By Nancy Doucette nancyd@in.net
Ed Browning, president of S.I.S.
"Begin with the end in mind," writes Stephen Covey in The Seven Habits of Highly Effective People. In other words, "begin with a clear understanding of your destination."
For Columbus, Ohio-based Strategic Insurance Software, Inc. (S.I.S.), the destination was SEMCI (single entry, multi-company interface). The vehicle would be SEMCI Partner.
S.I.S. President Ed Browning explains that SEMCI Partner was developed in response to a survey which State Auto Insurance Companies distributed to its agents several years ago. Part of what the survey revealed was that 40% to 50% of the agents responding couldn't afford to buy an agency management system. "As a business, State Auto couldn't afford not to be involved!" Browning says.
State Auto had a strong commitment to interface, he continues, and realized that its agents had to have a means of communicating with them and getting information back from the company. To accomplish that goal, S.I.S. was formed and became an affiliate of State Auto Financial Corporation. Its charter: to develop industry standard products. By supporting ACORD Standard download and having the APT software included in the system, S.I.S.'s SEMCI Partner is accessible to multiple insurance companies and agencies.
"Some people may be scratching their heads and wondering: 'Why would State Auto build a product that would be used by its competitors?' The computer is no different than a telephone," Browning stresses, "and we all use a telephone. We're approaching the process from a non-proprietary position."
In developing SEMCI Partner, S.I.S. focused on two key elements: standards-based, non-proprietary interface capabilities and affordability. With a license fee of less than $2,500 for a single- or multi-user system and monthly support fees in the $200 to $300 range, depending on the functions the agency selects, Partner meets the affordability criterion, according to the agents we spoke with.
When agency principal Ron Mooney of Columbus, Ohio-based RHK Group was examining the agency management system marketplace in 1995, he discovered he'd need to spend between $30,000 and $50,000 for software for his eight-person agency. And of course he'd have to replace the hardware, which would drive the cost up further. His aged mini computer didn't even use a floppy disk. It used platters.
As a State Auto agent, Mooney had received literature about SEMCI Partner but he was skeptical about the price. He had worked with one of the Partner developers several years earlier when they both were affiliated with another national insurer. Mooney contacted Craig Heere and asked that nagging question: "How can S.I.S. afford to do this so inexpensively?"
Heere explained that S.I.S. leverages technology to keep costs down. They don't have a fleet of outside salespeople, preferring instead to use a variety of direct marketing techniques and offering group demonstrations. S.I.S. has minimized the training costs--for agents as well as themselves--by using remote access for training and service. Remote access training eliminates the need for agency personnel to travel to receive their training. It also makes training new staff members easier. The S.I.S. representative remains at the Columbus, Ohio, headquarters and essentially takes control of the caller's mouse. S.I.S. sees what the agent sees on his or her screen and is able to train or fix problems remotely.
The agency of which Chris Carleton is president had been using an easy-on-the-budget DOS-based system when she began her search for a competitively priced Windows-based system about two years ago. She too represented State Auto and had read about SEMCI Partner in State Auto's agency publications. Finding an attractively priced, Windows-based system prompted The Matson & Carleton Financial Group to be among the first 20 agencies to have the Partner system.
Ed Browning sums up the pricing issue this way: "If an agent can save an hour a day using SEMCI Partner, the agent can pay for the system. The return on investment is immediate because there are no sizable up front costs for the agent. It's harder to get a return on your investment when you're laying down $25,000 to $30,000."
And as for the interface capabilities? SEMCI Partner is certified for download with 50 regional and national companies. Browning reports that 100% of the agencies using Partner download with at least one company. And the "average" Partner agency is downloading with two to three companies, and uploading with at least one. "Partner leads the industry today in what may be the most difficult to achieve interface goal--policy change processing," Browning reports. "To be able to achieve our interface accomplishments in just two years says a lot about technology, and a lot about the industry standards that are out there."
Ron Mooney's agency is downloading with seven companies. "The companies tell me Partner is one of the easiest automation vendors to start the download process with," he notes. "When they go to get certified, it's smooth sailing."
