No tool is more indispensable to an insurance agency than a computer; after all, it’s where the rates come from.
So imagine what went through the heads of thousands of Massachusetts independent insurance agents after they learned the state’s top regulator would with breakneck speed deregulate the state’s one-price-fits-all private passenger auto insurance market, a market in which they write more than 80 percent of the business. How would they give a quote under a totally new and competitive rating system? How would they rate policies with different rules and variables? How would this change the day-to-day running of an agency?
Perhaps nowhere in the state did these questions ring louder than in a small, 8-person office in the center of Needham— headquarters of Boston Software, makers of WinRater, the auto-rating software used by more than 90 percent of Bay State insurance agencies.
“The last six months has been a wild ride,” said Charles Walsh, who co-founded the company back in 1995 with business partner Tom O’Connor. “The commissioner made a decision and we were on the hook. We had to throw out our old product and start anew. We had benefited because we also sell a similar comparative auto product in Connecticut and Rhode Island, but we had to modify it because the rate structure wasn’t as complicated here. Basically we had a new product to make.”
And not a lot of time to make it. The changes to the state’s auto market were finalized at the tail end of last summer, with an April 1 implementation date. That left the company with barely eight months to redevelop and redistribute its comparative auto-rating program. Comparative rating software is a key tool for agents who use it to produce quotes for customers and to match policies to declarations pages to find discrepancies in coverage.
Producing a new comparative auto-rating program was only part of the battle. The biggest challenge lay in acting as a go-between among carriers, regulators, the Registry of Motor Vehicles, other vendors and the more than 1,500 agencies where WinRater was installed. Each of those entities was trying to figure out how to change business practices to perform under a new and fast-approaching Bay State insurance regime.
“So much of the work we had to do was going back and forth between carriers to get rates to quote accurately,” Walsh said. “It had more to with rolling up our sleeves and working with carriers at first.”
Complicating the problem was that carriers didn’t have to file their rates until Mid-November. “So we didn’t know what we had to build,” Walsh said.
Once those rates came trickling in, the software-making started; and the April 1 deadline loomed.
It wasn’t cheap. Boston Software was forced to double its staff to 16, hiring programmers to build out the new version. They worked nights and weekends. They went back and forth with the state, the companies and their insurance agent-clients.
“We had to work around the clock and babysit this thing,” Walsh said. “The fact of the matter is this is a rating product and should be as accurate as possible, as close to the dollar as possible.”
While the core of the new rating product was ready before April 1, much of the functionality that had been in previous versions — like motorcycle rating, for instance — had to be left out until after the deadline, and updated through software patches the company added later — and continues to add, said O’Connor.
“We decided the best way to do this was to get the software built as best we could and then prioritize adding in the updates,” he said.
To get the message out, the company started a blog (“Lane Change“) and sent out e-mails and blast faxes alerting agents as the new changes to the software — sometimes several times a week — became available. Then came the phone calls — thousands of them. Twelve phone lines flow into the main office of Boston Software. For 10 hours a day every day for six weeks, every single line was in use as agents called in with questions about installation and rating. It got to the point where Walsh and O’Connor had an employee spend all day fetching messages from the company’s general voicemail box, where callers would be directed when no staff member could be reached. Those calls were returned on employees’ cell phones, since it routinely took two hours for an office phone line to open up.
“It was beyond crazy,” said Office Manager Heather Concannon. “Agents were getting very frustrated by the process, a lot of them were unfamiliar with some of changes — not just the software, but the way auto insurance is rated under the new system — so we had to walk them through it in some points.”
Carol Bender, who worked on the software, said the changes to the system and to the software amounted to “a total upheaval” for agents. “When these changes were first announced, I couldn’t imagine what the changes would be like,” she said. “It was a little messy, but I am proud of the way we handled it.”
In the end, said Walsh, it all meant a wholesale change for his own company – from the number of employees, to the cost of the product, to the way Boston Software interacts with agents. “It meant a major upheaval on our end as well, but there are so many agents — and ultimately drivers — who depend on our product that we had to do it,” Walsh said. “And I think, for the most part we’ve done a good job.”
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