By TODD L. YOUNG, president, CEO and co-founder of ProspX, a provider of enterprise search, networking and collaboration software platforms
The availability of information today and the velocity of business have increased beyond the capacity and techniques of the traditional insurance broker. Modern and industry-specific social networking and collaboration tools bridge the gap, but your broker may not be using them.
During the past decade, risk managers have learned to adapt to an accelerated pace of business, powered by rapidly evolving information technology and instantaneous global communications. These executives have embraced the responsibility of gaining timely access to quality information, and they require their insurance brokers to do the same.
The commercial insurance market mirrors the complexity and volatility of the business environment in general, but how do risk managers make sure that their brokers use the most up-to-date tools and techniques needed to secure the best coverage?
Corporate risk buyers depend on their agent or broker to understand all the factors that determine the best coverage for a given business model and goal. Traditionally, risk managers have gauged their broker's effectiveness on their individual industry experience, the strength of their team and past performance. These qualities remain important, but in order to operate in today's commercial environment, brokers need to use technology as a force-multiplier to reach the degree of productivity that matches the volume and pace of relevant information available in the market today.
Risk managers may not be aware of the inefficiencies inherent to their broker's processes, but they are vulnerable to them all the same. This is very much a case of "what you don't know can hurt you."
To gauge how well a broker performs, it's helpful to first review what he or she needs to accomplish:
-- Navigating the complex and constantly changing commercial insurance market for a client begins with the broker's expert understanding of the characteristics of the risk to be insured.
-- The value of a broker is measured on individual expertise as well as the bench strength of the firm and the broker's skill in collaborating with associates who may have relevant knowledge, experience or relationships.
-- Brokers must also be capable of efficient collaboration with carriers, and be able to conduct research on carrier risk appetite, coverage, capacity and claims history within a limited timeframe.
-- Finally, the broker must be adept at discovering and transmitting potentially relevant information available from third party sources, including regulatory or industry association reports, general news, or any other source that may have bearing on the nature of risk and price.
The description of a broker's job has essentially remained unchanged over time, and many brokers have continued to work the old-fashioned way, with telephone, email and paper-based research. But without effective tools to automate the research and communication processes, a broker simply does not have enough time to collect and compile from the range of available information sources that could materially affect the quality and price of coverage.
While most agents and brokers have, to varying levels of degree, incorporated tools such as LinkedIn, Facebook, Google and Twitter into both their professional and personal lives, these tools are by design generic in their application and offer limited value for true business collaboration.
Today, there are a new breed of emerging insurance-specific collaborative networking and social media technologies, allowing brokers access to real-time intellectual capital, carriers, and knowledgeable colleagues--all valuable resources that can dramatically shorten the time needed to acquire relevant information and extend a broker's reach to embrace more expert advice and wider sources of information. The result is a correspondingly dramatic improvement in productivity.
To illustrate, using insurance-specific collaborative networking technology currently available, a broker receiving an inquiry from a current or potential customer can begin research with a simple keyword search, similar to a Google search, related to the business opportunity. Through the search, the broker can immediately identify and reach out to relevant parties both internally within the agency and externally, with carriers and partners.
Collaborative business platforms enable a broker to establish a real-time connection with underwriters who can provide details regarding carrier risk appetite, information about recent filings relevant to the coverage sought, and other valuable information.
The broker can similarly interface with agency colleagues who may have done business with a given carrier or have expertise on the coverage area. Other colleagues may have relevant expertise on the industry in question and have access to further materials that illuminate the nature of the risk, such as articles on industry trends or the impact of recent regulatory changes. At any stage of the process, the broker can present his findings to the client and even continue the collaborative process while at the client's office.
A broker can request specific searches into their firm's and their carrier's digitized resources, seeking content such as benchmark data, competitive analysis, whitepapers and sales presentations.
Through the use of search technology, agencies can digitally "tag" all data related to a given business opportunity, including email, collaborative chats, attachments and index them to both a current file and by keywords for archival in a virtual sales library that enables easy reference and retrieval for future sales opportunities. Agencies can track collaborative correspondence according to their unique staff and processes, they can enable brokers to rate content and they can build relevant content as a driver of continuous improvement in the way they handle cases.
Through direct access to relevant information and resources, brokers can make significant and rapid progress on their sales opportunities. However, their productivity is measured in quality as well as velocity. Brokers with access to modern tools not only have access to more information in a shorter time, but also better access to time-sensitive information.
Unquestionably, insurance industry specific social networking and collaboration platforms speed a broker's ability to gather information about new coverage or programs offered by carriers, as well as information about claim trends, specific case studies or litigation on key policy provisions. While this information is vital, it has a long shelf life and is relatively easy to access. However, there are several categories of information that are highly changeable, not so readily available, and likely to be missed by brokers who depend on static information on carrier websites or underwriting brochures that may only be updated on a quarterly schedule, if not less frequently. Rate changes are often made within a shorter timeframe, and information about capacity in the reinsurance market is constantly shifting. Brokers also need to be aware of general political, economic and business news that may have an influence on pricing.
A broker armed with both ample information of the more long lasting kind as well as the latest information that can bear on programs and pricing, has far greater capability to spare his client potentially significant losses caused by inadequate insurance coverage.
In this regard, modern broker tools represent a solution to a perennial problem: Brokers have historically struggled to bring together all the parties and information necessary to secure optimal insurance coverage. Traditional methods of research and collaboration simply lacked the ability to unite those resources within a reasonable timeframe or reach the depth of information often required. However experienced a given broker, his or her ability to secure optimal coverage has remained a hit-or-miss proposition to a certain extent.
With modern social networking and collaboration technologies, brokers can access a greater breadth of sources, collaborate with more parties in vastly less time, and monitor time-sensitive information that can impact pricing and choice of coverage. The net result is more precise coverage selection that leaves less to chance. And, risk managers who want to get the most from their insurance coverage should insist that their brokers employ the full range of available tools, technologies, and resources.
May 1, 2011
Copyright 2011© LRP Publications