Applied CEO looks at industry progress and future outlook
In 2011, when Reid French was gearing up to join Applied Systems—and the independent agency channel—he was eager about the opportunity, in large part because of his view of the industry. “What insurance agents do, and what insurance does in general, is noble,” he explains. “I truly believe that. Insurance helps people put their lives back together when something really awful happens.”
The nature of the independent agency structure also contributed to the positive view. “I quickly learned that many of the agencies that had been long-term Applied customers were family-owned businesses,” he recalls. “Often they’re multi-generational businesses that go back many years. I found that to be really admirable.”
He describes this as a manifestation of the American Dream. “If you forget the corniness of it,” he says, “there’s something remarkable about a business that’s been in someone’s family for generations. Today the granddaughters and grandsons are running it.” Sometimes it’s the great-greats.
French wasn’t worried about perceptions that independent agents were dinosaurs. And he still isn’t. “The statistics just don’t support the theory that independent agents are going away,” he observes. “In fact, total employment in the industry is up. Unemployment is less than 2%. It just doesn’t get any lower than that.”
He also challenges the notion that the industry—and the independent agency system in particular—has been slow to adopt new technology. If it’s true, he notes, it’s not a matter of will. “It’s just harder,” French says. “The insurance ecosystem is more complicated than other industries.” And that has complicated automation development and implementation.
“Take banking, for instance,” he says. “Your relationship with your personal bank is one to one. You do your banking with one bank. That single bank provides a range of banking services to you. You deal with the team at that bank.” And you use its technology.
Insurance is different. “Very different,” he comments. “An agent has a one-to-one relationship with a client, but it’s one-to-multiple with insurers. You may have one insurer for the auto policy, one for home, and so on. The ecosystem is not one to one. Making the connections work from a technology perspective is a lot harder, and that may lead to the bad rap.”
Today French leads a global team of 1,400-plus professionals who are helping to drive those connections throughout this complicated supply chain. “We’re the people behind the scenes who, from a technology standpoint, help agents carry out their honorable mission,” he says. “I find that to be rewarding, and I know a lot of our employees find it to be rewarding as well.”
After nearly six years on the job as Applied CEO, French says the industry has been everything he expected it to be, and then some. “What I’ve found particularly rewarding to watch is how technology has increasingly been embraced by the industry,” he remarks. “We’re now in that mainstream phase, where people are no longer questioning the need for certain types of automation.”
For example, French sees fewer agency leaders questioning the need for a client portal. “It wasn’t that long ago that people said, ‘I have a website, I have an agency management system, and that’s really all I need.’ I think that’s changed,” he says. The technology was available five or six years ago, but adoption was modest.
“It was clear early on that client portals—the ability for insureds to gain access to documents, pay their bills, collaborate around a claim, add a vehicle, add a driver, simple things like that—would be table stakes in the future,” French notes. “We knew that customers would not understand why they could not gain access to their information, how and when they want—even at night in their bunny slippers.”
Driving and promoting customer portals became an important part of Applied’s early focus. “I’d say we’ve made great progress with it,” he comments. “We now have more than 1,300 agencies using our client portal, which is great. It’s an area we focused on first and foremost.” And it’s something the team at Applied expects will continue to gain traction going forward.
French says agency leaders also are not second-guessing whether employees need mobile access to their systems. Five or six years ago, mobile platforms weren’t the norm. “Today they’re more in the mainstream phase,” he says. “We’re well beyond the early adopter phase, and we’re into the phase where it’s understood that customers expect mobile access.”
One element of this involves agency staff. “Mobile includes providing a way for agency employees to gain access to information while they’re on the road—to look up a client, look up policies, look up the carrier—in a mobile app format,” he says. “We’ve been offering that for some time, and it’s been great.” Applied boasts nearly 10,000 users of its mobile product for agency employees.
But it’s not just about agency employees. “It’s also about the insured,” French asserts. “To go back to that banking analogy, your bank offers a client portal for bill pay, but you can also do that with a mobile app. Your local bank has an app you use to move money around; you can take a picture of a check to deposit money.”
