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Agency Technology Survey Executive Summary

2006


T

he 2006 AUGIE Agency Technology Survey was created by leaders from agency management system user groups, in conjunction with ACORD, carriers, vendors, association representatives and other participants. The goal of the survey was to identify changes in agency automation that have occured since a similar AUGIE survey was conducted (in early 2002), and to uncover developments agents and brokers felt carriers and vendors should address. More than 7,500 agency, brokerage, MGA and wholesaler professionals took part in the survey, which was available online from

late January through mid-March. The survey, which took participants an average of 25 minutes to complete, included roughly 180 questions four times the number contained in the 2002 survey. But few participants if any even saw 100 questions. That’s because, based on early answers, subsequent questions were either delivered or passed over, so only relevant questions were fed to participants. For instance, some were designed solely for principals and senior management.

Background

T

he ACORD-User Groups Information Exchange was formed in 2000 to research and share information among business partners who play an important role in the independent agency system. A 2002 automation survey was AUGIE’s first major project—an initiative designed to explore, on a wide scale, various agency workflow and technology issues. The survey sought information from management and support staff, and provided the foundation for carrier and

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vendor initiatives built, in large part, around ACORD standards. Actions based on the 2002 survey brought broader and faster implementation of real-time transactions, improvements in commercial-lines download functionality, and better relationships between agents and the companies they represent. Today, carriers and vendors say they are eager to learn the latest survey results as they plan automation development for 2007 and beyond.

© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06


Table of Contents Introduction Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Impact of Technology on the Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

State of Technology Policies in Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Taking Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Working the Web . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Passion for Paperless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Technology Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

What Agents Want Making or Breaking Expectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Ease of Doing Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Download . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Real-Time Functionality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Quoting Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Moving Forward Vision for 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Agency Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Note: Percentages shown are based on the total number of responses to the particular question. Quotations are from survey participants and were provided during the survey.

Agency Technology Survey — Executive Summary 2006

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INTRODUCTION Demographics During the two months it was live, the survey achieved a 53% completion rate. Input came from every part of the independent agency system, and from all levels of staff within individual agencies and brokerages. Most respondents who identified their business type chose “independent agent,” followed by broker and MGA.

What type of organization do you primarily work for? Independent agent Independent agent Broker Managing general agency Wholesaler Captive agent Other (specify)

86.5% 8.9% 1.6% 1.0% 1.0% 1.7%

Other Captive agent MGA Wholesaler Broker

The survey achieved broad representation within each office. At the top level, roughly four in 10 individuals identified themselves as agency principal or member of agency senior management.

Are you the principal or a member of the senior management of the agency?

Yes No

41% 59%

Yes

No

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© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06


Agencies of all sizes were well represented in the survey. A quarter of respondents indicated revenues of between $2.5 million and $10 million.

What are your agency’s total yearly revenues for all locations combined? Under $150,000

Under $150,000 $150,000 - $499,000 $500,000 - $1,249,000 $1,250,000 - $2,499,000 $2,500,000 - $9,999,000 $10,000,000 or more

6.3% 19.2% 19.5% 17.5% 24.4% 13.0%

$150,000 $499,000

$10,000,000 or more

$2,500,000 $9,999,000

$500,000 $1,249,000 $1,250,000 $2,499,000

A range of agency management systems also was represented. Standard AMS Services and Applied Systems management systems each accounted for slightly more than a third of all responses. Instar, Ebix, Strategic Information Systems, MI-Assistant and DORIS each garnered between one and five percent representation. Interestingly, 2.5% of respondents say they built their own system, and 4% claim to use none. Forty-three percent of those who chose “none” go directly to carrier Web sites. Thirty percent of them don’t believe the agency needs a system, while 12% plan to buy one.

[My agency bypasses the agency management system] “because companies refuse to adopt real time. They are afraid to provide the critical tool to their marketers, for fear of losing business and control. It is a historic barrier to insurance marketing efficiency that they desire to maintain.”

Agency Technology Survey — Executive Summary 2006

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Impact of Technology on the Agency The adoption of new technologies has enabled our agency to become a more effective sales organization. Strongly disagree

Strongly agree

44.1%

Somewhat agree

44.9%

Somewhat disagree

9.4%

Strongly disagree

1.6%

Strongly agree

Somewhat disagree

Somewhat agree

Agents and brokers and their staff were candid in their description of what technology has and has not done in their agencies. Nearly 90% of respondents agree—strongly or somewhat—that the adoption of new technologies has enabled the agency to become a more effective sales organization. Eighty-eight percent of respondents believe new technology procedures have had a significant or moderate impact on pro-active client servicing in the agency. Eighty-four percent say the new technology procedures have had a similar impact on reducing staff processing time.

