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The Connected Business of Insurance

Celebrating Women in Insurance: How Two Female Professionals Are Shaping the Future of Insurance

March 21, 2019

by Applied Communications
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Women in Insurance: Meet 2 Industry Leaders Paving the Way for the Future of Insurance

Women’s History Month is a time to look back and honor the many achievements of women through history and the vast strides made by women today. One does not have to look far to see the influence women have had in medicine, politics, technology, literature and nearly every industry or aspect of society. This month is a time of reflection as much as it is an opportunity to look into the future for women.

Specifically, this had us reflecting on the contributions made by women to the insurance industry. In our research, we came across an article by Property Casualty 360 and we wanted to highlight a few facts from it that we found interesting.

Since 2007, women have consistently comprised about 60% of the insurance workforce, with 1.7 million women employed in the insurance sector in 2016. In a historically male-dominated business, it is clear that the insurance industry today is making important strides towards gender diversity and inclusion. However, when it comes to women in leadership positions, the insurance industry falls short. Research shows that women occupy only 19% of board seats and 11% of named executive officer positions. Furthermore, only 35% of independent agencies are led by a woman agency principal or senior manager. Equity in leadership at the executive level is critical in every industry, especially in technology where partner collaboration and diverse perspectives are essential. Reports also indicate that companies with female decision makers achieve higher market returns and profits.

Establishing mentor-mentee relationships fosters support for women in the insurance industry and increases likelihood of upward mobility. Mentor ship from senior leaders is viewed by women as a top enabler for advancing women into leadership. This represents an opportunity insurance companies must take advantage of in order to support and promote their female employees.

Women Leaders in Insurance

We want to recognize two influential women who are reshaping the insurance industry and working to inspire the next-generation of female leaders.

Kris Hackney, Executive Vice President of Customer Experience, Applied Systems

Kris Hackney is responsible for Applied’s customer delivery strategy and operational execution for the company’s Professional Services, Support and Cloud-based solutions.

How did you get your start in the insurance industry?

I have spent more than 20 years in the software industry, primarily focused on business intelligence and predictive analytics, which gave me an opportunity to be exposed to many industries, including retail, insurance, telecommunications, manufacturing and government. I was drawn to Applied, and thus to a focus on insurance, because of the great opportunity to leverage technology to empower such a critical industry.

What is one important thing that you’ve learned from your professional experience?

At Applied, our mission is to power the business of insurance through innovative, cloud-based software. In my role as the leader of our customer experience organization, I’m responsible for customer delivery strategy and operational execution of Applied’s professional services, support and cloud-based solutions. Throughout my career, I’ve had the opportunity to build great teams. I’m especially proud of how we’ve coupled deeply experienced experts in insurance with individuals from diverse technical backgrounds who bring new perspectives to the table – true innovation takes strong, collaborative teams focused on challenging the status quo.

What do you believe the future of the insurance industry will look like?

The convergence of technology and changing consumer preferences in the insurance industry have agencies and brokerages adopting new, innovative technologies that blend the personal, trusted advice of the agent with customer preferences for interaction – and that is a tremendous business opportunity to capitalize on. Consumer demand for anywhere, anytime access to information is challenging agents to scale their resources to provide around-the-clock service and adopt new technologies that extend the personal touch and trusted guidance of an insurance agent to a 24/7 insurance experience. To provide this experience, digital agencies and brokerages require client self-service software that allows their clients to review policy information, request changes, make premium payments and manage claims processing via online portals and mobile apps. Native mobile apps offer clients quicker, more convenient access to insurance information directly from their smartphone or tablet, providing greater flexibility and servicing options while keeping their agency and brokerage’s trusted advice top of mind.

Read our blog posts, How to Lead Change Management: 6 Guiding Principles or Convenience Is Key: Interacting with the Connected Insured, for more insights from Kris Hackney.


Jackie Gould, Chief Operating Officer, Assurance

Jackie Gould is responsible for the overall client service delivery platform at Assurance, as well as maintaining an efficient operation structure through high quality standards. Jackie’s strength lies in leading Assurance through major operational changes and managing multi-faceted projects that touch many organizational areas.

How did you get your start in the insurance industry?

I started my insurance career at Liberty Mutual one year after I finished college, after moving back to the Midwest from Seattle. It was a time in my life where everything I owned could fit in my car – and it was a very small car. The district sales manager at Liberty hired me as a Special Products Representative, where I worked closely with our sales reps in the greater Chicago area as a property insurance specialist and a liaison to place coverage with our internal underwriting team. It was a training ground like no other to be able to go out on calls with a wide variety of producers, and the experience dismantled my prior conception of what it meant to be an insurance salesperson. We were out meeting business owners every day and helping them manage major risks and costs in their businesses. I learned the technical coverage and underwriting side of the business, as well as how important insurance coverage and the associated services were to a business owner or executive.

What is one important thing you’ve learned from your professional experience?

