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The Connected Business of Insurance

IVANS Index: 2018 Q1 Results for Premium Renewal Rate Change

April 12, 2018

by Applied Communications
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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: Get Ahead of Renewal Pricing for Your Clients.

Q1 2018 Results Show Positive Uptick in Premium Renewal Rate Change Average Across Nearly All Lines of Business
The latest IVANS Index results for Q1 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 Q4 2017; however, Workers’ Compensation demonstrated slightly negative premium renewal rate change during the quarter.

Key findings from the 2018 Q1 results include:

  • Commercial Auto: Premium renewal rate change averaged 4.20% for Q1, ending at 3.87% in March.
  • BOP: Quarter premium renewal rate change averaged 4.00%, representing an increase over last quarter’s average of 3.85%. BOP renewal rate change finished the quarter at 4.29%.
  • General Liability: Q1 premium renewal rate change experienced an uptick at 2.01% compared to Q4 which averaged 1.86%. General Liability renewal rate reached 2.24% at the end of March.
  • Commercial Property: Q1 premium renewal rate change increased quarter-over-quarter, with an average rate change of 3.11% as compared to 2.91% in Q4 of last year.
  • Umbrella: Quarter premium renewal rate change spiked in March, finishing the quarter at 2.13% and increasing the Q1 average to 1.49% from 1.34% in Q4.
  • Workers’ Compensation: Premium renewal rate change dipped again in Q1, averaging at -2.47% as compared to -2.32% in Q4.

Commercial Auto
Premium renewal rate change for Commercial Auto insurance averaged 4.20% in Q1. Insurance buyers in Florida continue to experience a premium renewal rate change higher than the average, with Q1 rate change for Florida buyers averaging 8.58% premium renewal rate change versus overall Commercial Auto at 4.20%.

BOP
March marked the quarter high for Business Owner’s Policy at 4.29% premium renewal rate change, with the low in February at 3.80%. BOP for real estate firms is increasing faster than other industries, with Q1 2018 rate change at 5.66% versus the national average at 4.00%.

Workers’ Compensation
Workers’ Compensation rate change averaged -2.47% in Q1 versus -2.32% in Q4 2017. February marks the lowest premium renewal rate change of the quarter at -3.61%, with March being the second lowest at -2.79%. Social services experienced more variable average premium renewal rate change for Workers’ Compensation than the industry average. In Q4 2017, social services averaged a 0.74% premium renewal rate change versus the national average of -2.32%.

Quarter-over-quarter, premium renewal rate change continues to show significant positive momentum across the majority of commercial lines. Analyzing more than 120 million data transactions, The IVANS Index continues to serve as a product and pricing tool for our insurer customers and provides the industry’s only data-driven insights for our agencies as they provide renewal guidance to their customers.

For further insights into premium renewal rate change across the industry, download the full IVANS Index Q1 2018 report now >

Survey Says: Insurance Agencies Progress Towards Digital Transformation

March 29, 2018

by Kris Hackney
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Technology is rapidly changing the world we live in. It has created a new kind of consumer who expects mobile access to information and online self-service from every company they do business with – and insurance is not immune. It’s critical for agencies to adopt a digital strategy in order to serve customers the way they want to be served. History shows us that failure to embrace digital transformation can put your business at risk of not surviving long term.

To better prepare agencies for digital transformation, Applied Systems recently hosted a Digital Transformation of Insurance webinar. During this webinar, we explored the drivers of digital transformation in insurance, how other industries have reacted to change, the opportunities technology provides agencies and steps to successfully navigate digital transformation.

I always like to hear from the audience during webinars, so we included a few quick polls to gauge where agencies similar to yours are in their digital transformation journeys. What struck me about the results was how many attendees have made progress towards digital transformation, and that obstacles still remain even for those who have made a strong start.

Here is a closer look at the poll results 

Question #1: What do you think of when you hear the term “digital transformation”?
As noted in the news daily and discussed at every industry event, the insurance industry is undergoing digital transformation. But what exactly does the term “digital transformation” entail?

In a world that is all about anytime, anywhere access to information, I was not surprised to see that most of our attendees associate mobile technology with digital transformation. However, each of these responses – internet of things, mobile technology, data analytics, going paperless and the cloud – play an important role in digital transformation.