What level of impact have new technology procedures had on reducing your staff’s processing time? Significant impact

Significant impact Moderate impact Very little impact No impact

43.6% 40.6% 12.5%

No impact

3.4% Very little impact Moderate impact

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© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06


“Following the hurricane, which devastated our area, our technology allowed us to stay in business. Our office and every piece of paper were destroyed, and without our technology, we would not have been able to serve our customer’s needs.” At the end of the day, respondents believe technology has had an overall positive impact on their business. When asked, “What level of impact have new technology procedures had on the overall value of your agency?,” 65% of those who had an opinion said the value of the agency has increased. Only 1% of respondents perceived a drop in value.

What level of impact have new technology procedures had on the overall value of your agency? Increased Decreased

Agency value has increased No change in agency value Agency value has decreased

64.9% 34.1% 1.0%

No change

“We grew 35% last year, but we did not have to add any employees.”

Agency Technology Survey — Executive Summary 2006

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STATE OF TECHNOLOGY Policies in Place While agencies and brokerages have, for the most part, responded to technology-related developments and their impact, opportunities exist for user groups, vendors, associations and others to drive further action. For instance, the issue of automation security has taken center stage in many businesses. Eighty-five percent of respondents say they've adopted a specific automation security policy within their agency. Still, this leaves 15% without such a policy. A higher percentage of respondents say they've implemented a policy to protect client information. Ninety-four percent agree—more than 60% strongly so—with the statement: “Our agency has adopted a specific policy to protect the privacy of clients’ information.”

Our agency has adopted a specific policy to protect the privacy of clients’ information. Strongly agree Somewhat agree Somewhat disagree Strongly disagree

60.5% 33.4% 5.3% 0.8%

Strongly agree Strongly disagree Somewhat disagree

Somewhat agree

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© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06


When it comes to traditional disaster planning, though, agencies have been less diligent. Seven out of 10 respondents say their agency has adopted a specific disaster-preparedness plan, despite continual calls from associations, carriers, vendors and user groups. This leaves nearly 30% who say they are operating without a formal plan.

Our agency has adopted a specific disaster-preparedness plan. Strongly agree Strongly agree

26.5%

Somewhat agree

44.3%

Somewhat disagree

20.4%

Strongly disagree

Strongly disagree

8.8%

Somewhat disagree Somewhat agree

Agency Technology Survey — Executive Summary 2006

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Taking Responsibility For the most part, agents and brokers who took part in the survey say they consider technology to be a strategic initiative. Fifty-five percent of principals and senior management agree strongly that their agency has in place an active strategy to improve their business by implementing technology improvements as they are introduced. An additional 40% say, with less conviction, that they have such a strategy.

My agency has an active strategy to continuously improve the business by implementing technology improvements as they are introduced. Strongly disagree

Strongly agree Somewhat agree Somewhat disagree Strongly disagree

55.4% 39.9%

Strongly agree

Somewhat disagree

3.7% 1.0%

Somewhat agree

Asked if staff must implement technology improvements when the agency adopts them, a higher percentage—three-fourths—of agencies strongly agree. Another 22% somewhat agree with the premise.

Our agency staff is required to implement technology improvements when they are adopted by our agency. Strongly disagree

Strongly agree Somewhat agree Somewhat disagree Strongly disagree

75.7% 22.2% 1.7%

Strongly agree

Somewhat disagree

0.3%

Somewhat agree

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© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06


When it comes to training, responses are less fervent. More than 40% strongly agree with the following statement: “Our agency provides systematic training of employees regarding the implementation of new workflows and technologies.” Another 47% somewhat agree with the same statement.

Our agency provides systematic training of employees regarding the implementation of new workflows and technologies. Strongly disagree

Strongly agree

41.9%

Somewhat agree Somewhat disagree Strongly disagree

47.3% 9.0% 1.7%

Strongly agree

Somewhat disagree

Somewhat agree

“It is extremely difficult to train people on 20 different carrier Web sites. Each company is doing things differently with upload, download, new business, Web sites—it is a technological mess.”

