sizable minority investment” in Applied Systems in late 2018.
It’s the value of the data driving these investments, according to Sentner. “No one could seriously believe that Roper Technologies would pay that kind of money for technology that is more than three decades old,” Sentner said. “It’s your agencies’ data … and you didn’t get a penny.”
Sentner’s call to action for agencies: “Agents need to mobilize their trade associations, and contact their state regulators and their elected representatives,” he said. “These contracts and vendor practices are in restraint of trade and they should not be allowed to stand.”
Seth Zaremba, owner of Zinc Insurance in Broadview Heights, Ohio, and creator of Neon, Zinc’s custom-made technology platform, hopes to offer another solution to the data integration challenge, especially for smaller agencies.
“I’m on a mission,” Zaremba told Insurance Journal. That mission is to inform agencies on the value of their data and how they can use it better.
In Zaremba’s view, agency technology doesn’t often do everything that needs to be done — it might not integrate with other technologies, it is often difficult to connect with carriers, and it doesn’t always allow agencies to utilize agency data in the way some owners want and need it to be used.
He hears from agency owners that their technology is “broken.” They complain that “none of my technology connects. Items, overwrites, the bad data I have every time a policy renews … and nobody’s listening, nobody’s building, nobody cares about independent agents that are my size,” he said.
Zaremba’s Neon platform, which launched Sept. 30, aims to help these agencies better understand and analyze their own data without relying on agency management vendors.
“So the idea that there’s a group of agents who have scaled technologies so that it’s affordable, that it’s built for them and then it has the potential to aggregate data together, anonymize and aggregate and that carriers can use that to make direct connections into a customer call or email,” he said.
“All of that data is extremely valuable to understanding the consumer — and agents — the only people who have relationships with the consumer — are giving that away to our vendors so that they can turn it into revenue,” Zaremba said. “They’re packaging up this disparate, disconnected, not purpose-built data and selling it back to agents at a high markup,” he said.
“But we figured out how to directly connect agents and carriers together so that there’s no vendor between them, with connections that they own and can manage and improve,” Zaremba said.
Within hours of Neon’s launch, 780 agents had signed up for a demo of its platform and 45 insurance carriers had reached out to Zaremba.
“I’ve been saying it for five years and nobody’s listening, but I think finally people can imagine what I was talking about,” he said. Zaremba says part of the reason Neon came to be has a lot to do with increased collaboration among industry partners seeking to make things work better together.
“I think about that every Friday,” he said, when Neon holds its weekly pilot agency call where competitive agencies help each other solve problems. “And once a month I have a pilot carrier call and all six carriers hop on the same call and share what they are doing and struggling with,” he said. “What’s happening is there’s a community being built around people who see our survival as dependent on each other, not as something that’s in spite of each other.”
The Good of Three
Insurtech provider AgencyKPI, based in Austin, Texas, has been working to help another important segment — agency networks — solve data issues and improve collaboration as well.
AgencyKPI is a business intelligence platform designed to address and manage the abundance of data produced by multiple software programs and legacy systems across the insurance industry. In June the firm received $5 million in Series A funding led by EMC Insurance Companies of Des Moines, Iowa. Two insurance agency networks are also investing in AgencyKPI: Keystone Insurers Group of Northumberland, Pennsylvania, and Austin-based Combined Agents of America.
AgencyKPI Co-founder Bobby Billman believes part of the issue that has been holding back “digital transformation” in the insurance industry is what he calls, “technology for technology’s sake.”
Agents and their partners need ways to connect various technology providers so they can extract more value from that technology, he said. In his view, the challenge is merely a tech challenge of being able to connect the pieces, including carriers, agency management system providers and agencies.
“I think their intent is they do want to move to an open platform but it’s a technology challenge for them,” he said.
“We actually meet with these AMS providers and talk about an integration path for AgencyKPI. Some of them have APIs that are not complete, and other ones are working on new microservices. They have to change the way they think about how you connect their systems.”
AgencyKPI was started in 2017 by Trent Richmond, an insurance industry veteran, and Billman, a seasoned high tech executive. In 2019, AgencyKPI launched its business intelligence platform for networks, called Harmony, to addresses mass data fragmentation and unify data from various sources, so insurance networks could see how they are performing on any given level. Today, the Harmony platform handles $15.8 billion in written premium from more than 9,100 affiliated agencies.
The issue of data fragmentation is not unlike that of the retail agency but Billman says Harmony is one of the first platforms to tackle the problem for the network audience.Like retail agencies, agency networks need to understand their data so that they can help their retail agency members and show their carrier partners their results.
Billman says it is AgencyKPI’s viewpoint that the agency owns the data. “That’s where it came from. Agents have the relationship with the clients,” he said. But at the end of the day, that’s not what matters. “It doesn’t really matter to us because what we’re using it for is for the good of the three, or the collective — the network, the agency, and the carrier.”
Ryan Collier, Risk Placement Services’ chief digital officer, says the future will be figuring out how to get things connected, better — agencies, carriers, and other industry partners.
At RPS, Collier saw a need to streamline the cyber insurance policy process in 2014, so he developed the RPS e-commerce platform. By focusing on the client, not the underwriter, cyber polices issued jumped from 58 in 2014 to 20,000 in 2020. Now with 17 products available, agents can quote/bind/issue policies in the RPS online platform in minutes. Collier says he recognized the need to continue to disrupt the inefficient, albeit traditional way, of transacting business within the insurance industry.
“It’s up to the incumbents to find innovation before the innovators find distribution,” Collier said. “Insurtech is no longer the threat. Insurtech should be the ally,” Collier said. “Insurtech will become the new norm.”
Collier hopes the industry will embrace the ally for what it is. “And that’s where I’m trying to help the retail broker do better things for their customers. That’s it.”
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