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It’s a widely held notion that technology in the insurance brokerage industry is behind the times.

Our industry has surprisingly few options for automating our agencies.

When you focus your technology on your customers, you can change entire models of doing business.


Pointing in the Wrong Direction

Here’s what’s wrong with today’s agency technology. Banking changed while we were idle.

By  Christopher Gagnon

[Page 2 of 5]

In the end, Sneed bought the software.

Through the 1980s, as computing capabilities matured, agency systems became more complex. What started as a few lines of free-form policy information became entire databases. Acord developed standard forms that could be used to design better agency systems.

“I designed Sagitta to take advantage of the standardization that was happening in the industry,” says Frank Sentner, the software’s original architect. “Sagitta was built to capture data to conform to the AL3 standard, which allowed for the mapping and transmission of data.”

Technology Shifts

While the systems became more complex, their focus was mostly unchanged: They were built to make the CSR more efficient. This digital disruption paved the way for further consolidation of firms serving hundreds of thousands of customers while retaining the ability to generate profit.

The 1990s changed everything once again. Terminals connected to minicomputers gave way to PCs on desktops talking with servers in the back room. Companies started connecting their PCs into local area networks, then wide area networks, then the Internet. The widespread adoption of the Internet created a world of interconnectivity between companies that converged data, communication and collaboration.

This fundamental shift in technology forced the agency system vendors to keep pace. Agency system interfaces transitioned from terminals to DOS to Windows with some eventually adopting browser-based models.

Despite this fundamental shift in underlying technology, agency systems didn’t change much. While some system vendors created a rudimentary customer portal interface, adoption was lackluster at best. Why? The core model of the systems remained firmly focused on the internal needs of the agency. Connecting your customers to your internally focused system doesn’t usually provide greater communication, better ease of use or higher levels of service than calling your servicing team.

Recently, mobile devices and smartphones have become ubiquitous. Social networks have turned our fear of privacy invasion into a desire to share everything. Agency system vendors are currently working to integrate these new technologies into their systems. But as history has shown, without a strategic shift in their core design these technologies will never be more than an add-on.

As agency-management systems matured and gained widespread adoption, the market gravitated toward two primary system providers, Applied Systems and AMS (now Vertafore). The systems added features and functionality while adjusting to a constant shift in underlying architecture. They added attachment and document management functionality. With the rise of the Internet, agency systems began to integrate email and Web connectivity.

Along the way, brokers have relied on the agency system vendors to add features and functionality to our industry. In ceding the definition of agency automation to the technology vendors, we have guaranteed the technology available for us to buy is focused on their customers, namely us. This means our technology is focused on our agencies when it really needs to be focused on our clients.

 

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