Agency Technology Survey — Executive Summary 2006

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Working the Web Given the amount of time agencies have had to develop and implement a Web presence, a surprisingly high number have not done so. Or if they did, they abandoned it. Just fewer than three-quarters of principals and senior management say their agency or brokerage has a Web site. And of those that do, it’s often left static for long periods of time—perhaps in perpetuity.

How often is your agency Web site updated? Continuously

Continuously

30.7%

Monthly

13.1%

Rarely Annually Never

35.1% 17.9% 3.2%

Never Monthly

Annually

Rarely

Despite the lack of Web presence and freshness, agents and brokers recognize that Web sites will continue to evolve from brochure sites to interactive client resources. They indicate belief that customers will want or expect expanded functionality and access to policy information over time. Web site features

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Now offered on Web site

Will want or expect

Change

Real-time interaction

47

608

1,193%

Billing information (what they owe)

84

937

1,015%

Claims inquiry/status

97

810

735%

Policy info (coverage and premiums)

123

861

600%

First notice of loss

220

801

264%

Policy service

218

790

262%

Changes to policy

232

807

248%

Certificates

254

851

235%

Reporting of claims

308

833

170%

Quotes

539

903

67%

Brochure

786

679

- 15%

Other

284

102

-64%

© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06


Passion for Paperless One area where agencies are focusing, and where staff is supportive, is in a move toward paperless. More than 75% of agencies claim to have a major strategy to go paperless and/or remain paperless. Comments received (where free-form answers were sought) indicate that staff members believe going paperless has driven considerable benefits to the agency in a number of ways—customer service, sales focus, time savings and increased productivity.

Our agency has a major strategy to go paperless and/or remain paperless. Strongly agree

Strongly agree Somewhat agree Somewhat disagree Strongly disagree

41.3% 34.7% 15.1% 8.9%

Strongly disagree

Somewhat disagree

Somewhat agree

“Paperless rocks. You can do twice the work with half the stress of paper stacking up on your desk....”

“We converted to an image-driven workflow about two years ago in personal lines. The result was an increase of revenue per CSR of about $75,000 each. In commercial, imaging was implemented six months ago; average increase in revenue per CSR to date is about $40,000.”

Agency Technology Survey — Executive Summary 2006

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Technology Challenges Two areas that cause anxiety among many agents and brokers are dealing with proprietary company systems or Web sites and redundant data entry. Roughly half of all respondents said that learning and using various company proprietary systems was the agency’s greatest challenge in supporting automation. Its close cousin, managing multiple user IDs and passwords, was second. Asked about top challenges for supporting interface, agents and brokers ranked different proprietary company interfaces number one, followed by duplicate entry and multiple IDs and passwords. Duplicate entry earned the dubious spot as number one “time waster” when it comes to automation—by a nearly four-to-one margin over its next closest competitor.

What is your agency‘s greatest challenge in supporting automation? Learning and using various company proprietary systems

48.9%

Multiple user IDs and passwords

20.2%

1.7% 3.5% 2.4%

48.9%

10.5%

Time and expense of keeping up with changing technologies and updating versions

12.8%

Time and expense of educating and training of staff

10.5%

Budgeting IT

2.4%

Finding quality technical resources (including outsourcing)

1.7%

Other

3.5%

12.8%

20.2%

What is your agency’s greatest challenge in supporting interface? 2.1% Different proprietary company interfaces

35.9%

Duplicate entry

28.2%

Multiple IDs and passwords

13.2%

Training agency staff

11.6%

Managing real-time

4.2%

Password reset

2.1%

Other (specify)

4.8%

4.8%

4.2% 11.6%

13.2%

28.2%

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© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06

35.9%


What is your major automation “time waster” in doing business today? 5.0% Duplicate data entry

3.4%

46.6%

46.6% 10.0%

Proprietary programs/software products

12.4%

Manual verification of upload and download transactions

11.5%

Carrier does not provide access to real-time data

11.1%

Multiple user IDs and passwords

10.0%

11.1%

Insurance scoring

5.0%

Other

3.4%

11.5% 12.4%

“Ease of doing business is no longer easy. With each carrier requiring use of its own rating system, it takes four times longer to rate risks than it used to. To be more efficient, the time element needs to be improved for comparative quoting.”