Scrappiness matters. I discovered that I was hired in that first job with no experience largely because my boss was impressed with the way that I had worked my way through college and how I approached new challenges. Every job I’ve had since has allowed me to get things done with limited resources by being creative and scrappy. I’ve never had a role where I’ve simply taken over a well-defined and well-oiled machine and kept it running. I’ve always been able to roll up my sleeves and make an imprint, build something special, and help to define the future. I’ve been fortunate to work with a lot of people over the years with a similar approach to getting things done.

What do you think is the biggest challenge that women face in the insurance industry today?

I don’t tend to think in terms of challenges for women differently than those for men and that is a testament to the hard work of women in the business world before me. I believe the biggest challenge that we all face is changing our insurance and employee benefit delivery system to catch-up to the current technology, risk, legislative, and consumer environment. As a broker, we must continually earn our position in this new and evolving world. Our role is much bigger than placing coverages with an appropriate insurer and managing the associated transactions. We sit at the risk management and employee engagement table with our clients and help make their businesses better. If we can’t measure our impact, and our clients don’t experience a partnership and value when engaging with us, then we will become obsolete.

What do you believe the future of the insurance industry will look like?

Managing risk is complicated. Engaging employees and providing benefits is complicated. Insurance is complicated. As an executive in my company, I rely on professional partners to help our business with complicated accounting, tax, legal, real estate, and other issues. Although there are mountains of information out there in all of these areas, I don’t have the time to wade through the research and figure out how to apply the information to a given situation. I find trusted advisors in each field to help me. I believe the future of the insurance industry is similar – business owners and executives want trusted advisors to help them to navigate all of the requirements, options, and decision points in their insurance and benefit programs. Analytics will continue to play a rising role in this process, and my hope is that the providers and carriers break down proprietary walls that impede the ability for their clients and brokers to access and use data for better transparency and decision-making.

What do you think? Share your thoughts on how women are shaping the insurance industry of the future.

What Repeat Attendees Say About Applied Net

March 14, 2019

by Applied Communications
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Applied Net is the largest technology gathering of independent insurance agents and brokers in the world. To be held at the Aria Resort in Las Vegas October 14 – 17, Applied Net 2019 explores how the rapid pace of change and opportunity being created by technology in our industry best positions you to thrive in the digital revolution of insurance. This year’s conference promises to be our best one yet and you don’t want to miss all the excitement we have in store, including insightful educational sessions, newfound industry innovations, countless networking opportunities, industry-changing announcements and once-in-a-lifetime evening events.

To give you an idea of what your Applied Net experience could be like, we sat down with Kristin Thelen, Commercial Lines coordinator at Mason Insurance Agency Inc. and three-time Applied Net attendee, to discuss her favorite parts of the conference and why she recommends attending Applied Net 2019.

Applied Communications: Thanks for taking the time to speak with us, Kristin. To start, can you give us a brief introduction to your agency and role there.

Kristin Thelen: We are a P&C agency with 11 users located in Mason, MI. We take pride in being a small town agency that provides a personalized experience to each of our clients.

AC: Appreciate the introduction. Let’s switch gears and talk about Applied Net. What is your favorite part of the conference?

KT: The best part of the conference is the networking opportunities that you are presented with. You meet a variety of people – new users, seasoned users, vendors, consultants, Applied Systems employees, Applied Client Network Board Members and Chapter Leaders – all of who bring something different to the table. As your network grows so does your product knowledge and experience.

AC: How has your business benefited from attending Applied Net?

KT: My agency has benefited tremendously from Applied Net. We bring back so much information and new ideas. Our improved efficiency is the greatest benefit. We learn how to streamline our processes and incorporate new product offerings, such as Applied CSR24®, a cloud-based insurance customer self-service software, and Applied MobileInsured™, a custom branded mobile application, into our agency’s culture, making our clients experience as enjoyable and easy as it can be.

AC: Do you have an example of content that you’ve brought back and implemented into your agency?

KT: The most valuable content that I brought back from conference was the ability to upgrade our proposals and form letters. To fully understand the merge fields and how they work in summaries, proposals and letters made our communications more time efficient and easier to incorporate into the workflow. The enhanced look of layered colors, use of tables and a more polished appearance was just an added bonus.

AC: Can you tell us more about the feeling of community you get from Applied Net?

KT: The atmosphere at Applied New is energetic, enthusiastic and eager. The community of insurance professionals that come together for four days of learning and networking is like no other. Every attendee is there for a common purpose – to make themselves and their agency better. Whether it’s from a technological standpoint or educational perspective, we all share one common goal to be the best and help one another become the best.

AC: Do you feel that Applied Net is a good place to discover new technology?

KT: For sure! It’s the one place you can hear first hand what has changed, been enhanced and what is forth coming directly from Applied Systems CEO, Reid French. The exhibit hall is another great source of information that Applied Net offers. Vendors from all over are there to showcase products that can help make what you do easier.

