Insurance companies over the past few years have taken different steps to increase or maintain their business as well as their profits. For example, some of the larger national companies have adopted multiple distribution channels--using independent agents and marketing direct to the customer. But, for smaller regional insurance companies, their efforts have remained more focused--continuing to use agents exclusively to distribute products.
One such company is Van Wert, Ohio-based Central Insurance Companies. Central still relies on the success of its agents for business and is taking steps with technology to increase its agents' competitive edge. Using the speed and accessibility of the Internet, World Wide Web and Internet-based applications, Central is taking steps to streamline some of its workflow in order to better service agents and their customers.
Central established its presence on the Internet in 1996 with a simple company Web site (www.central-insurance.com) that included company information, agent locators and other material for general public consumption. According to Gary Corcoran, assistant vice president of procedures, by the spring of the following year, Central began to see the Internet as a network and the browser as technology to assist its agents. "We started in earnest in the third quarter of 1997, and the first rollout was in May of 1998," says Corcoran.
Central agents fill out a single but dynamic quote form online. Laura Ditto, communications manager, says that while the form is not customized to each agent, as the agent fills it in, the form changes to fit the agent's quoting needs. By making the form dynamic, Central has made it possible for the agent to give only that information which is necessary. "We looked at this from the agent's standpoint, and we get only what we need for a quote," says Ditto. And in addition to being dynamic, the form is easy to complete. "Most of it is point-and-click and pull-down menus."
After the agent clicks "submit," the information is sent, processed and a quote is returned from Central's mainframe computer system. For Tom Massotti, president of the High Ridge Agency in Stamford, Connecticut, and a user of the application, getting quotes from the same system his underwriters are working from is more accurate. "Because of Internet access, you are up-to-date all the time," says Massotti. "Software has the tendency to have errors, but we know that coming from the mainframe it is correct."
The results? "Under the best circumstances, a quote request submitted by mail would take around two weeks," says Corcoran. "If the agent faxed it, probably five to seven days. But with our online quoting application, agents are looking at five to seven minutes, plus they are in complete control."
According to Ditto, the process now takes 75% less time to enter data online than the paper-based workflow. Even first-time users are finding it easy to use, mainly due to the dynamic nature of the form. "There are no codes, no navigation to 14 different screens--just one," says Ditto.
Leon Simms, president of the Ardmore, Oklahoma-based, Rudy J. White Insurance, agrees that the program is easy to use and that quotes are returned quickly. "Almost as soon as I logged onto Central's Internet-based program, I wrote four (commercial) auto policies," says Simms.
Massotti was a little apprehensive at first. "We had already sent the apps in for some quotes and then we used the Internet and filled out the application online. Some companies' software will actually be higher than calling it in, so we wanted to make sure the numbers were the same." They were.
Quick turnaround on quotes has meant increased business for Simms and Massotti--as well as Central. Both admit that while Central is one of the top companies they write for, the Internet quoting capabilities have allowed them to send more business Central's way. "The online application has been exceptionally helpful for several small commercial accounts, where timeliness was a key issue," says Simms.
"For commercial clients, the thorn in our side has always been the auto; auto was always the last, but now it is much quicker. Applications, because of time constraints, are now taken to the computer for processing. Having to do things like faxing and following up are gone," says Massotti.
However, not all of Central's agents have been quick to adopt this new approach. Ditto notes that the agents she's demonstrated it for are excited about the technology, but the level of usage is still not what she had anticipated.
One of the major problems Ditto sees is that in many agencies Internet access is not available on every computer, which hampers some of the application's utility. Simms, for example, has a dial-up account with a local ISP and is set up on only four machines. However, Ditto sees this as being a short-term problem because the number of agents online is increasing at a fairly steady rate.