“Ease of use is critical and duplicate entry is killing us. The expenses are actually higher than when we had paper files only. Carriers have to find a way for agents to do this once and be done!”

Agency Technology Survey — Executive Summary 2006

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WHAT AGENTS WANT Making or Breaking Expectations Part of the survey looked at features agents would find useful in their agency management system, compared to what is currently available. For the most part, a gap seems to exist between what agents want and what management systems offer.

How important is it for your agency to have the ability to customize your client data in your agency management system? Extremely important

Not at all important

Extremely important Very important Important Not very important Not at all important

42.3% 30.8% 19.9% 6.2% 0.9%

Not very important

Important Very important

When asked, “How important is it for your agency to have the ability to customize your client data in the agency management system?,” 73% of respondents said it is extremely or very important. Only 53% said they currently have that capability in their system. When asked, “How important to you is it to have your agency management system provide you with a full client view of all the business you have with that client?,” 89% answered extremely or very important. Yet only 70% said their system offered that capability.

Do you currently have the capability to customize your client data in your agency management system? Yes

Yes No Don’t know

52.9% 26.9% 20.2%

Don’t know

No

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© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06


How important to you is it to have your agency management system provide you with a full client view of all the business you have with that client? Extremely Not at all important

Extremely important Very important Important Not very important Not at all important

61.7% 27.4% 9.3% 1.4% 0.1%

important

Not very important Important

Very important

The largest gap came when participants were asked, “How important to you is it to have your management system allow you to set ‘exceptions’ with regard to incoming data, finances, coverage gaps, employee performance, etc., and then flag those exceptions for you to focus on?” Fifty-four percent described it as extremely important or very important, while only 23.5% said their system currently offers that functionality.

Do you currently have the capability for a full client view of all the business you have with that client? Yes Don’t know

Yes No Don’t know

69.7% 23.0% 7.3%

No

Beyond this functionality, an opportunity exists for vendors and user groups to better educate users on what agency management systems offer. For instance, one in five respondents say they don’t know if their system allows them to customize client data. And more than a third— 37.5%—say they are not aware if their system provides the ability to set “exceptions.”

Agency Technology Survey — Executive Summary 2006

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One area where management systems seem to meet expectations is in their ability to track prospect information. Thirty-four percent of respondents said it is extremely important that systems do this, while 31% said it was very important. Seventy-two percent of respondents said their systems currently deliver this capability.

How important to you is it to have your agency management system provide you with the capability to track prospects? Extremely important

Extremely important Very important Important Not very important Not at all important

33.9% 31.4% 23.9% 9.8% 0.9%

Not at all important

Not very important

Important Very important

Do you currently have the capability to track prospects? Yes

Yes No Don’t know

72.2% 17.3%

Don’t know

10.6%

No

“Cost-effective solutions for automation based on agency desired workflows are desperately needed for agencies. We need to develop automation to be a tool, not a task.”

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© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06


Ease of Doing Business Technology advances within insurance and in other industries are showing agents and brokers and their staff that it is possible to make business processes more simple. Agency and brokerage professionals yearn for the ease of doing business these workflow and automation tools support. It's become an increasingly important factor in their decision to place business with a carrier.

Over the last two years, my agency’s ease of doing business with a carrier has become an increasingly important factor in my agency’s decision to place business with that carrier. Strongly disagree

Strongly agree Somewhat agree Somewhat disagree Strongly disagree

70.6% 27.3% 1.8% 0.4%

Strongly agree

Somewhat disagree

Somewhat agree

In answers to several market-centric questions, agents and staff identified ease of doing business as the number one driver in their decisions about where to place business. In personal lines, for instance, it was the most important criterion for 43% of those surveyed, followed by price (31%) and product (20%). For small commercial—accounts generating less than $15,000—ease of doing business was chosen by 45%; price and product got 33% and 16%, respectively. For larger commercial, ease of doing business dropped in ranking. The top three drivers for placing medium commercial were price (35%) ease (30%) and product (29%). In large commercial, product earned top honors (48%) followed by price at 28% and ease at 16%. For financial services, specialty and surety, ease of doing business earned first or second place, with responses ranging 34% - 71%.

Agency Technology Survey — Executive Summary 2006

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Thirty-six percent strongly agree—and 42% somewhat agree—that difficulty in securing multiple quotes has restricted the number of carriers from which they seek quotes. And more than three-fourths say they’d be more likely to choose a carrier, regardless of price, if the agency management system could pre-fill some of the fields on a carrier’s proprietary Web site.