AC: Do you feel like Applied Net pays for itself in terms of how it helps your agency?

KT: 110% – the return on our investment is continuous. Being able to meet individuals and use them as ongoing resources, being hands-on at the Applied Systems booth and preparing for the changes we know are coming keeps our operations perpetuating.

AC: What other parts of the conference do you enjoy?

KT: Everything about conference is enjoyable. You can tell that a lot of time, effort and care is put into planning this event. From the session tracks to the evening events, it’s four days of learning, networking and fun. However, if I had to pick one, it would be presenting. I had the honor of presenting at Applied Net 2018. The opportunity to share what I know with other users and provide them with new ways of using their systems was incredible.

AC: How many times have you attended Applied Net and why do you continue to come back year after year?

KT: I have attended Applied Net the last three years. Every year offers something different, whether it is the venue, the exhibitors, the session tracks or the presenters. I guarantee you will walk away with new knowledge and ways to improve your agency’s processes.

AC: Would you recommend this conference to your peers? If so, why?

KT: Absolutely! Anything you want to learn, anyone you would like to meet, and what the future may hold is all provided to you at Applied Net. It’s a great opportunity to learn, meet new and passionate people, and even have a little fun.

Learn more about Applied Net and discover how to take advantage of the opportunities available in the digital age of insurance to prepare your business for success today and in the future.

 

The Technology Behind Being a Digital Agency

February 28, 2019

by Michael Howe
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The Digital Age of Insurance is here. This means that agencies can no longer afford to remain un-automated and rely on manual processes or traditional methods of conducting business. Those who do run the risk of being surpassed by competitors. An eroding competitive position will harm all aspects of the business and even raise the risk of not surviving long term.

Consider Blockbuster. The company once had revenue of more than $4.8 billion. Despite a strong brand and market position, Blockbuster was put out of business by Netflix over the course of just a few short years primarily because Blockbuster did not evolve their operating model as the industry went through digital transformation. Instead, they undertook business decisions that emphasized short-term profitability while neglecting the broader transformation happening around them, a transformation that ultimately threatened their long-term survival. Blockbuster, which had studio relationships, content and a rich customer database, enjoyed an enviable position of strength in the market and, to the outside observer, seem well-positioned to continue as such. But, in neglecting the digital transformation, they allowed an opening.  Netflix, an upstart competitor at the time, embraced the transformation and quickly became the market leader. Blockbuster was no more, and it happened almost overnight.

History shows us that those who move swiftly to innovate, adopt technology and improve customer experience are the ones that thrive during digital transformation, enhancing revenue growth and profitability in the process. Digital transformation, when embraced as a core part of your overall business strategy, actually offers the promise of new ways to communicate to the market and strengthen your customer service. If that’s not enough to convince you of the impact that ignoring digital transformation can have on your business, read Technology Adoption: Risk or Reward? for more examples of how other industries have reacted to digital transformation.

I’ve heard many agency owners acknowledge that they need to transform their businesses but they haven’t started yet because the very thought seems too overwhelming. With more than 20 years of experience in the software industry, I know that technology investments can sometimes be viewed as risky – they cost money, involve process change, and require meticulous planning. However, digital technology provides agencies with an opportunity to perform better, move faster and drive even greater success. In fact, according to a Capgemini Consulting and MIT study titled The Digital Advantage: How Digital Leaders Outperform Their Peers in Every Industry, digitally transformed businesses realize significant economic benefits including revenue growth, profitability and market evaluation.

What a Digital Agency Is and Why You Should Become One

For those of you not yet on a path to digital transformation, I urge you seize this opportunity and decisively move to becoming a digital agency. A digital agency is defined as one that leverages:

  1. Digital automation within the agency to drive extreme efficiency
  2. Digital connectivity to policyholders to drive an enhanced customer experience
  3. Digital connectivity to insurers to drive efficient interactions

With these capabilities in place, digital agencies position themselves to generate significant business value in 5 key areas: Growth, Efficiency, Customer Satisfaction, Advice and Trust. If you want to learn more about these 5 key areas of business value and why becoming a digital agency matters, check out The 5 Whys of Becoming a Digital Agency post by Applied CEO Reid French.

For this post, I will focus on the “How” aspect of becoming a digital agency by recommending the types of technology needed to transform your agency and drive significant business value.

Technology Needed to Get Started

  1. Growth

Digital agencies leverage a single management system to gain visibility across an entire book of business, delivering integrated capabilities to manage P&C, Benefits and Sales in a single application. Integrated and open architecture provides essential capabilities for each stakeholder within an agency to have the right information and products available to sell and serve customers. By utilizing a single management system that was designed from the ground up for the user experience and with integrated capabilities, digital agencies drive superior business growth.

Example Technology: Sales Automation
Automating sales operations in your management system allows your sales staff to easily view, monitor, track and forecast new and renewal business directly within the application, eliminating the need to invest time and expense in separate solutions. Having a single view of your prospects and customers within your management system ensures you offer complete coverage for all their insurance needs.

