Most carriers recognized long ago that making it easier for agents to do business with them has competitive advantages. Companies have made an effort to simplify the submission and underwriting process, and they’ve created online systems for personal and small commercial lines. For the most part, this has been a good thing for the agent and ultimately the insured.
With agents still taking notes by hand at prospects’ offices for larger commercial and specialty accounts, and carriers requiring data entry into unique systems and the completion of carrier-specific forms, the easy-to-do-business promise seems like a pipe dream. Here, an insurance tech company executive, Linda Dodson, provides recommendations for getting complete commercial submissions to markets faster, including common data standards.
However, the sales process normally begins in the prospect’s office, not online. And what about those lines of business that don’t fit neatly into the underwriting box? Carriers have focused on reducing their acquisition and processing costs in these lines, too, but in many cases at the expense of the agent. Agents and wholesalers often have to rekey data into multiple systems since each carrier has its own unique online system. It seems that ease of use has given way to squeezing margins and streamlining operations.
Yet companies can save money and make it easier for agents to do business if they take the time to reduce the pain points in the acquisition process. For example, improving the collection and accuracy of data can lead to fewer incorrect submissions, fewer touch points in underwriting and significantly faster turnaround times on quotes.
One of the biggest complaints I hear from carriers is that agents submit incomplete applications. In particular, the sale of commercial and specialty lines requires the producer to spend considerable time collecting information about the client’s business, and usually it’s done with pen and paper at the client’s location.
When the producer returns to the office, customer service representatives take those handwritten notes and key in all of the data necessary for a submission. They may need to follow up with the producer to fill in missing information since every company has its own supplemental applications. The producer may have to contact the client several times to obtain the needed information to complete the forms. Then there are the lines of business that the management system doesn’t support, such as specialty, professional, agriculture and cyber. The CSR searches for these on the carrier’s website, prints them, and then scans and attaches them to the management system, along with all of the other supplemental applications.
Not until all of the information is keyed into the management system, and any carrier-specific forms are completed and attached, does the submission go to market. Then it has to be rekeyed by the carrier. By the time the data gets to the underwriter, it’s been touched multiple times and hours if not days have passed.
Today, many carriers are using robotics or are offshoring the work of reading and rekeying data. Even after it’s rekeyed, it’s not 100 percent reliable. Data may not be in the right fields, or it may be missing. This means the underwriter must contact the producer to get the correct information.
As a consequence, it can take days to complete a submission and get a quote back from carriers. And those quotes are coming at a high price to both producers and carriers. The industry is wasting millions and millions of dollars on repetitive data entry, leaving itself vulnerable to digital competitors that have the agility and speed to get to market faster.
What can be done to streamline the process and reduce the time it takes to provide a quote? How can companies get smarter about their technology investments? Here are some points worth considering:
- Create data uniformity across the value chain. A good example is the ACORD Standard Initiative, which seeks to establish common standards for data among agents, vendors and carriers. Moving toward a single standard means faster processing of data; greater automation and integration; and fewer costly, redundant steps. Simply having the producer collect information electronically at the point of sale can reduce costs substantially.
- Modernize the client interview process. Let’s face it, sales calls haven’t changed much over the years. But new technology is available that allows producers to capture data during the interview on a laptop. We need to train agents to use this new technology rather than taking notes by hand. Entering the data in sharable smart forms, which can then be digitally transferred to the carriers, would be a tremendous advance—and it’s possible today. These innovations can reduce redundant data entry, allow for the completion of multiple applications and result in faster quotes.
- Equip agents with greater knowledge about risks and underwriting. Agents need to ask the appropriate questions during the interview process, so they can capture everything the underwriter needs. Understanding terms and types of coverage, as provided by the Insurance Risk Management Institute’s Glossary of Insurance and Risk Management Terms, is a good starting point. Again, technology exists for producers to access such information at the point of sale.
- Understand the limitations of agents’ policy admin/management systems. These systems do many wonderful things, but they weren’t designed to be a sales and submission tool. Because the submission process begins in the field, as does data collection, an agent should have the capability to capture editable, digital data that can be shared directly with the management system or a carrier.
- Identify and reduce touch points. There are well over 20 touch points in a typical policy acquisition, from sales to underwriting and binding. I have seen underwriters go back and forth with an agency account manager four or five times, especially if the account manager or agent is unfamiliar with the company’s risk appetite and coverage. Carriers need to know where those touch points are and work toward reducing them. What metrics are they using to measure these pain points, and do they realize how much time is wasted along the way?
I can imagine a future where agents fill out ACORD and company-specific forms during the interview process, review and update them between appointments, send the data to the carrier, and get a quote within an hour. It’s not a pipe dream. The tools are available today to make it happen.