Would your agency be more likely to choose a carrier— even if it is not perceived to be the lowest price—if your agency management system could pre-fill a percentage of the fields on that carrier’s proprietary Web site? Extremely likely

Extremely likely Very likely

13.7% 28.0%

Somewhat likely Not very likely Not at all likely

34.9% 19.6% 3.9%

Very likely

Not at all likely

Not very likely

Somewhat Likely

It’s clear, according to survey responses, that carriers who have not yet done so have opportunities to implement technology that increases agent and broker ease of doing business.

How many of your carriers do you feel have implemented technology (download, real-time, online rating, etc.) that has increased your ease of doing business? All

All Most Some None

7.5% 50.0% 37.5% 5.0%

None

Some

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© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06

Most


Download Since the 2002 AUGIE agency automation survey, carriers have increased the use of download for personal and commercial lines. In general, agents have expressed satisfaction with how personal download has functioned. Commercial lines download has faced more challenges, and AUGIE and other groups have worked to resolve some of the issues. In the 2006 AUGIE survey, respondents shared where download does or would deliver the greatest benefit. When asked about specific transactions, agents and brokers chose download of new business submissions, renewals and endorsements—in that order—as most beneficial.

Please select which of the following transactions is/would be the most beneficial to you to have downloaded? (Top five of nine answers are shown.) New-business submission

New-business submission Renewal Endorsement Cancellations Payments received

30.0% 21.7% 20.6% 9.1% 6.2%

Payments received

Cancellations

Endorsement

Renewal

Questions also addressed product lines. In personal lines, by far, agents and brokers chose automobile as the product where download offered the most benefit. BOP, commercial auto and package policies were the top vote-getters in commercial lines, each receiving the nod from one-fourth to one-third of respondents.

For personal lines, select which line of business is/would be the most beneficial to you to have downloaded? (Top three of 14 answers are shown.) Auto

Auto Homeowners Package

72.5% 11.2% 6.1%

Package

Homeowners

Agency Technology Survey — Executive Summary 2006

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For commercial lines, select which line of business is/would be the most beneficial to you to have downloaded? (Top five are shown.) BOP Commercial auto Package

32.3% 25.8% 24.1%

Excess & Surplus

3.5%

Specialty lines (EPLI, D&O, E&O, Fiduciary)

3.1%

Specialty lines

BOP

E&S

Package

Commercial auto

Almost 40% of accounting responses indicated direct-bill commission statements, beating the next two choices—company statement (account current) and direct-bill status—by roughly a two-to-one margin.

For accounting, select which transaction is/would be the most beneficial to you to have downloaded? Direct-bill Direct-bill commission statement Company statement (account current) Direct-bill status Commission percentage Commission amount Other

39.4%

Other

22.5% 18.8% 9.9%

Commission amount

5.6% 3.9%

statement

Commission percentage Direct-bill status

Company statement

“After implementing direct-bill commission statement download, we were able to eliminate two weeks’ worth of data entry each month for one person. Imagine how much better it would be if this technology were available with life/health carriers also!”

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© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06


Asked what claims transaction is or would be most beneficial for download, adjuster and office information garnered the most responses, followed by information on claims payments, open claims and closed claims.

For claims, select which transaction is/would be the most beneficial to you to have downloaded? Open Other

Claims adjuster and office information Payment Open Closed Loss runs Other

26.7% 20.5% 16.1% 12.0% 11.3% 6.8%

Contact information

4.8%

Reserve

1.9%

Closed

Reserve

Loss runs

Claims adjuster and office information

Payment Contact information

Claims download would serve more than just claims people. Agents also would be better informed by having access to up-to-date claim status many respondents believe they’re now missing.

The agent often is out of the loop as to claim status. Don’t know

Strongly agree Somewhat agree Somewhat disagree Strongly disagree Don’t know

Strongly agree

33.4% 44.8% 12.0% 4.5% 5.2%

Strongly disagree

Somewhat disagree

Somewhat agree

“Commission download has been a lifesaver!”

Agency Technology Survey — Executive Summary 2006

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Real-Time Functionality The ability to conduct real-time transactions has increased dramatically since the 2002 survey. Agency management system vendors and others now interact with carriers to drive a range of inquiry and other capabilities for agency and brokerage professionals. The lion's share of these involve inquiries. Of 6,900 individuals who were asked which real-time transactions they use, only 825 said “none,” and nearly 4,000 answered “billing inquiry” and/or “policy inquiry.”