  1. Efficiency

Digital agencies operate more efficiently by utilizing technology that enables staff to better manage customer relationships, sales opportunities, market access, financial accounting, reporting, business processes, and policy and benefits administration. This includes:

  • Streamlining business processes through automated, standardized management system workflows
  • Exchanging policy information with insurer partners via connected applications and APIs accessed from a single sign-on
  • Leveraging mobile technology to reduce time to service and sell accounts by eliminating manual, paper-driven processes, and expediting communication between clients, prospects, colleagues and staff

Example Technology: Mobile
Directly linking mobile apps to the management system empowers your staff with the information they need on the go, and gives them the ability to add prospects, create and manage activities, initiate a claim, and begin new sales opportunities while out in the field.

  1. Customer Satisfaction

Digital agencies deliver superior customer service via self-service portals and mobile apps that provide policyholders with 24/7 access to insurance information. By offering multiple ways for consumers to interact with the business – whether it be in person, phone, online or mobile – digital agencies create happier customers, which ultimately drives business returns through enhanced retention and growth from new business.

Example Technology: Customer Self-Service Portals and Mobile Apps
Provide your clients the freedom to access insurance information, documents and online bill pay when and where they prefer via an online portal or mobile app that is customer branded to your agency. Offering customer self-service options strengthens your relationship with customers and saves money by shifting transactions historically provided by agency staff to self-service. Because of these efficiency gains, customer self-service often delivers a return on investment in less than a year.

  1. Advice

Providing excellent advice to customers remains the core of any strong agency. Digital agencies can automatically find the best markets, as well as identify and highlight policy differences for new business and renewals, making them better risk advisors to both personal and commercial lines customers.

Example Technology: Market Access
Embedded Market Appetite enables you to have better targeted marketing submissions via an agent-driven, real-time search engine for commercial insurance. Using this capability is easy, simply enter two fields to denote the specific type of commercial risk you are searching for and instantly receive a list of insurers most likely to have appetite for that risk and appropriate pricing.

  1. Trust

Using cloud technology, a digital agency provides enhanced security, operations recovery and anytime, anywhere access during any disruptive event.

Example Technology: Cloud
The cloud offers your agency a flexible operating environment with scalability for business growth, stronger business continuity protection, increased mobile access to business information, and compliance related to data privacy regulations like Europe’s General Data Protection Regulation. Hosting agency solutions in a cloud purpose-built for your independent insurance agency fosters client trust and peace of mind knowing that your data is secured, software is current and business is running smoothly 24/7.

The Time to Start Your Journey Is Now

The time for denying the Digital Age of Insurance is over. In fact, consider the transformation now underway as a new and exciting opportunity to make your business better. It’s time to start your journey towards becoming a digital agency. In doing so, you enhance your agency’s ability to meet the needs of the modern consumer and lay a foundation for continued success in the Digital Age of Insurance.

For additional insights on the value of being a digital agency and the types of technology needed to transform your business, download our recently released eBook, The Digital Age of Insurance: 5 Reasons Why Your Agency Should Be Digital.

Michael Howe, Applied SystemsMichael Howe, senior vice president of product management, Applied Systems, is responsible for the strategic direction of the Applied product portfolio. Howe joined Applied in 2013 with more than 20 years of experience in enterprise software. He formerly served as senior vice president of marketing and product management at Aptean, a global provider of industry-focused enterprise software. Prior to Aptean, Howe held senior executive management positions at SAP and other leading software companies.

2019 Digital Technology Survey: Share Your Feedback Now

February 14, 2019

by Reid French
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While digitally transforming your business was once a nice-to-have, it is now an imperative. The time for denial of the Digital Age of Insurance is over. Those who seize the opportunity of transforming their businesses to become digital stand to gain a triple reward of satisfied customers, lower operating costs and faster growth. Conversely, businesses still denying the digital transformation of insurance do so at their peril. It’s time to either accept and thrive – or deny and disappear.

The Industry’s Progress Towards Digital Transformation

To establish an industry benchmark and track digital technology adoption among independent insurance agencies and brokerages, Applied developed an annual Digital Technology Survey. Now in its fourth consecutive year, the survey gives agents and brokers across North America, the UK and Ireland an opportunity to anonymously participate in this study, which determines an average industry score for digital technology adoption at an independent agency or brokerage.

This score is relevant because it reflects the progress agents and brokers have made in their adoption of digital technology. Regardless of where your business ranks compared to your industry colleagues, understanding the role digital technology plays in delivering on the promise of insurance – to safeguard and protect what matters most – in a world more connected than ever before is the first step to ensuring your business thrives today, tomorrow and in the years ahead.

