ACT Outlines Issues for Agents, Brokers to Consider When Evaluating ASPs

July 17, 2003

The Agents for Council Technology (ACT) has published a new report to help independent agents and brokers assess the benefits of using an application service provider (ASP) and analyze the issues that should be addressed to ensure that the ASP provides the agency with the secure, dependable and responsive solution it is seeking.

ACT, which is affiliated with the Independent Insurance Agents & Brokers of America (IIABA), formed an ASP Work Group to devise a question-and-answer checklist to assist independent agencies in evaluating a move to an ASP for off-site technology applications and support. The ACT report—Evaluating ASPs: Issues Agents Should Consider—recommends a series of questions for agents to ask when transitioning to an ASP and then provides some perspective on those questions. An ASP is any partner that provides off-site core technology solutions and support for an agency.

“The business of ASPs is growing within the insurance sector, as there are compelling reasons for an agent to utilize an ASP service. However, all ASPs are not created equal,” warned Richard Roy, chairman of the work group and chairman & CEO of idNET, Inc. dba Afni Insurance Group based in Simsbury, Conn.

“More and more insurance agencies are placing mission-critical business applications in an ASP environment without necessarily understanding all of the potential pitfalls,” added Roy. “Agencies must truly understand the potential hazards, as well as the benefits, of an ASP service. Only then is an agency prepared to carefully review each ASP, select a vendor and execute an agreement that best meets the agency’s business needs.”

In using an ASP, particular hardware and software that an agency uses are housed off-site. ASPs extend far beyond online agency management systems and can include such other agency applications as rating, Web sites, e-mail, office suites and specialized insurance software. ASPs can be hosted by the vendor providing the software, a third-party ASP vendor, or a carrier.

The ACT report is divided into four major sections:

·Is an ASP Right for Me?
·Ascertaining the ASP’s Performance and Service Commitments
·How Are Problems Handled?
·Implementing an ASP

The checklist also includes guidance about Internet service providers (ISPs).

“A significant number of independent agents are now using an ASP for their agency management systems to smooth out their costs and to take advantage of the latest technology features, including off-site access, trouble-free backups, security protections, and enhanced redundancy in the event of catastrophe,” said ACT Executive Director Jeff Yates. “Virtually all agents seem to be using an ASP for at least some applications. This is a major trend impacting independent agencies that can free up considerable time for agency staff to focus on insurance issues. We believe agents will find this new ACT checklist to be a considerable value as they evaluate the pros and cons of using particular ASPs.”

The complete ACT report is available in the “What’s New” section of the ACT Web site, which can be accessed at www.independentagent.com by clicking on the Agents Council for Technology tab.

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