Which real-time transactions does your agency use? Billing inquiry 3,989 Policy inquiry 3,952 Claims inquiry 3,480 Endorsement processing 2,870 Rating 2,787 Loss runs 2,279 First notice of loss 1,351 Instant notification through agency management system 538 None 825

4000 3500 3000 2500 2000 1500 1000 500 0

The call to develop real-time inquiry functionality came out of the 2002 survey. The survey actually helped drive a shift from where many carriers were headed in their development work, and resulted in automation changes agents actually have adopted and incorporated into their workflows. As real-time inquiry capability has matured, and more and more agents and brokers say they are using it, the push should now be toward real-time new business processing, endorsement processing and quoting, the survey says.

What should be the carriers’ top priority related to real-time automation? New business processing

New business processing Endorsement processing Quoting Billing status Renewal processing Policy inquiry Others None

27.8% 25.6% 15.7% 7.0% 5.4% 5.3% 11.2% 2.0%

Endorsement processing

None All others

Policy inquiry Renewal processing Billing status

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© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06

Quoting


To gauge the value of real-time, the survey asked what impact real-time functionality would have on workflows. Agents and brokers overwhelmingly believe real-time will help. For instance, 89% agreed—64% strongly so—that real-time endorsement issuance or change request will have a positive impact.

Real-time endorsement issuance or change request will help in my workflow. Strongly agree Somewhat agree Somewhat disagree Strongly disagree Don’t know

64.4% 25.8% 1.9% 1.4% 6.5%

Don’t know

Strongly agree

Strongly disagree Somewhat disagree Somewhat agree

Survey participants were given a chance to choose from suggested real-time quote and issue scenarios. The top preference, selected by one-third of respondents, was “Using your agency management system, request a real-time quote and receive an immediate premium quote response. Request policy upload overnight for issuance. Policy is issued the next day and downloaded by the company to your agency management system.” Next on the list was “Using your agency management system, request a real-time quote and receive a premium quote response. Request issuance real-time and policy information is immediately returned and printed at the agent’s office. Policy record is downloaded the next day.” That option was preferred by 22% of agents and brokers. Seventeen percent chose “Using your agency management system, request a real-time quote that automatically pre-fills company specific screens, which you complete on the company system to secure an immediate premium quote. The policy is issued and downloaded the next day.” More than 10% opted for “Using your third-party comparative rating system, request a realtime quote that automatically pre-fills company specific screens which you complete on the company system to secure an immediate premium quote. Policy is issued and downloaded the next day.” Seventeen percent said they did not like any of the choices.

Agency Technology Survey — Executive Summary 2006

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Quoting Business Several survey questions addressed quoting—a hot topic for many agents, brokers, MGAs and wholesalers. Respondents were queried on predominant methods of securing quotes for various lines, then asked how they'd prefer to obtain quotes. Gaps were identified. For instance, in personal lines, carrier Web sites and desktop comparative rating were the top two choices, selected by 61% and 21%, respectively. In commercial lines, paper applications (faxed, e-mailed or mailed) was selected by 49%; carrier Web sites was chosen by 41%. For specialty lines, faxed, e-mailed or mailed applications earned the top spot (70%), with carrier Web sites taking second (18%). Responses for financial services indicate carrier Web sites as number one (47%), with faxed, e-mailed or mailed applications being the top current method for 33% of respondents. Nowhere did “real-time quote through the agency management system” earn one of the top two predominant methods. But that’s the number one answer when agency and brokerage professionals were asked what they want. Thirty-eight percent say they would prefer that method, followed by carrier Web sites, with 28%. Other methods each garnered around 10% or 11% of the nods.

What is your preferred method of securing a quote? Real-time quote through the management system Carrier Web site

Other

Real-time quote

38.2% Applications 28.5% faxed, e-mailed

Comparative rating - Web site 11.1% Comparative rating - desktop 10.8% Applications faxed, e-mailed, mailed 10.4% Other 1.0%

mailed

Comparative rating— desktop Comparative rating— Web site

Carrier Web site

“Ideally we would love to be able to log onto our agency management system, enter the data and then be able to rate through it, rather than having to go into 15 different company Web sites a day.”