Another issue for agents is that of not wanting to invest the funds in technology improvements. Three years ago, Simms was debating what to do with a number of "green-screen, dummy terminals." But a year ago, he brought in a number of new Pentium-class machines and switched over to AMS for Windows. For agents, Internet access and streamlining workflows become at best secondary behind selecting a new management system, dealing with Y2K issues or being acquired. Basically, according to Ditto, it boils down to agents saying, "We just don't have the technology yet."
Massotti's agency, however, is electronically streamlined--from its transactional filing systems to its local area network to Internet access at every desktop. This is different from the many agencies that tell Ditto that they want to wait to see what the technology does.
When the product was unveiled, Ditto recalls, "We thought everybody would come to us." While Ditto sees this from a company perspective, Simms alludes to one more snag from the agency perspective. When agents hear of companies going online with quoting and underwriting tools, the trend is still to wait until the other companies they write for are online as well. Simms says that while he may get a quote from Central in five minutes, sometimes he still has to hold it for three or four days until the other quotes come in via other means.
Even though Central's online process offers agents the tools to better service their customers, getting to this point hasn't been an easy road. Before anything happened, Central rounded up a council of agents to discuss what it was they wanted online. As Ditto notes, the "technologically advanced agents were very vocal; the agents that were not up (on technology applications) or resistant were mostly quiet or just sat back."
Massotti was a little bit more open about the development. "When they started, they had some problems, but now things are really great," he says. "The first few times we used it, we both had some errors, but we were able to give feedback and suggestions."
Even as the forms were being generated, Ditto says the Central developers would visit agencies to have them try it out. Ditto's group incorporates feedback for improving the utility of the form. "We monitored the ease of use, and tweaked the forms as needed from observing," she continues. "As we find areas, we can fix and implement changes, usually within a day or so."
Massotti says that the downside to Central's application is that if a change needs to be made, the form has to be refilled or the underwriter has to be called. Central has responded and will be introducing a way for agents to re-open files and update fields without refilling the entire form.
Another concern was with the way the form is customized. The password and user ID alert the system as to which state the agency is in. This used to limit agents located on a state border as they were able to use the form for only the state in which they were domiciled. Central has since responded to feedback from its agents and now these "border agents" have the ability to use the state form as needed.
Currently, online quotes are available for commercial auto only. However, Central will be expanding what is being offered. In early 1999, Ditto says, Central hopes to have quoting for businessowners. They are working to put direct billing, policy inquiry, account status and even cancellation notices all online.
Ditto and Corcoran say that it is all about responding to the needs of agents. "Independent agents have always worked person-to-person," says Ditto, "so we've attacked some of the inherent problems in the system by taking out redundancies and the potential for errors." Ditto says this gives agents the ability to concentrate on their strengths--building business relationships.
Both Simms and Massotti agree that for them, the online tools have streamlined how they do business. In a world where time is money, online responses mean money--lost or gained. "Even when Central wasn't the most competitive," says Simms, "they were the most timely and the easiest to quote."
Ditto agrees with this assessment. "We are never going to be the bottom dollar, so we looked to technology to earn the account. We want to service their socks off. This is the proof that our technology investment was right in that we earn their business through service."
Ultimately, the more technology streamlines Central's agency-company interface, the more profitable its agency-company system will be. At Central, Ditto says Internet applications like the ones it offers its agents gives "more capacity for our agents and us to grow--without the added expense."
"The more we touch it, the more it costs," says Massotti, "and if we keep touching it, the more chance there is for errors." He sums up Central's efforts by saying that the company has used the Internet to create a greater level of efficiency for its agents.
The online tools offered by Central free up underwriters and support staff to tackle more difficult or specialized policies. Instead of an underwriter investing time in what Ditto refers to as "plain vanilla stuff," Central has automated what it believes the agents can handle. "We want to compete with the big guys," says Ditto. "By automating processes, we are able to keep staff and expenses down." *
The author
John Chivvis is a Texas-based writer who specializes in topics of technology implementation. His work has appeared in a number of national and regional publications.
©COPYRIGHT: The Rough Notes Magazine, 1998