TECHNOLOGY
The deluge of paper that's inundated the industry
is on the verge of subsiding
By Nancy Doucette
"There's a slow, slow train comin' up around the bend."
--Bob Dylan
While Bob Dylan wasn't talking about the insurance industry going paperless back in 1979 when his "Slow Train Coming" ballad was released, reducing the amount of paper that courses around the industry has, in fact, been a goal for almost that long. It's been a slow train coming. Veterans of the insurance industry will recall the slogan: "Paper free in '83." Here we are, two decades after that non-event and the movement is starting to gain momentum. Carriers are shutting off some of the paper that has traditionally gone to agents.
Thinking of this in terms of the life of a redwood helps put the apparent slow progress into perspective. "It's relative," quips Jeff Yates. However, as executive director of the Agents Council for Technology (ACT), Yates doesn't take this subject lightly. Several months ago, ACT, which is affiliated with the Independent Insurance Agents and Brokers of America, released a document titled "Turning off the Paper to Agents" in which the key responsibilities for carriers, vendors, and agents are laid out. The document was compiled by an ACT work group made up of 18 representatives from agencies, carriers and associations.
Why bother? According to the document: "... the overall efficiency of the Independent Agency System will benefit from the elimination of paper being sent to the agent, provided carriers follow certain procedures in implementing this change and continue to provide this information to the agent in an electronic format in a manner that is convenient and efficient for the agent."
Travelers Property Casualty has been a leader in the paperless initiative. Bruce Fiori, 2nd vice president, agent/field automation for Travelers Property Casualty, points out that there are obvious benefits to an agency's bottom line when the agency moves to a paperless environment. "By implementing paperless initiatives, an agency will be able to spend less time opening the mail, T-filing or manually filing paper in an insured's folder, and will be able to devote less space on-site or off-site to store policy paper, unless required to do so by regulation. An agency that's currently scanning policy paper would no longer have to absorb the time and expense for that process," he explains.
If your carriers haven't broached this subject with you yet, they will in the foreseeable future. "Going paperless is a major trend on the part of carriers," Yates observes. "The major carriers are moving in this direction."
About a year ago, Chubb & Son began informing many of its agents that personal lines paper would be shut off in the not-too-distant future. Mark Galante, assistant vice president of Chubb & Son, and
e-business manager for personal insurance, recalls that last October, Chubb initiated a download promotion campaign, contacting those agencies that weren't using download and alerting them of the upcoming initiative to discontinue sending agencies copies of certain personal lines documents. Galante says the campaign's success is reflected by Chubb's receiving the Download Company of the Year Percentage Growth award from ACORD and, most recently, the Download Partner of the Year award from the Applied Systems Client Network (ASCnet).
Industry recognition and agent response didn't come without effort on Chubb's part, Galante notes. "We improved and enhanced our download by recertifying with the major vendors and downloading additional information such as underwriting and premium modification, knowing that we and a lot of our agents want to go paperless," he says.
For many agencies, though, their interest in download is tied to what Mele Fuller refers to as the savings experience. Fuller, who oversees agency interface and industry standards for Safeco, chaired an ACT work group that examined agent concerns with data accuracy and consistency in download. "Download is particularly advantageous on personal lines renewals," she explains, "where the policies automatically renew. The agency simply doesn't have to key the data. Download offers not only support of a paperless environment, but time and savings--time savings, therefore money savings--for the agency."
Syracuse, New York-based Haylor, Freyer & Coon, Inc., appreciated download's efficiencies early on. The agency has been downloading for some 15 years and currently receives download from 10 carriers, according to Cyndy Smith, vice president of technology. She points out that agency leadership needs to recognize when and how technology can benefit the agency. "Agencies need to find ways to take advantage of the technology to meet the needs of the agency," she says. "It's a mindset."
But once a technology decision is implemented, that shouldn't mean it never gets re-examined in light of emerging technologies. About two years ago, Bob Palmer, vice president of personal insurance for Haylor, Freyer & Coon, became intrigued with the idea of taking the personal lines area of the agency paperless. He recalls wondering about all the paper arriving from download carriers that still required processing time. As the carriers began providing the agency with access to the necessary information online, Palmer worked with staff to determine what information was needed from the carriers in order to go paperless. "As of now, we aren't processing any paper from any of our download carriers," he says. "That's enabled us to shift people to more sales-related and high-level service oriented jobs, rather than just processing."
Even with the agency's commitment to download, and the staff's reliance on the management system as its single source of information, some of the CSRs were uneasy about giving up the paper, according to Sheila Guenette, supervisor of personal lines CSRs for Haylor, Freyer & Coon. Some of that uneasiness was reduced thanks to the real-time access to billing and policy inquiry that's available through the agency's AMS Sagitta agency management system and TransactNow.