Wikipedia defines digital transformation as “the change associated with the application of digital technology in all aspects of human society.” This definition covers three vital components of digital transformation:

  • Change: Digital transformation is not about simply making traditional methods faster and more convenient, but enabling new approaches to innovation.
  • Technology: Digital technology used to be computer-to-computer, but now it encompasses mobile, the internet of things, wearable technology and much more.
  • Human: No business is immune from digital transformation. It involves all generations and spans all industries.

Question #2: Where are you in the process of digital transformation?
Most leaders would agree that digital transformation is necessary, but vary with respect to which transformation stage they are in.

I was encouraged to see that a majority of our audience (81.1%) has at least made a start in their digital transformation journeys. For those not yet on the path to digital transformation, I understand that simply thinking about the implications of transforming your organization can be overwhelming. For some, taking those initial steps — deciding what digital transformation means to you, identifying necessary changes, setting specific goals, etc. — is the hardest part. For others, the challenges they encounter further down the road to digital transformation can hinder their progress. Which brings me to…

Question #3: What is your biggest challenge related to digital transformation?
For those organizations who have not yet “transformed,” we wanted to better understand the hurdles they are trying to overcome to achieve their goal.

I was not surprised to see that almost half of our attendees cited cultural resistance as their biggest obstacle. Many leaders fail to recognize that change takes time. Instead of preparing their culture for change, most leaders believe it’s best to move quickly and jump right into it. Unfortunately, about a week in, they realize they should have prepared their culture because they don’t have any support. You can change technologies very quickly in the right circumstances, but altering the way employees think about their roles, the business, and your culture doesn’t happen overnight. People must acknowledge and buy into the need to change at the most basic level. To help create a more receptive environment, include employees in the planning process then clearly define goals, roles and processes.

Despite what obstacles you’re facing, nothing is insurmountable and every challenge must be faced head-on to ensure a successful and sustainable business now and in the future.

Embracing digital technology for a brighter tomorrow
When you think about the core promise of insurance — to safeguard and protect what matters most in people’s lives — it is vital to use digital technology to ensure your agency will be there when your customers need you most.

For more insights into how to successfully navigate the digital transformation of your agency, watch the Digital Transformation of Insurance webinar I recently hosted.

Kristin HackneyKris Hackney, executive vice president of customer experience, is responsible for Applied’s customer delivery strategy and operational execution for the company’s Professional Services, Support and cloud-based solutions. She is the former vice president of Worldwide Enterprise Solutions & Services for Chicago-based SPSS Inc., a leading global provider of predictive analytics software and solutions, now part of IBM.

5 Reasons Why You Should Attend Applied Net 2018

March 15, 2018

by Applied Communications
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Each year, thousands of insurance agents, brokers, industry experts and Applied team members from across the globe come together to collaborate on industry topics, discover the latest innovations and network with industry peers and leaders. As the largest gathering of insurance professionals, Applied Net provides the arena for agents and brokers to discuss how to embrace digital transformation and capitalize on new business opportunities.

Applied Net 2018 is sure to be bigger and better than ever. Here are the top 5 reasons why 99% of attendees say they would recommend Applied Net to a colleague:

  1. Build your industry and technical knowledge
    Choose from more than 200 educational sessions taught by peers, subject matter experts and industry leaders. Applied Net provides attendees 4 days of jammed-packed learning opportunities that are sure to deliver valuable insights.
  1. Explore the latest innovations and products
    Discover how to connect your staff to customers and insurer partners in more ways than ever before. With 100+ insurance companies and industry partners exhibiting, the Applied Net Exchange is the forum to uncover the newest innovations and services driving the digital age of insurance.

  1. Grow your community
    Cultivate relationships at the world’s largest gathering of insurance professionals. Applied Net provides the opportunity to meet industry leaders paving the way and to network with a community of 3,000+ of your peers.
  1. Network at exciting events
    Look forward to unforgettable experiences in the evenings at exclusive networking events. A lively assortment of entertainment presents the perfect setting to connect with fellow attendees.
  1. Be inspired by our engaging keynotes
    Get inspired by extraordinary keynotes from Applied leaders and engaging guest speakers. Past speakers include Captain Sully Sullenberger and Madeleine Albright, who shared their unique outlooks and approaches on business, leadership, customer experience and more.