How to Participate in the 2019 Digital Technology Survey

Simply complete the online survey by answering questions about the five competencies of a digital business, including management systems capabilities, data analytics, insurer connectivity, the cloud and mobile. Organizations scoring 80% or higher across all core competencies are considered to be digital businesses, having adopted most of the key drivers of digital transformation.

The results of the survey will be published later this year in the “Applied Digital Agency/Brokerage Annual Report: 2019 Digital Technology Adoption Benchmarks and Trends,” which provides insights on how your digital technology adoption and strategy compares to your peers. By taking the survey today, you’ll be among the first to receive the report upon its publication.

I cannot thank you enough for taking the survey and contributing to the annual report. Know that all of us at Team Applied are here to enable your business to thrive during the Digital Age of Insurance.

The survey is now closed. Applied appreciates your participation! Stay tuned to the blog for the annual report later this year.

Reid FrenchReid French, Chief Executive Officer at Applied Systems, is responsible for the company’s overall business strategy and operational execution. He also plays a prominent role in developing and fostering relationships throughout the Applied community. French came to Applied in 2011, after serving as chief operating officer at Intergraph Corporation, a global company at the forefront of geospatial and computer-aided design software. Early in his career, he was a strategic planner for the Walt Disney Company, and he managed investment banking transactions in the technology sector for Robinson-Humphrey. French holds a bachelor’s degree in Economics from Davidson College and a master’s in Business Administration from the Harvard Business School. He sits on the board of directors for Applied, Autodesk (NASDAQ: ADSK) and The Lovett School in Atlanta.

IVANS Index: 2018 Year-End Results for Premium Renewal Rate Change

January 31, 2019

by Brian Wood
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IVANS Index is a data-driven report of current conditions and trends for premium renewal rate change of the most placed commercial lines of business in the insurance industry. Data collected in the IVANS Index enables insurers to determine competitive rates and the most profitable lines of business for investment. To learn more about IVANS Index, read IVANS Index: Industry Insights to Help You Run Your Business Better.

Positive Uptick in Premium Renewal Rate Change Average Across Nearly All Lines of Business
The latest IVANS Index results for Q4 and year-end 2018 show that insurance industry premium renewal rates are up quarter-over-quarter across nearly all major commercial product lines, except Workers’ Compensation. Commercial Auto, Business Owner’s Policy, Commercial Property, Umbrella, and General Liability show positive results compared to Q3 2018. Workers’ Compensation remains the only line of business experiencing a negative rate change, which was consistent throughout all of 2018.

Q4 and 2018 key findings in premium renewal rate change include:

  • Commercial Auto:  2018 average premium renewal rate change for Commercial Auto was higher compared to 2017 throughout the entire year, peaking in September with an average premium renewal rate change at 4.50% in 2018 versus 2.55% in 2017.
  • BOP:  Quarter premium renewal rate change averaged 4.23%, representing an increase over last quarter’s average of 4.15%. BOP premium renewal rate change finished the quarter at 4.23% in December.
  • General Liability:  General Liability started out 2018 in January and February with lower average premium renewal rate than 2017, averaging 0.44% higher from March through the remainder of 2018 across the same period of time the year prior.
  • Commercial Property:  Q4 premium renewal rate change rose again quarter over quarter, with an average rate change of 3.74% as compared to 3.34% in Q3. Commercial Property premium renewal rate change reached its high for 2018 in Q4 at 3.95% in December.
  • Umbrella:  Umbrella premium renewal rate change reached its high for 2018 in Q4 at 2.76% in November. 2018 average premium renewal rate change for Umbrella was higher compared to 2017, averaging .70% higher year over year.
  • Workers’ Compensation:  2018 average premium renewal rate change for Workers’ Compensation was consistently more negative compared to 2017, with the exception of December, which ended at -2.66% in 2018 versus -2.92% in 2017.

 

Relative to other lines of business, BOP’s average premium renewal rate experienced the most variability between 2018 and 2017.

 

Workers’ Comp average premium renewal rate change reached -3.04% in Q4 versus -2.76% in Q3. 2018 was consistently more negative compared to 2017, except for December, which ended at -2.66% in 2018 versus -2.92% in 2017.

The end of 2018 experienced the greatest change in premium renewal rates from the year prior for nearly all major commercial lines products. As we begin 2019, the IVANS Index will continue to provide data-driven insights into the health of the industry, enabling brokerages to give more accurate premium renewal guidance to customers and serving as a valuable reference to insurers when determining pricing strategies.

Analyzing more than 120 million data transactions, the IVANS Index premium renewal rate change measures the premium difference year over year for a single consistent policy. Inclusive of more than 32,000 agencies and 400 insurers and MGAs, the IVANS Index is reflective of the premium rate change trends being experienced by all agencies and insurers across the U.S. insurance market.