Just as agencies need to re-evaluate technology implementations in light of emerging technologies, so do carriers and vendors, Smith says. "Carriers need to continue to focus on download and provide as much information as possible. There are still some download issues--automatically included coverages as well as umbrellas, inland marine floater, and watercraft--the out-of-the ordinary coverages--that aren't showing in all cases. Carriers and vendors can't overlook this."
Is it possible to be paper free in 2003? Chubb is ready to take its agents forward, Mark Galante says, thanks in part to the carrier's download proficiency. Additionally, though, Chubb has re-evaluated technology implementations in light of emerging technologies. One result is My Alerts--an online document delivery service. "It's 'push' functionality, designed to replace the mailman process, helping to increase the value of our producer portal, @Chubb," Galante explains. "It's completely customizable.
The agency determines what information it wants to receive--policy documents, nonpayment notices, cancellation/reinstatement notices, underwriting reference manuals, and home appraisals--and who should receive it."
Unlike download, the My Alerts service isn't dependent upon the agency having an agency management system. "We wanted to ensure that agents could go paperless with Chubb without having an agency management system," Galante says.
"An Internet connection is a requirement to do business today," notes Linda Dodson, e-business consultant in strategic marketing for Chubb. "Agencies that have elected not to have an agency management system experience a different level of automation."
She continues: "What makes 'now' a good time to go paperless is the ability to combine three technologies: push (via My Alerts), pull (on demand at the @Chubb Web site--the agency service portal, which can be accessed through TransactNow or Transformation Station), and download which automatically populates the agency management system. Agents get the information the way they need it, wherever they need it."
Travelers' Bruce Fiori notes that providing e-service capabilities that reduce paper handling at the agency level continues to be a key initiative for the carrier. He says Travelers was one of the first carriers to provide access to policies online through its agent portal--Agent HQ. Additionally, Travelers was the first carrier to make this policy view transaction available to agents real-time from their management system without having to log onto a Travelers system. "We've built these services at an agency level, allowing us to roll out the turning-off of paper over a number of months and provide our agents with the opportunity to test the process," he says.
What's more, he continues: "The system was also built to live within our agency portal or as a separate application so that it's available to agents who no longer write new business for Travelers. We also have the ability to suppress the paper by market, so agencies that write middle market and large risk policies can continue to receive policy paper, while the same agency that writes small business can be turned off. Regardless of the market, all policies can be found online."
Helping agents access their pertinent information electronically has been part of Donna Barr's life since she started her insurance career in the family agency some 22 years ago. She's now assistant vice president for Marsh USA, Inc., in their Private Client Services practice. Additionally, she's chair of the U.S. Interface Committee for ASCnet. In the past three years, four carriers have shut off the paper to Marsh. "Getting there" wasn't without challenges, but the difficulties have been remedied. And the fact that the Private Client Services practice is downloading with 75% of the carriers will help in the future as more carriers enter the paperless environment. "Accurate data via download makes the paperless process function correctly," she says.
She notes that one of the criteria for going paperless is being able to get a declarations page off the carrier Web site immediately. Even though Marsh worked in advance with the carriers to be sure the agency gets all the necessary data, occasionally there's a problem with a download. Advance preparation is vital prior to shutting off the paper. She says agencies should work off their management system's communications log for 30 days to be sure that everything that comes in via download matches up with the paper that comes in. If the data passes the test, then Marsh requests that the carrier turn off
the paper.
She explains that each vendor system has a download log. On the Applied System that Marsh uses, it's called the communication log. Using a database viewer program enables Applied users to move the information from the log into a spreadsheet program so the information can be sorted by carrier, line of business, transaction type, transaction number, client name, or effective date.
Barr says working off the communication log, rather than with individual pieces of paper, is quicker and more efficient. "You don't have paper all over the place, and you don't have to file the paper when you're done with it," she says.
Claims is certainly an area that has its share of paper. And with carriers looking to turn off the paper to agents, it's likely that claims paper may be a target. So Barr contacted ACORD and received approval for a claims download working group to be formed. She reports that several of the vendor systems are interested in participating, as are several carriers. "Once the standards are set up and we get the claims download, then we can turn off that paper," she says.
"Paperless works only when agency staff can get its hands on the data--which is where download comes in," Mele Fuller declares. And, she says, to get that good download one of the primary agency responsibilities is to be on the most current version of its agency management system.
In addition, Jeff Yates urges agencies to gear up their workflow to deal with the paperless environment. To assist in that effort ACT recently released "The Best Practices of Agency Electronic Information Management." This publication is an agency workflow tool designed to help an agency think through the issues of electronic information management so that they're prepared to handle the transition to the paperless environment effectively. *
Author's note: "Turning off the Paper to Agents," and the "ACT Download Work Group Report and Recommendations" are both available at the IIABA Web site: www.iiaba.org. Click on Agents Council for Technology, then click on "What's New!" Additionally, links to vendor sites--that list the carriers that are doing real-time transactions and what transactions they're supporting--are also available.