Applied Net 2018 takes place October 15 – 18 at the Gaylord Opryland Resort & Convention Center in Nashville. Attend Applied Net to learn how agencies, MGAs and insurers must incorporate digital technology into their organization’s DNA to compete and thrive in this new digital age.

Register Now for Exclusive Early-Bird Discounts >

A Digital Transformation Roadmap

March 01, 2018

by Reid French
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For years, we’ve been talking about the impending digital transformation of insurance. Well, it’s no longer just coming – it’s here. While digitally transforming your business may have previously been optional, it’s now an imperative to deliver on the core promise of insurance: to safeguard and protect what matters most. The question that remains is will you embrace the digital transformation of insurance or will you ignore it?

Making the Case for Digital Transformation
If we examine how other industries have reacted to digital transformation, you will find that existing industries have either ignored digital transformation, most often to their peril, or they have embraced it, most often to great success despite the fear of change. Think of Blockbuster. The organization did not react or evolve its operating model when digital transformation took place. Blockbuster, which had studio relationships, content and a rich customer database, should never have allowed Netflix to become the king of streaming as this technology became available. They chose short-term profitability over long-term survival. History shows us that those who move swiftly to innovate, to adopt technology, to advance customer experience are the ones that fare the best during digital transformation, enhancing revenue growth and profitability in the process.

Why Should Your Agency Digitally Transform?
Digital transformation strengthens an independent agency’s core value as a trusted advisor and ensures longevity via a more competitive and sustainable position in the marketplace. Specifically, digitally transformed businesses stand to reap rewards related to customer retention, employee retention and return on investment.

  • Customer retention
    By delivering the excellent customer experiences consumers expect, such as online portals and mobile apps, you create happier customers, which ultimately drives business returns through enhanced retention. In fact, organizations that prioritize customer experience generate 60% higher profits than their competitors.
  • Employee retention
    To attract and retain talent now and in the future, agencies must make their businesses more appealing to a workforce that expects instant access to information, both in the office and while on the road or at home. Adopting a digital transformation strategy that provides the best software tools to your team will enable higher retention and easier recruitment.
  • Return on investment
    Digital technology empowers employees to focus their time and effort toward selling insurance and servicing policyholders by reducing manual tasks and processes. In fact, digital agencies realize a 144% higher revenue per employee than non-digital agencies.

Next Steps
The digital transformation of insurance is underway. Becoming a digital agency requires solid planning, resource allocation and effective change management. With a clear transformation strategy, you can build an agency that is more valuable to your customers, your employees and your owners, remaining relevant during this time of change in our industry.

For insights on how to successfully navigate the digital transformation of your agency, download the 7 Steps to Digital Transformation eBook today.

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.

How to Lead Change Management: 6 Guiding Principles

February 15, 2018

by Kris Hackney
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Today, it’s critical for agencies to evolve business operations and adopt technology to keep pace with consumer demands. But with adopting the latest innovation comes change, and there’s no way around it – change can sometimes be difficult. No matter if it’s a big or small change, change must be managed with strategy and proper direction. In fact, about 70% of all change initiatives fail because of inadequate planning. Don’t let your business be a part of that statistic.

Why do so many change initiatives fail?

Many leaders fail to recognize that change takes time. Instead of preparing their culture for change, most leaders believe it’s best to move quickly and jump right into it. Unfortunately, about a week in, they realize they should have prepared their culture because they don’t have any support. You can change technologies very quickly in the right circumstances, but altering the way employees think about their roles, the business, and your culture doesn’t happen overnight. The time required to transform hearts and minds must be built into your change management plan.

Key principles to change management

Change management is the discipline of leading individuals, teams and entire organizations through organizational change via a combination of behavioral and social sciences, information technology and business solutions. By understanding the basic phases of change and valuing your staff, you can prepare your culture for change and avoid common pitfalls of failed change efforts.