For further insights into premium renewal rate change across the industry, download the Q4 and 2018 year-end IVANS Index report >

Headshot of man in casual attire smiling.Brian Wood, Vice President of Data Products Group for IVANS, develops innovative and data-driven applications, tools and services for the insurance industry. Prior to this position, he co-founded EvoSure, which was acquired by Applied in Sept 2015. Brian spent 10 years with Marsh & McLennan as Senior Vice President of Strategy and Business Analysis where he developed global insurance distribution platforms. Brian began his career in insurance building the first company to bind insurance online, insuranceOrder.com (a Trilogy company) which was acquired by Marsh & McLennan in 2001.

Why You Should Participate in the Best Practices Agency Study

January 17, 2019

by Applied Communications
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Since 1993, Reagan Consulting and the IIABA, “Big I,” have conducted the Best Practices Agency study to identify the top performing agencies in the United States. Conducted on a three-year cycle, the study measures the operational performance of nominated agencies against critical industry and business benchmarks.

2019 marks a new cycle in the Best Practices Agency study. Agencies who believe they have the qualities of a Best Practices Agency and are interested in participating can now be nominated by Applied, as well as their regional IIABA association or insurer partners. To participate in the study, agencies are required to share key business practices and to complete an in-depth survey detailing your financial and operational year-end results. Results are scored and ranked objectively for inclusion based on operational excellence.

Reap the Benefits of Being a Best Practices Agency

As the Best Practices program has grown, being nominated and taking part in the study has become a prestigious recognition of the superior accomplishments of the top insurance agencies in the country. Best Practices agencies are viewed as the industry standard of excellence and looked upon for insights on how to drive superior operations and drive revenue among their peers.

If selected as a Best Practices Agency, your agency will receive:

  • National exposure through ads in trade publications
  • Invitation to the Best Practices Symposium, a multi-day event open only to Best Practices Agencies and study sponsors for networking and education
  • Wall plaque and color copy of the media ad associating your agency with “Best Practices Agency” status
  • Specialized media kit to announce status to clients, insurers, your community, including a “Best Practices Agency” logo

The return on time is enormous with the survey being beneficial even for an agency that does not receive the status of Best Practices Agency. By taking the time to participate in the survey, your agency will receive a free Agency Performance Analysis from Reagan Consulting which compares your results to those of your industry peers who are of a similar size in revenue. This provides invaluable data to your agency for its own future strategic, operating and financial planning. It provides the ability to critically assess and enhance your practices to improve agency performance beyond what a traditional internal review might stimulate. There is no better tool for an agency to use in clearly defining and communicating its goals to its staff than the directly applicable benchmarking data.

Participating in the Best Practices Agency Study Is Easier Than Ever

Submissions will now be managed through an online portal, significantly reducing the time to prepare the data workbook to less than a day. Additionally, Applied offers helpful guidance as part of our commitment to your success to streamline the submissions process. This includes a nomination submission, a step-by-step guide to quickly pull information you need for your submission directly from your agency management system, and access to a dedicated Applied Support resource to assist your agency through the reporting process.

If you question whether participating is worth the effort, we would unquestionably say yes. Even if you feel like you are not big enough or have not been in business long enough, apply anyway – you will create the internal procedures that will get you there in the future. Ultimately, the program provides great goals and diligent practices to enhance your agency’s performance and value.

For more insights on the Best Practices Agency study and the benefits this program can provide your agency, watch the Become a Best Practices Agency webinar we recently hosted with Reagan Consulting.

The 5 Whys of Becoming a Digital Agency

January 03, 2019

by Reid French
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For years, we’ve been talking about the impending digital transformation of insurance. Well now that it’s here, how is digital transformation impacting our industry?

Last year, the management consulting firm McKinsey completed a research paper titled Time for Insurance to Face Digital Reality. To be honest, the first page was a bit tough to read. It stated that the insurance sector offered the worst online customer experience of all industries surveyed, other than utilities. After that first page, the report shifted to a call to action for agents, brokers and insurers alike to seize the opportunity of digital transformation. The time for denial of the digital trend in insurance is over. Businesses still denying the digital transformation of insurance do so at their peril. It is time to either accept and thrive – or deny and disappear.

So as we consider the opportunities offered by the digital age of insurance, it helps to first define what it means to be a Digital Agency.

At Applied, a Digital Agency is defined by 3 core characteristics:

1. Digital automation within an agency to drive extreme efficiency
2. Digital connectivity to insureds to drive an enhanced customer experience
3. Digital connectivity to insurers to drive efficient interaction

Now that we have defined what it means to be a Digital Agency, we shall spend the rest of our discussion together on why you should become a Digital Agency. Applied believes that the deployment of enhanced technology for agencies, their insureds and insurer partners drives significant business value.

Here’s why being a digital agency matters, and 5 digital agencies that are thriving in the Digital Age of Insurance:

1. Digital agencies grow faster.

Agencies that adopt technology are in a better position to more quickly identify new business opportunities.

Case in Point: ChurchWest Insurance Services has doubled their premium in five years with sales automation.

