How the Best Agencies Do It: Key Element 5

The following is from by Cheryl Koch's presentation at IBA West's Blue Ribbon Confernece earlier this month. Cheryl is President and CEO of Agency Management Resource Group and serves as Managing Director of IBA West Education/Insurance Skills Center. This is the fifth in a series featuring the eight key elements.

Element No. 5—Harness the Power of Technology

Extraordinary agencies have taken control of their technology needs and eliminated virtually all paper, even that coming in the door.  This offers huge strategic advantages for the agency, not the least of which is the ability to hire great people who do not live within a 30 minute drive of the office.  Think about it—your best CSR comes into your office and announces she has to leave the agency because her husband has been transferred to another state.  You are momentarily taken aback, until you realize it’s no problem!  If you are using your agency management and document management systems properly, that CSR can work from anywhere.  You save hiring and training costs, your customers continue to receive the same excellent service, and there’s almost no disruption for your other staff members.  None of that is possible if we remain entrenched in a paper world.

Agencies that are maximizing their investment in technology also have flatter organizations.  The hierarchical structure so popular in some agencies, where CSRs have assistants and the assistants have assistants creates inefficiencies as items are parsed out and passed among various associates.  The handoffs are unnecessary in an automated environment, which presumes that the person who initiates a transaction completes it, and may also lead to increased E&O exposures.  Laying automation on top of an inefficient process does not create the hoped-for productivity gains.

Agents must stop waiting for insurance companies to meet their automation needs.  The carriers have a vested interest in their proprietary systems and use of these systems by agencies often makes the work of the agency staff more difficult.  Where in a paper world there was only one way to process a simple transaction, such as an endorsement, there now may be three or more ways to complete that same task, depending on the carrier.  In some cases a change request can be faxed or emailed from the agency’s management system, in others it must first be entered in the carrier system and then re-entered in the agency’s MIS.  Some carriers require that a request be emailed to them from their system (also requiring entry in the agency’s system).  This means CSRs are actually doing more work than they were before we automated the task.  Commercial lines download creates another set of issues since many carriers overwrite the information in the agency’s database, or otherwise corrupt the agency’s electronic file by sending information in an inappropriate format, such as all capital letters.  Until all these issues have been resolved, agents would be better off telling the carrier “thanks, but no thanks” to download and many well-run agencies have done just that.

 (Look for Element 6 in the next edition of the Insider.)