TO THE POINT
ASCnet president says using current
technology enhances the bottom line
By Peter Anderson
One of the single best measures of profitability is revenue per employee, and if you're not fully using your automation system, there's no way you can achieve the maximum revenue-per-employee numbers.
Independent agents who say, "I'm in the insurance business, not the automation or computer business," are only partly correct. The only way agents are going to survive is to maximize the use of technology. If you don't, your agency or brokerage will become one more statistic.
The key is profitability. Profitable agencies will survive. One of the single best measures of profitability is revenue per employee, and without using a solid automation system as close to 100% as you can, there's no way you can achieve the maximum revenue-per-employee numbers. Achieving maximum revenue-per-employee numbers has been a goal during my 27 years in the business, and especially since my agency became automated some 17 years ago. By using your agency management system to its fullest and operating efficiently, $100,000-plus revenue-per-employee should be a minimum goal for any agency--small or large, and even primarily personal lines. It's readily attainable.
Agencies that continue to use old agency management systems frustrate the companies that serve them as well. Insurance companies no longer can maintain myriad platforms--they need to focus their attention on the latest and greatest from whatever the agency management system choices are.
Agencies get stuck on old versions. Their owners believe "if ain't broke, don't fix it." But they're missing opportunities. Those opportunities allow you to do what even a few years ago you couldn't do, whether that's creating a marketing program, imaging, linking to files, proposals, endorsements, multiple-carrier quoting, and more. Agency management systems have so many capabilities that you really need the latest release to operate at peak levels.
Agents who are staying with DOS--and there are a number of them out there, though fortunately, a declining number--are significantly limiting their future. DOS was written more than 20 years ago. The limitations are too numerous for companies to try to shoehorn updates and program enhancements into a system with a DOS engine.
Then versus now
What's keeping these agents from changing faster? They're living in the past. Some agents remember what they spent five or 10 years ago--when a file server was $5,000 or $10,000 or even more. Today that same machine, with much more power, is available for under $3,000. Many agents don't realize they can set up their workstations for well under $2,000 as well.
The cost factor really has become significantly less. You've already bought your system--and in most cases the upgrades are built into support fees or are available for a reasonable upgrade fee. Better than half of my support fee goes to system development and upgrades. So if you're already paying for the upgrade, why not use it?
As ASCnet president, I intend to do everything I can to encourage Applied System users to adopt the latest release or the latest release minus one.
But you can't use the system features if you don't know how. So education is important. Unfortunately, agents aren't investing in education to learn how to use their agency management systems most efficiently. This is one of biggest struggles that agency management system vendors and user groups face today--encouraging people to invest the time to learn about emerging technologies. This knowledge is essential to a willingness to embrace updates, and without the updates, you can't take advantage of the opportunities and efficiencies the updates can provide.
Mission accomplished
As far as straight-through processing or single entry, multiple-company interface is concerned, we are finally there. It's no longer a pipe dream or conjecture. It has taken 20 years to achieve it and the road has been loaded with land mines. Thanks to IVANS Transformation Station, I now have the opportunity to take information right from my database, transport it to my companies, and receive information back in as few as 10 seconds. And with the recent signing by DORIS and AMS management systems to use IVANS Transformation Station, a majority of the agencies throughout the United States soon will have an "enter it once and done" option with our carriers.
Using proprietary Web browsers offered by your companies is not the solution. Agents have struggled for years learning and maintaining proprietary interfaces with insurance companies using a variety of methods and modems and the Internet. The learning curve necessary not only to learn these proprietary systems, but also to continue to use them, is significant. Even though I'm not your average user--I'm extremely focused on automation, and technology doesn't daunt me--I must say I have difficulty in sitting at a CSR's desk and entering the necessary information. I end up with a pretty screen, but that's where it ends. I need a help desk or a full manual to help me wade through the required commands and keystrokes. Spending 10 or 15 minutes taking information from my database system and reentering it into the proper Web browser, then trying to figure out why I'm not getting the desired result, quote or rate makes no sense to me.
At the end of 2001, some 20 companies were licensed to use IVANS' Transformation Station. Transformation Station offers a single, secure connection point for real-time, immediate and batch mailbox transactions between agency management systems and carriers' back-end policy systems that can be accessed from the public Internet, private network, or virtual private network (VPN). These 20 companies are in varying stages of implementation of select coverage lines. More companies are coming on board every month. This momentum is exciting. Transformation Station is rolling now.
Buoyed by the success of our personal visits with carrier executives during the last two years, the leadership of ASCnet will continue our tour in 2002. This year, we will visit with a dozen companies in Michigan, Indiana and Ohio.
As ASCnet president I'm also spending a good deal of time with our 73 chapters to try to get these messages out--and talk about the efficiencies and benefits to straight-through processing or single entry, multiple-carrier interface.
We independent agents certainly do have challenges. More competition is coming all the time from some fairly significantly monied players--banks and the like--and we have to respond to the consumers who always want more service.
In order to compete, we must use our systems to the fullest. You must make time for technology. You must automate to operate efficiently or you'll be left in the dust. The future is here, and I hope you'll join me in embracing it.
The author
Peter Anderson (panderson@insuremass.com) is president of Anderson Insurance Services, Inc., an independent agency in Marshfield, Massachusetts, and president of Applied Systems Client Network (the Applied Systems user group), Altamonte Springs, Florida.