Matson & Carleton is downloading with three companies. That has enabled the agency to "turn off the paper streams" from those companies. "We no longer get anything other than the original policy in the mail," Carleton explains. Her agency also is taking advantage of another time-saver: policy change upload. "It's easier than getting the HO change request form, completing it, then going to a rating program to calculate the premium. With Partner, you just go to the screen and input the information. At the end of each day, everything that's due to be uploaded is queued. Later that evening, the transmission takes place."
Of the three companies Matson & Carleton is downloading with, only State Auto is set up to receive change data and from Carleton's perspective, that's a drawback. Her other two carriers have proprietary upload systems which means the agency has different workflows for those carriers. From an ease of use standpoint, State Auto is making it easy to do business with them and as a result, they're getting more of the agency's business.
SEMCI Partner is certified for policy upload with eight companies currently. By making policy change processing available to Partner users, S.I.S. is demonstrating its interest in doing what's best for the agent, Carleton maintains.
Partner's pricing structure enables agents to decide what's best for them as well. "We don't charge agencies for functions they don't need," Browning notes. Accounting is a good example. It's a separate feature on the system; and based on S.I.S.'s information, about 50% of the agencies don't need accounting because they're exclusively direct bill. "If the agency doesn't need accounting, it doesn't pay for accounting," he says.
S.I.S.'s focus on agent needs may help explain their recent change in marketing direction. Initially, SEMCI Partner was distributed exclusively to insurance companies. The companies, then, distributed it to their agencies. Earlier this year, in response to calls from agents expressing interest in SEMCI Partner, S.I.S. initiated a full sales effort. SEMCI Partner now is being marketed to agencies in addition to being marketed to companies.
"We have more than just an agency system," Ed Browning explains. "We offer insurance companies numerous interface products and services that help them understand that their internal system has to be reengineered in order to get ready for the paperless workflow. And for companies that want to start a full-scale agency interface program, we can help them from soup to nuts."
An often overlooked benefit of having interface capabilities is the ability to answer what Browning says is the #1 question an agency receives: "Did you get my payment?" Using ACORD Standards, S.I.S. enables companies to download payment and billing information daily to SEMCI Partner. There are two other companies besides State Auto using this capability today. S.I.S. intends to get more companies using this ACORD Standard so that more agents will be able to handle that #1 question themselves without having to contact the carrier.
With some 600 systems in 25 states, SEMCI Partner does not have a formal user group in place. However, Browning explains, S.I.S. relies heavily on the input of groups of users. Focus groups look at many of S.I.S.'s products and features and provide guidance in developing and prioritizing these tools. "The focus groups are the most vocal," he says. "They tell us what they like and dislike about a particular product or function."
Even without a user group, though, the users of SEMCI Partner will be able to take part in the first user conference tentatively scheduled for the November/December timeframe. "It will be an information sharing experience," according to Browning. Users have expressed interest in learning more about how to use the tools which Partner provides.
Chris Carleton appreciates S.I.S.'s ability to listen. "S.I.S. hears my input and tailors the system to the agents' needs. Generally when you have a software program, it's not designed by the people who are going to use it every day."
Ed Browning points out that the fast approaching new millennium is ushering in a harsh reality for most agents: agency management systems based on older technology will no longer work and must be replaced very quickly. Many agencies today are discovering that their vendor did not tailor their system to meet the technological needs with respect to the Year 2000 date processing. However, when SEMCI Partner was developed, S.I.S. built in Year 2000 compliance to meet this important agency need.
As agents now using other systems begin to address their own Year 2000 issues, Browning expects them to face significantly increased system costs--especially those agents who delay too long,. And, it will cause another shift in the current vendor population. Browning observes. "The Year 2000 issue is changing everybody's perspective on the industry."
And so is the Internet. Perhaps its biggest asset is its ability to reduce communications costs between agencies and companies. "The Internet isn't going to replace SEMCI. It's just another workflow," he continues. Initially S.I.S. will use its Web sites (http://www.semci.com and http://www.sisware.com) to distribute software and facilitate policy upload for companies that are Internet ready.
If your first name is SEMCI and your last name is Partner, your goals are readily defined; you almost have to begin with a clear understanding of your destination. According to Browning, S.I.S. has a clear view of the road ahead as he shares one of the vendor's near-term goals, based on Partner's abilities: "S.I.S. looks forward to accepting an interface award at the ACORD conference next year." *
©COPYRIGHT: The Rough Notes Magazine, 1997