At the recent AMS Users Group National Conference, the group awarded its 2007 Quantum Award to Selective Insurance of Branchville, New Jersey. According to AMSUG, "This prestigious honor is given to companies who create technology that enables agents to make a quantum leap in productivity and profitability." That's great, but what about the hundreds of insurance companies who don't make tech easier for agents? You know, the real silent majority.
One of the most interesting conversations I had with some AMSUG executives at that meeting was about the fact that aside from a select few--The Hartford, Travelers, Selective and other names we hear often--most insurers couldn't give a rat's hind quarters about making "real-time" real for agents before our time in this life runs out.
Why wouldn't carriers want independent agents to be more efficient? The reasons offered for this lack of initiative are many, but they boil down to one word: fear. Carriers still believe that if their rates are "spreadsheeted" alongside their competitors' numbers, they will lose a competitive advantage--in other words, someone may actually find out that their insurer is overcharging them.
You see, as long as insurers can keep these things secret, then the public will be duped into paying more for less, because, after all, most of the public doesn't have a clue what they're getting when they buy an insurance policy. So, when technology comes along to reveal the true state of the emperor's new clothes, the emperors out there (and you know who you are) are scared to death that customers will be exposed to the naked truth.
Can these companies be so blind that they don't realize that independent agents are already "spreadsheeting" their numbers in order to get the best deal for clients? Are they in such an extreme degree of denial?--or are they just greedy? Let the world know what you think right here!
Comments (5)
Greed is a popular term to throw around when discussing insurance these days. I'm not convinced that the insurance industry is any more greedy than any other industry, nor greedier than an average private individual, for that matter. When it comes to upgrading technology, the "fear" I usually see is fear of the technology itself.
If you're still pushing paper or if your rating system currently runs on MS-DOS you might not be ready or willing to make the jump to the 21st century. The transition requires a good I.T. department coupled with a software vendor who knows how to deal with people who aren't used to doing business in an online enivronment.
Posted by Greg | March 28, 2007 3:02 PM
Posted on March 28, 2007 15:02
I agree that the insurance industry is not MORE greedy than many others, but it is hard to agree that the industry is afraid of technology itself. After all, insurance was a pioneer in technology use back in the 1970s. Are we to believe that insurance company officers today are like frightened little children when it comes to technology when their kin in other financial services have readily embraced technology change? That seems unfair to our industry. This is still more about money than it is about anything.
Posted by Ara Trembly | March 28, 2007 3:13 PM
Posted on March 28, 2007 15:13
It has always amazed be that a business like the insurance business, a business that is so Form dependent, is the last to embrace new technologies.
Some of my carriers mail a hard copy of the renewal policy but will send the agent a PDF. Imagine, a PDF that can be filed on the computer hard drive, your portable hard drive and it doesn't take up file cabinet space.
A PDF that is there in your Contact Manager, at your fingertips, easy to reach when a client calls. Hartford is one of the carriers that send PDF files.
Posted by Bob Johnson | March 28, 2007 5:05 PM
Posted on March 28, 2007 17:05
My opinion is that the fear is justifiable. Many of us on the carrier side have had terrible experiences implementing new Policy Admin systems (at least on the Commercial side)---mostly due to vendors. Variable quality, poor maintenance turn-around, misinterpretation of rules, poor concept of carrier operations and inexperienced staff are just some of the vendor experiences I've had.
BTW-is a PDF a legal document??
Posted by Gail | March 29, 2007 2:37 PM
Posted on March 29, 2007 14:37
I also don't believe that 'greed' in and of itself, say like Exxon, is the key driver behind automation decisions. Staying the known course is much more ingrained on the carrier side. It usually requires someone with vision to move the company to a higher state - something that is not easily achieved when the size of carriers rivals some of the largest companies on Earth. Unfortunately vision carries risk and usually moving a large company, even when the outcome seems so assured, is an expensive undertaking. Management will usually defer such expenditures because past attempts usually yielded so little return.
Somewhat more cynically I also believe that large insurance companies really act in self interest and no one retail agent has much of an impact to their bottom line - so the likelihood of real progress in automation will require a major shift in the cost of technology - which to date has been elusive.
Posted by Frank | April 23, 2007 10:58 AM
Posted on April 23, 2007 10:58