By TODD L. YOUNG, the president, CEO and co-founder of ProspX in Austin, Texas, a provider of collaborative software platforms for the insurance industry
Because workers' compensation insurance coverage is a mandated purchase, with rates much more tightly controlled by insurance regulators than in other lines, it's tempting for businesses to look at different insurance proposals as apples-to-apples comparisons.
However, savvy insurance buyers, commercial underwriters, and experienced insurance brokers all know that there is a world of difference that lies below surface similarities. Workers' comp, just like other critical lines of coverage, demands critical expertise to navigate the complexity of the risk management process.
Effective communication and collaboration between brokers and carriers is essential in order to uncover those differences, navigate the complex landscape of commercial insurance, and secure the best program at the most competitive price for the buyer.
Buyers need to ensure that their insurance partners are making smart use of search and networking tools that allow easy and effective collaboration and provide access to a wealth of real-time knowledge and industry-specific insight.
Unfortunately, the workers' comp proposal process has been anything but real time. Brokers lacked the tools that would provide instant access to market information, and communication has been asynchronous as brokers and underwriters exchanged messages through traditional means. This has led to three key breakdowns:
Incomplete or out of date information.
The insurance marketplace is continually evolving, with carriers' appetites, coverages, and pricing in a constant state of flux. Without effective tools to automate the research process, the broker simply does not have enough time to collect and compile information from all available sources.
Ineffective use of expert resources. Buyers select a broker not just for his or her own expertise, but to gain access to the larger resources of the agency itself. However, without effective communication, a broker ends up operating as a "lone ranger."
Missed opportunity. Buyers expect their broker or agent to be more than just an order-taker. They want them to be a trusted advisor--an extension of their staff who can communicate their risk management needs and translate those into an insurance solution. Without effective collaboration among all parties to the proposal process, finding the right market is a hit-or-miss proposition.
SEARCH AND COLLABORATION
Today, brokers and insurers have greater access to online search, collaboration and social networking technologies, and need to use them to establish teamwork that will lead to better business outcomes.
Modern, Web-based systems give brokers real-time access to information about carrier expertise, the types of risks they insure, and key contacts, making it easier to collaborate and find a market, product, and price that is the best fit for the buyer.
Brokers who use an effective search and sales collaboration platform not only avoid the breakdowns mentioned, but deliver to their clients several key benefits.
They keep up to date with the market. In the complex commercial insurance marketplace, knowing what insurance company is the best match is essential. However, the traditional method of obtaining information on markets is inconsistent and ineffective. Static information in brochures and manuals becomes out of date, and company websites don't reflect the entire range of underwriters' changing appetites.
Web-based networking platforms make it easier for brokers to identify underwriters at companies that best match an opportunity, and to do so early in the sales process. Brokers and underwriters can better collaborate on new and renewal business opportunities. Carriers can also use the platform to push the most current and relevant information directly to brokers.
They are able to gain access to relevant information quickly. Google has revolutionized the way we search for content in our daily lives. Yet in the commercial insurance world, brokers still manually wade through carrier websites, whitepapers, surveys, benchmark data, and other sources in an attempt to glean valuable nuggets of information. Brokers need to use technology that incorporates an insurance-specific knowledgebase and enables targeted keyword searches. This on-demand access to information is essential to build a good risk management program and thoroughly understand the carrier landscape.
They can create a customized solution for a client. With a manually based proposal process, brokers don't have the time to digest critical resources and material to put together a program that's as good as it could have been. Missed phone calls, delayed e-mail responses, and other communication breakdowns also make it difficult for brokers and carriers to customize programs within typically short proposal cycle times.
With real-time collaboration, brokers can be a true "street fighter" for the buyer and work to stretch a policy around the unique aspects and risks of the business. Also, by enabling brokers to connect with markets early in the proposal cycle, underwriters have more time to gain confidence in their risk selection and put their best product and price on the table.
They can streamline the proposal process. On-demand collaboration platforms improve productivity and streamline communications between brokers and carriers, providing quick responses and turnaround for the buyer. Making the proposal process more efficient is particularly important in today's economy, where agencies have trimmed staff and are trying to find ways to do more with less. Having technology to make workflows more efficient through single entry of data and elimination of manual handoffs and processes allows leaned-down agencies to still get the job done for buyers.
By leveraging automation, brokers can also establish strong relationships with more carrier partners for the benefit of the buyer. Underwriters are also more motivated to do business with agents who provide detailed risk information and make it easy to do business with them.
They can combine brainpower. Brokers often promise access to a team of expert resources, but they need effective collaboration in order to deliver on that claim. By using Web-based networking systems, brokers can connect with their intra-agency colleagues and with insurance carrier staff. This provides the full resources of the firm to a client and keeps the agency itself on the path of continuous improvement by enabling brokers to share and build knowledge.
They can lower insurance costs. Brokers can use collaboration and networking technology to strengthen partnerships and trust and to build expertise that will enhance risk management and loss control programs?ultimately lowering loss costs, experience modifications, and workers' compensation insurance premiums for the buyer.
It can be difficult for buyers to assess how effective the teamwork is between broker and carrier in the workers' compensation buy/sell process. Much of the process goes on unseen to the buyer, precisely because the buyer has entrusted the broker to handle the complexities of the transaction.
Therefore, buyers need to ask their brokers three critical questions: What search tools are you using to gain access to relevant information in today's data-rich technology environment? How are you ensuring that the market you propose best meets our needs and can create a program to match? What collaboration solutions are you using to tap into the collective brainpower and experience of your colleagues within your agency and among your carriers?
In today's competitive and diverse commercial insurance environment, there is no reason for insurance buyers to settle for a "one size fits all" program. And with the Web-based search, collaboration, and networking tools available today, there is no reason for brokers and carriers to accept the manual, asynchronous, and inefficient communication methods that have traditionally defined the workers' compensation proposal process.
Demanding answers to these questions and ensuring that the broker and insurance provider are effectively working together not only brings buyers the best risk management program at the most competitive price, but also builds the strongest long-term partnerships that protect everyone's bottom line.
August 1, 2010
Copyright 2010© LRP Publications