By MEIRA PRIMES, vice president of FirstBest Systems, a Bedford, Mass.-based
provider of insurance software solutions
Carriers know that their independent agents play a huge role in company success. When agents and carriers work well together, agents can help to grow carriers' business--and theirs--by delivering the right business. The problem is, it's not always easy to work together.
One of the bigger roadblocks to collaboration and responsiveness is the lack of effective support systems. Web 2.0 technologies, like those from Facebook and Google, have set the bar for instant communications. We're spoiled and want the same ease at work. Yes, social networking has yet to see its potential in the insurance industry. Wouldn't it be great to be able to leverage some of these capabilities in the day-to-day business of insurance?
They would help to eliminate some of today's artificial technology barriers between insurance companies, agents, brokers and insureds, and allow the industry to get back to more personal, real-time business relationships.
Many insurers have attempted to do so, rethinking and transforming their front-office operations to empower agents, relieve underwriters, reduce agent and carrier data entry, and help themselves to easily enter new markets and boost profits. A reinvented front office helps carriers and the channel drive more revenue by breaking down communication barriers and improving underwriting profitability through better information access, supported with streamlined and automated processes.
To grasp this front-office revolution, carriers must first grasp its evolution.
WHERE FRONT OFFICES FALL SHORT
The front office is truly distinct from the back office, by design and function, but both are core to insurers' operations. The back office is a dizzying mix of business-enabling systems for policy administration, rating, claims, billing, document management and business intelligence. Back-office systems support operational processes but do not directly drive revenue.
Encompassing many outward-facing relationships, the front office and its sales, marketing and underwriting functions are critical to driving revenue and profitability for the carrier. Unlike the back office, a successful front office actually powers the growing revenue stream and needed underwriting profits that are critical to carriers' financial health.
But many front-office operations fall short, which can drive down revenue and underwriting profitability. A 2010 FirstBest agent survey showed that 73 percent of respondents said that real-time feedback and quoting were very important to them, and 46 percent reported spending several hours daily on carrier sites and portals.
In the typical front office, the sales, marketing and underwriting functions rely heavily on manual processing and disjointed systems. These inefficiencies lead to a siloed view of agents and customers, as well as often redundant or conflicting communication, fewer cross-sell opportunities and a lacking agent experience.
Many carriers have attempted to serve agents by asking their back-end systems to do the impossible. They have "webified" interfaces or extended them to the front office in ways that were never intended. To the agent, these processes look like a black hole from which responses come slowly, if at all. Agents are left hungry for intuitive, smart and responsive interaction.
REINVENTING THE FRONT OFFICE
At other insurers, though, a revolution is afoot with the front office. Carriers are deploying modern, easy-to-expand modular front-office systems. These new applications plug into the back office, maintain a single view of the customer and provide a seamless user experience.
Unlike legacy systems, new front-office systems are built on modern architectures and are designed to be deployed in a matter of months rather than years. Carriers choose the capabilities that best meet their needs, such as:
-- Collaborative underwriting that lets agents and underwriters team up in a shared workspace, aggregating all the information needed to quickly make disciplined, profitable underwriting decisions. Such systems typically include workflow, submission and supporting documentation, third-party data, predictive modeling and dashboards.
-- Agency upload to integrate and translate data between carrier systems and agency management systems, generating ACORD XML data accessible by any carrier system, including policy systems, without rekeying.
-- Agent portal to facilitate new business and renewals and provide agent-friendly, rich functionality for better carrier communication, with dynamic supplemental data, shared documents and email.
-- Enterprise portal to pull together all agent services into a single, easy-to-use configurable interface
-- Direct portal that enables customer self-service for first notice of loss and claims.
-- Sales force automation to manage and track contact and opportunity details for carrier marketing and sales functions.
-- Distribution management for all aspects of the producer management lifecycle: recruitment, registration, licensing and contracting, training, commissions, monitoring and compliance.
THE ROI OF TRANSFORMATION
A modernized and efficient front office helps agents do their jobs better. It gives them complete visibility and greater involvement in carrier processes, even letting them know carriers' risk appetites before submitting. They get faster decisions from carriers and benefit from instant access to all the information they need and new levels of efficiency and automation. These advancements help agents provide improved policyholder service, which gives them an edge in winning and retaining more business--and keeps them coming back to given carriers.
While insurance companies benefit from increased revenue, modern front-office systems also help them to win the right business by enforcing underwriting discipline and ensuring that underwriters have all of the information they need at their fingertips. What's more, the new front office's knowledge management and automation capabilities enable carriers to increase their business without corresponding cost increases.
For example, ICW Group Insurance Cos., a multiline superregional insurer, wanted to significantly increase its book of business and improve ease of doing business for agents. Understanding that all roads to growth start with service, they reinvented their front-office operation with modern flexible systems that quickly increased underwriting discipline and market scalability and added agent collaboration.
Post transformation, ICW Group saw a 93 percent increase in submissions, 80 percent more quotes, 41 percent more bound policies and a 47 percent improvement in policy processing time--all without increasing staff. An impressive 85 percent of their agents use their new agent portal.
These are the metrics of front-office transformation. It's all about profitable revenue growth. In the reinvented front office, carriers and agents win more of the business they want to win.
April 1, 2011
Copyright 2011© LRP Publications