2. Digital agencies are more efficient.

Agency efficiency drives agency profitability. Time is money, and by being more efficient in your day, more hours can be spent on revenue generating activities.

Case in Point: Schultheis Insurance saves 100,000 hours per year by eliminating manual, paper-driven tasks through download.

3. Digital agencies deliver enhanced customer satisfaction.

Simply said, happy customers mean loyal customers, and loyal customers mean retained business. By retaining business and actively drawing in new customers (often through happy customer referrals), you grow your business.

Case in Point: Hall & Company saved $70,000 in COI labor, printing and postage expenses per year with client self-service technology.

4. Digital agencies provide better advice to their customers.

Insurance customers need agents for access to products and advice to stay protected in the best and worst of times. Digital agencies must make sure that their technology supports the solid advice they provide to their customer base.

Case in Point: 618 Insurance Agency utilizes an online market search tool to instantly identify markets for commercial lines risks, enabling them to close more new and renewal business in less time and provide clients the best coverage.

5. Digital agencies generate greater trust.

Customer trust is vital for all businesses, but absolutely essential in the world of insurance. Without trust, insurance simply does not work, as any insurance product is essentially based on a promise.

Case in Point: Fisher Brown Bottrell operates in the cloud to keep their data safe, software updated and business running smoothly – no matter the circumstances – so that they are there for their clients when needed most.

The Digital Agency is the future of our industry, and it is the path to value for both you and your customers. It delivers business value to your organization by enhancing growth, efficiency, customer satisfaction, advice and trust in your business. For those not on the path of digital transformation, I urge you to start your journey to becoming a Digital Agency today. I promise, your owners, your employees and your customers will thank you for it.

For more insights on the business value of a Digital Agency, download our eBook, The Digital Age of Insurance: 5 Reasons Why Your Agency Should Be Digital.

Reid FrenchReid French, Chief Executive Officer at Applied Systems, is responsible for the company’s overall business strategy and operational execution. He also plays a prominent role in developing and fostering relationships throughout the Applied community. French came to Applied in 2011, after serving as chief operating officer at Intergraph Corporation, a global company at the forefront of geospatial and computer-aided design software. Early in his career, he was a strategic planner for the Walt Disney Company, and he managed investment banking transactions in the technology sector for Robinson-Humphrey. French holds a bachelor’s degree in Economics from Davidson College and a master’s in Business Administration from the Harvard Business School. He sits on the board of directors for Applied, Autodesk (NASDAQ: ADSK) and The Lovett School in Atlanta.

Happy Holidays from Team Applied

December 17, 2018

by Reid French
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On behalf of all of us at Team Applied, I’d like to thank you for your ongoing partnership with our company. As we conclude this year and head into 2019, we look forward to driving continued success for your business in the digital age of insurance.

In the spirit of this festive season, we’ve created a special video card. I hope you enjoy it.

Wishing you and yours health and joy now and in the New Year.

Warmest regards,

Reid French

Reid FrenchReid French, Chief Executive Officer at Applied Systems, is responsible for the company’s overall business strategy and operational execution. He also plays a prominent role in developing and fostering relationships throughout the Applied community. French came to Applied in 2011, after serving as chief operating officer at Intergraph Corporation, a global company at the forefront of geospatial and computer-aided design software. Early in his career, he was a strategic planner for the Walt Disney Company, and he managed investment banking transactions in the technology sector for Robinson-Humphrey. French holds a bachelor’s degree in Economics from Davidson College and a master’s in Business Administration from the Harvard Business School. He sits on the board of directors for Applied, Autodesk (NASDAQ: ADSK) and The Lovett School in Atlanta.

A Journey Through Applied’s 35-Year History

December 06, 2018

by Applied Communications
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For 35 years, Applied’s commitment to innovation has enabled thousands of agencies, brokerages, and insurers from around the globe to safeguard and protect what matters most in people’s lives. Who would have imagined that a simple idea – a new way to manage an agency and connect an industry – would revolutionize the business of insurance?

It did, and over the last 35 years, Applied has been at the forefront of insurance technology with a myriad of innovative “industry-firsts.” Here are some of the key milestones throughout our storied history:

Developing Your Perpetuation Strategy

November 21, 2018

by Harrison Brooks
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Why are so many insurance agencies selling to third party buyers? Many valid reasons exist: record high valuations, desire for resources, legislative changes, competition, etc.

However, I believe the primary reason agencies sell is due to a lack of a formalized and funded perpetuation plan. Many agencies have informal perpetuation plans in place, but an agency must have motivated employees and sufficient cash flow in order to turn their plan into reality. If your agency desires to formalize its perpetuation plan, I would refer you to Reagan Consulting’s Private Ownership Study. The study is designed to help agency principals navigate the maze of perpetuation alternatives and create effective strategies to remain privately-held, if desired. In this study, we highlight four key elements that should be incorporated into your agency’s perpetuation plan: (i) healthy operations, (ii) reasonable sellers, (iii) able buyers and (iv) an effective transfer mechanism. Without any of these four key elements, your perpetuation plan will likely fail.

