Technology: Do Agents Really Need to be Involved’

Today, the independent agency system is faced with new challenges and opportunities, many of which are fostered by the development of new technologies, not the least of which is the growth of eCommerce through the Internet. While much of the past efforts in technology have focused on the back office processes and “B2B” data sharing between carriers and agents, the current opportunities seem to be aimed more at the “front facing” or consumer interfaces.

The experience people have as individual consumers, whether on an Internet site or in a store, is the basis for the expectations they bring to their work. Access to all kinds of information about the subject they’re interested in allows them to make better decisions and choices. Access to information empowers people. It gives them the knowledge to succeed. The same can be said for businesses. We often hear the expressions “Content is King” and “Knowledge is Power.” Sharing information and providing access to data is where true success lies, as the thousands of Internet portals can attest. Managing those expectations is driving much of the systems development taking place today.

A little over a century ago, our business and personal cultures were dramatically changed by a host of new technologies. One of these, the telephone, was destined to have an enormous impact on the way business was conducted. Many businesses, insurance agencies included, declined to invest in the new technology, calling it “too expensive” and “no substitute for personal (i.e. face-to-face) contact.” Imagine trying to run an agency today without a phone system! Moreover, the derivatives of telephone technology, including facsimile, pagers, answering machines, voice mail, call centers, and a host of other related business tools, are commonplace without which agents simply could not do business.

The misunderstanding in the above analogy is that many people think the business need preceded the technology. Can you imagine agents 50 years ago sitting around saying, “Wouldn’t it be great if there was a way for us to instantly send letters and documents to our carriers and customers without having to waste time with the mail?” No. The reality is that the fax machine was first developed and then business applications followed.

One of the biggest challenges facing agents today is keeping up with that ever-changing technology landscape. The recently completed AUGIE (ACORD-User Groups Information Exchange) Agency Survey showed that the cost of implementing new technology and training staff on those new systems is one of the leading reasons agents don’t keep up. Many agents, in fact, will upgrade their systems to the point of purchasing the new software version, but never crack the seal on the disk to actually load it.

Many agents complain they feel caught between their vendor systems and the “solutions” offered up by the carriers they represent. Part of the blame, if you can call it that, lies with the agents themselves. Without an understanding of their business needs, the IT development occurs in a vacuum with the “slickest,” although perhaps not the most efficient and effect systems filling the void.

That precise lack of understanding between the parties—agents, carriers and vendors—was the crux of why AUGIE was formed in the first place. As the name implies, AUGIE is meant to be a process by which all the players in the insurance value chain can exchange information to gain greater understanding of each others’ business and workflow needs. The AUGIE Survey, which reached more than 9,000 agency personnel, is the first step in opening up the lines of communications. The idea is by collaborating today we can all plan for tomorrow. It’s often said, “You can’t skate to where the puck is, you have to skate to where it will be.” In the same vein, if we don’t start collaborating now, in five years when we’re all operating in a wireless environment (as an example), agents will continue to be faced with multiple solutions and workflows that make the Labyrinth of King Minos seem like a walk in the park.

Doug Johnston of Applied Systems recently wrote in the Insurance Journal that using technology and understanding technology are two different things. He noted correctly that agents should not be expected to understand the frameworks and specifications of XML and related technologies. However, I think it is essential they be a part of the planning process in developing these technologies, so that everyone’s needs are met.

The final survey results, to be announced at the ACORD Annual Conference, May 19-21, will offer insight to vendors and carriers and hopefully make a difference in their business strategies and product development. To view a presentation on the preliminary results of the AUGIE Survey, visit www.ACORD.org/augie and click on the ACORD Presentation Center. If you’d like to receive a copy of the results once published, just send an email request to AUGIESurveyResults@ACORD.org.

Rick Gilman is vice president of Corporate Communications for ACORD, the insurance industry’s standards-setting body.