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© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06


Survey participants say, overwhelmingly, that real-time quoting will improve their operations and improve how they serve customers. Nearly nine out of 10 respondents believe that to be true—58% strongly so. Only 5% disagree.

Real-time quoting will help in my workflow. Strongly agree

58.4%

Somewhat agree

28.6%

Somewhat disagree

2.7%

Strongly disagree Don’t know

2.0% 8.2%

Don’t know

Strongly agree

Strongly disagree Somewhat disagree Somewhat agree

Besides responding to agent and broker needs, carriers may be able to gain business—or at least get an opportunity to see more submissions—as they begin to offer real-time quoting through management systems. Agents will be able to reuse data, and consider more carriers—something indicated in the 4,300 or so responses to a survey question on the difficulty of securing multiple quotes. More than 70% say the difficulty in securing multiple quotes keeps some carriers out of the game.

Difficulties of securing multiple quotes have restricted the number of carriers from which I seek quotes. Strongly agree Somewhat agree Somewhat disagree Strongly disagree Don’t know

Don’t know

32.9% 39.3% 13.2% 7.1% 7.5%

Strongly agree

Strongly disagree Somewhat disagree

Agency Technology Survey — Executive Summary 2006

Somewhat agree

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MOVING FORWARD Vision for 2011 Principals and other members of senior management have contemplated what the agent, broker, MGA and wholesaler world will look like in the future. And the 2006 AUGIE survey captured some of their thoughts—on client data and service issues, and on staff roles and responsibilities. Survey responses show that 77% of principals and senior managers believe the independent agency or brokerage of 2011 will need to offer round-the-clock access for clients who want to do business after hours. Thirty-five percent feel strongly this will be the case. More than nine in 10 respondents said that, in five years, the agency will maintain more customer-specific data that will let it respond to individual client preferences.

In my agency in five years, we will maintain more customer-specific data in order to respond to the preferences of specific customers. Strongly agree

38.9%

Somewhat agree Somewhat disagree

54.0% 6.3%

Strongly disagree

Strongly disagree

Strongly agree

Somewhat disagree

0.9% Somewhat agree

“Automation and a ‘paperless’ office speeds up turnaround time and allows you to focus more on sales, rounding accounts and gaps in coverage that could be sold.”

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© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06


Similarly, principals and senior managers see changes in staff responsibility. They expect an evolution from processing to marketing and advising—a move that can be supported by effective automation deployment. Specifically, nearly three-fourths of respondents believe the agency of 2011 will devote much less staff time to processing. Larger numbers see servicing staff taking a greater role in marketing functions, such as account rounding (91%) and in the role of professional advisor (80%).

In my agency in five years, there will be a major reduction in the amount of staff time spent on processing. Strongly agree

Strongly agree Somewhat agree Somewhat disagree Strongly disagree

28.0% 45.3% 17.3% 9.3%

Somewhat agree

Strongly disagree

Somewhat disagree

In my agency in five years, servicing staff will be more marketing oriented, seeking to round out accounts. Strongly disagree

Strongly agree Somewhat agree Somewhat disagree Strongly disagree

43.2% 47.9% 7.0% 1.8%

Strongly agree

Somewhat disagree

Somewhat agree

Agency Technology Survey — Executive Summary 2006

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Agency Investments Agencies clearly recognize that automation requires commitment of time and money on their part. The survey offered insight into investments principals said they would make to drive consistent workflows through automation. Topping the list was staff training and education, software upgrades, user-group participation and hardware upgrades, in that order. By and large, principals are planning for these expenses, as shown by answers to questions about the agency’s annual budget.

What automation (agency management system and others) investments would you be willing to make over the next 12 months to maximize consistent workflows? 2000

1500

1000

Educate and train staff

1,584

Upgrade software

1,003

Participate in user groups

887

Upgrade hardware

882

Improve communication speed 832 500

0

Enhance Web site Other (specify)

811 60

Which of these are included in your agency’s annual budget? 2000

1500

1000

Educate and train staff

1,546

Upgrade hardware

1,351

Upgrade software

1,255

Participate in user groups

811

Improve communication speed 639 500

0

30

Enhance Web site Other (specify)

© 2006 ACORD Corporation – All Rights Reserved AUGIE – ACORD User Group Information Exchange Updated 5/31/06

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AUGIE Technology Survey Executive Summary