The Connected Business of Insurance
June 29, 2017
Our annual Carrier & Agency Advisory Board (CAB/AAB) meeting brings together insurers and agents for an open dialogue on the group’s collective experiences, challenges and opportunities in the insurance industry. Without fail, year after year, we glean important insights that validate the direction the industry is heading relative to insurer-MGA-agency connectivity.
And this year was no different. A key topic of engagement was how insurers can better support digital agencies. While this may sound one-sided, it’s not. When independent agencies have what they need to compete in the age of digital transformation, everyone wins – agencies, MGAs, insureds and insurers.
Agents identified 3 distinct areas of support they seek from insurers:
At the heart of a digital agency is a centralized management system that all other digital agency capabilities rely on. It’s the hub for all prospect, customer policy and financial data across the business. From an operational standpoint, the efficient exchange of data and information from insurer/MGA policy systems directly into the agency management system is critical for agency success. Agents conduct business with countless insurer and MGA partners. To have data and information delivered directly to the management system results in significant time savings versus having to visit countless different insurer portals. Automated workflows and faster insurer communication enable agencies to deliver better service throughout the insurance lifecycle.
Today, consumers expect instant access to information and immediate service. To effectively meet these expectations, digital agencies need the most current policy information as well as account status details on billing, claims, policy and loss run. Automating the exchange of this information through connectivity technology makes these transactions available more quickly. When agencies have this information at the exact time it’s needed, they’re empowered to not only react to customer inquiries but proactively initiate customer service. In keeping up with client expectations, digital agencies increase renewal retention and grow their book of business.
A concern weighing heavily on the minds of many agencies is the amount of venture capital investment pouring into the insurance industry. It’s definitely on the uptick, with $1.2 billion invested in 2016, up from $590 million in 2015. With these new startups and business models, independent agencies are experiencing new competition. Forward-looking agencies are embracing digital transformation and seek to increase connectivity with insurers and MGAs. However, frustration sets in for agencies when they can’t get the support they need from partners. By support I mean things as simple as making all lines of business available via download, communicating change and more actively participating in the submission process to accurately express risk appetite. Agencies want all available download connections, particularly eDocs download. eDocs and Messages round out a complete and accurate view of customers, ensuring documents are synced between insurers and agencies. That visibility enables agencies to be more competitive by feeding client needs.
Next, as insurers and MGAs transform into digital businesses by replacing legacy systems, communication throughout the entire process with agencies is crucial. Without change management communication from insurers, the downstream effects on agencies could be detrimental on both ends. If an agency has to process 10,000 policies manually for a month because they were excluded from the change management process, it’s unlikely they’ll continue to do business with that insurer. Agencies are just looking for trust, support and communication – the cornerstones of any great relationship.
Last but certainly not least, agents want insurers to be more involved in the submission process. The days of identifying appetite via outdated and inaccurate hardcopy guides are over. The way for digital agencies to truly be competitive relies on actionable data informed by machine learning and artificial intelligence. However, we all know that the output is only as good as the input. Therefore, to be most effective, insurers and MGAs need to fully embrace new tools to identify their appetite to agencies.
What things is your insurance business doing to support digital agencies? Let us know in the comments below.
 Source: Pulse of Fintech Q4’16, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook) February 21, 2017.
Thad Bauer, vice president and general manager of IVANS Insurance Solutions, has had 25 years of property and casualty experience and has played a key role in furthering the adoption of ACORD standards to exchange data within the industry to improve efficiencies. He has helped carriers and MGAs realize benefits through innovative technology and workflow implementations of real-time, download, Web service connections to third parties and maximizing data within their enterprise. Prior to IVANS, Thad was president and co-founder of NxTech, a leading provider of agency-MGA-insurer connectivity and data integration solutions. Prior to NxTech, he spent nine years with BWC Systems and IVANS, Inc. and has worked with more than 350 insurance insurers throughout North America.