Applied took the same approach to bring value to clients of its management system customers. “We call it Applied MobileInsured,” French says. “It’s a mobile app for the insured that delivers policy details and documents at the tap of an icon. We see it as a way that agents and brokers can deliver a better customer experience.”
The need to apply analytics to agency or brokerage data also is coming into question less often, French notes. “For many agency leaders, the ability to analyze their business with graphs and charts on demand has replaced the use of tabular data on Excel spreadsheets,” he says. “It’s definitely more mainstream than it was five or six years ago.”
He points to the overwhelming amount of data that exists inside an agency management system. “Mining that data and understanding what it means is really critical,” he says. “The use of data analytics helps principals and managers make much better operational decisions for their business.”
He offers a simple example. “A good analytics product can depict all of your customers and all of your opportunities by location,” he says. “For instance, it can provide a view—right on a map—of zip codes where the agency is experiencing growth.
“The agency might not have a physical presence there,” he adds. The data, which is easily and quickly viewable, can help guide decisions about where to put offices to capitalize on growth opportunities. “I’ve always found geographic views to be interesting,” French notes. “And you could never get a tabular report to show you that.”
According to French, growth over the past five or six years comes out of a desire to make automation easier for agents. “Our philosophy has been: ‘Don’t use multiple systems to track customers’ policies and opportunities. Use one system. Have one view of the truth.’” He points to the Applied Epic product as a tool that helps drive that initiative in the U.S. and Canada and next year in the United Kingdom.
“We’ve seen good growth in that area,” he says. “And it’s all because of that design philosophy. You can track sales information, you can track P-C insurance, you can track benefits, you can do all of your accounting, you have best practices reporting—and it’s all in one system. It’s not four different systems doing four different things.”
Another key focus is what French calls “the connected insured.” He says Applied has worked to make interface—an agency management system working with a policy administration system—perform well. “We’re definitely seeing progress from where we were five or ten years ago,” he says, “and that’s brought real benefits to the entire ecosystem.”
He points to improvements being driven by the IVANS unit, which drives the exchange of P-C data in the United States. “We have significantly advanced that process,” French comments. “Data exchange used to be only about updating fields in an agency management system. Now we can pass documents, called eDocs, from an insurer directly into an agency management system, into the appropriate client record, without anybody touching it.”
With the Applied system, he adds, agencies can take that information and expose it to the client portal, also without anybody touching it. “When a customer renews a policy, it goes from the insurer to the client record in the agency management system and then out to the portal, and the customer is notified that he or she has a new document to read. It all happens with nobody touching it and no scanning.”
French expects to see agents and brokers continue to embrace technology. “They realize they need to do it for two reasons: The primary reason, he says, is that “it’s good for the business and for customers. The second reason is that if independent agents don’t embrace technology, someone else will. Some people say technology is disruptive. It can be, but not if the agency adopts modern business practices in its technology stack.”
He cites the taxi business as an example. “If you think about it, there’s no way that taxis could not have made the process of getting a taxi and paying for a taxi easy,” he says. “But they didn’t do it, and they now have a real problem on their hands, called Uber and Lyft.”
According to French, people in the insurance business have observed this phenomenon and understand it. “I don’t think agents will let something like this happen,” he observes, “because they’re adopting customer-focused technology as they go. Technology disruptors haven’t had an ounce of material impact on our industry, and I’d underscore the need for agents to adopt technology appropriately to make sure they don’t.”
He recommends observing insurtech advances closely. “Watch some of the good things they’re doing in terms of servicing customers online, in terms of rate-quote-bind online, and pick off parts that seem to work and that customers seem to appreciate,” he advises.
“If customers get a great experience from their local agency and that agency continues to modernize its operation, and presents a true omnichannel experience with product choice, good prices, personalized service, and online transactions, why would the customer ever want to leave?”
He adds, “Remember, technology is your friend. In many instances, people who say it’s disruptive don’t have a good understanding of history. Independent agents have been adopting technology for quite some time, and it’s made them more profitable, more effective, and better able to service their clients. The key is: just keep doing it. Keep using technology to improve efficiency and the customer experience, and everyone is going to be just fine.”
By Dave Willis, CPIA
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