A high-level summary of the four pillars of perpetuation and a few key findings from The Private Ownership Study are outlined below for your quick reference:

  1. Healthy Operation

The ability to perpetuate any business begins with the operational health of the business. For an insurance agency, operational health encompasses two key factors:

  • Organic growth. Organic growth refers to the rate at which an agency grows its revenue through expanded sales efforts rather than by acquisition of existing revenue from another agency or agent.
  • Profitability. Profitability is the measure of an agency’s true financial viability. If an agency isn’t turning a profit, it is unlikely to hold long-term value.

In order for an agency to perpetuate, there must be a healthy balance between growth and profitability.

Reagan Consulting developed a simple growth and profitability balancing equation called “The Rule of 20.” This metric is calculated by adding half of an agency’s earnings before interest, taxes, depreciation and amortization (EBITDA) margin to its organic revenue growth rate. An outcome of 20 or higher typically means a firm is generating a shareholder return of about 15% to 17%, which is generally considered a normal return under ordinary market conditions.

  1. Reasonable Sellers

Our research indicates that a reasonable seller possesses three key characteristics:

  • Valuation. A reasonable seller is willing to sell shares internally at a discount to third party valuation multiples.
  • Financing. A reasonable seller either personally finances the sale of his or her ownership stake, participates in agency financing or assists in arranging suitable third-party financing for buyers.
  • Timing. A reasonable seller is willing to sell his or her shares to the next generation of shareholders once they are ready to buy into the firm. Further, a reasonable seller is willing to time share sales to avoid redemption title waves – situations where one or several large shareholders need to be redeemed simultaneously.
  1. Able Buyers

Finding able buyers is the biggest challenge to internal perpetuation. Our Baseline Perpetuation Survey asked agencies about their biggest challenges with finding able buyers. Over 60% cited a lack of financial resources. An able buyer must be financially capable of purchasing equity in the firm, and a buyer’s financial capability can generally be boiled down to one question: how much must he or she come “out-of-pocket” to purchase equity in the firm?

To evaluate this question, we look at a metric called the “Buyer Coverage Ratio.” The Buyer Coverage Ratio is calculated by dividing the buyer’s ownership distributions or bonuses by the annual principal and interest payments due on their ownership purchase notes. Our research revealed that a typical agency has a Buyer Coverage Ratio of 100%. This means that over half of firms structure their perpetuation plans to ensure that a buyer’s principal and interest payments are entirely covered by shareholder distributions or bonuses. While there is not a “correct” Buyer Coverage Ratio, determining whether or not your firm has able buyers is impossible without considering the Buyer Coverage Ratio and the resulting out-of-pocket requirements for the buying group.

  1. Effective Transfer Mechanism

An agency must have an effective mechanism in place to facilitate the transfer of ownership from one generation of owners to the next. In our In-Depth Perpetuation Survey, over 60% of firms reported their primary method of transfer is ownership purchases whereby an individual buys ownership shares either from another shareholder or from the company.

In determining which transfer mechanism is right for an agency, the owners must match the transfer mechanism with the agency’s unique DNA and circumstances. This is a critical process, as not all transfer mechanisms will work for every agency. The agency’s distribution philosophy, shareholder distribution, growth prospects and other attributes will influence the appropriateness of any given transfer mechanism. Reagan Consulting specializes in designing transfer mechanisms to ensure that your agency’s perpetuation plans will work successfully.

Ultimately, successful agency perpetuation – whether it is a merger or sale to a third party or an internal transaction – is about protecting the owners’ ability to choose their direction without limiting their range of choices by preventable factors or circumstances.

For more insights on perpetuation and key findings from The Private Ownership Study, watch the “Developing Your Perpetuation Strategy” webinar I recently hosted or contact me, Harrison Brooks, at hbrooks@reaganconsulting.com.

Harrison BrooksHarrison Brooks joined Reagan Consulting in 2015 and is a Vice President of the firm. Harrison primarily works with clients on mergers & acquisitions, agency valuation and strategic consulting projects. Prior to joining Reagan, Harrison spent two years at the private equity firm, Carousel Capital, acquiring business and consumer services companies. He was responsible for leading valuation exercises and executing due diligence processes. He also worked closely with management teams on strategic planning and value creation initiatives. Harrison began his career in investment banking with Edgeview Partners (now Piper Jaffray). During his tenure in mergers and acquisitions, he completed numerous buy and sell side transactions. Harrison is a Certified Valuation Analyst (CVA) and he graduated from the University of North Carolina at Chapel Hill with a Business Administration degree from the Kenan-Flagler Business School. He currently maintains the Series 63 and 79 FINRA Registrations through Reagan Securities, Inc., the affiliated FINRA-registered Broker/Dealer of Reagan Consulting, Inc.