To successfully navigate change requires an explicit focus on 3 core principles:

  1. People
    The people who make up your organization are one of the most crucial elements for change management success. People must acknowledge and buy into the need to change at the most basic level. Once buy-in is established, employee engagement at each stage needs to be closely monitored to address any resistance and create a shared sense of urgency for change. Continual, transparent communications will foster listening and provide a sounding board for issues and concerns. To help create a more receptive environment, include employees in the planning process then clearly define goals, roles and processes.
  1. Process
    Processes detail how the work gets done, providing a plan for introducing and systemizing your technology strategy. Risk can be managed by putting a robust governance structure in place, where processes are documented to establish a foundation for ongoing growth. Finally, processes should be continuously updated based on best practices and lessons learned.
  1. Technology
    Technology investment must encompass all aspects of your business, from managing internal staff to connecting to customers and insurer partners. It must integrate all applications to deliver a consistent user experience and create a single view of your business. Agencies will not succeed managing separate, disparate systems that create multiple sources of data. When selecting the technology right for the business, it must also be flexible and scalable enough to support current and future growth.

6 ways to successfully navigate change

Before diving in head first, it’s important to have a clear conception of what you’re trying to achieve. With this vision in hand and the 3 core principles in mind, agencies can better strategize initiatives that deliver value.

Here are 6 guiding principles to help you map out a successful change management program:

  1. Begin the journey with the end in mind
    First, you need to determine the ideal end state and create a game plan to achieve these goals. That idea can’t be too static — you need to allow for alterations along the way — but you need a clear vision of the end state to get everyone moving in the same direction. People don’t need every tiny detail about the future state, but they do need a rough idea of where we’re going. They need to be able to visualize that there is a better place waiting for them out there and they need to be able to imagine themselves in that place.
  1. Define technology requirements and design
    Once you have set your end goal, begin to identify the areas of deficiency in the agency’s current technology strategy. Rethink how the business leverages its IT investment, weaving digital technology into the fabric of daily operations to become a digital agency. When considering the technology to adopt, be sure to invest in technology that both your customers and staff expect in today’s digital age. Keeping customer experience top of mind throughout this stage will make sure you future-proof your agency for success in the years to come.
  1. Identify and manage key stakeholders
    To succeed with change management, you need to identify the people who will be most affected by your proposed changes. These people will become either the strongest resisters or your most powerful champions for change. Ensure their commitment and enthusiasm by involving them in the creation of your change management vision.
  1. Develop metrics and milestones
    In order to know if the changes you made were successful, you need to define the keys to success and employ necessary tools for tracking your progress. It’s also important to schedule milestones which people will be able to see and celebrate. This will provide proof that efforts are working and add to the motivation to keep going.
  1. Deploy communications and training
    A clear vision of your goal won’t help much if you don’t share it. Do everything in your power to get your vision across and instill a sense of mission in employees. It’s also important to remember that communication isn’t one way. The stakeholders that are closest to the thing you’re seeking to change often have insights that you don’t. It’s important to encourage their feedback and continuous dialogue throughout this process. As things change, continue to educate your entire organization on how the change will benefit them and offer training on new procedures and systems.
  1. Continually reassess and make adjustments
    You must understand that no change program goes completely as per the plan. As you lead your organization through change, new and unexpected challenges will arise. The success of your change management depends upon adjusting to those challenges.

Why is change management important?

In too many situations, change has resulted in a significant amount of waste and anguish in organizations. Useful change tends to be associated with a multi-step process that creates power and motivation. It requires dedication and must be driven by high-quality leadership who demonstrate their commitment to its success. The rewards for those organizations that manage their change efforts well have improved their competitive standing and positioned themselves for a far better future.

Kristin HackneyKris Hackney, executive vice president of customer experience, is responsible for Applied’s customer delivery strategy and operational execution for the company’s Professional Services, Support and cloud-based solutions. She is the former vice president of Worldwide Enterprise Solutions & Services for Chicago-based SPSS Inc., a leading global provider of predictive analytics software and solutions, now part of IBM.

2018 Digital Technology Survey: Share Your Feedback Now

February 01, 2018

by Reid French
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Technology has changed the way we live and work. All of us are experiencing a more connected life in a more connected world. These connected experiences have impacted the expectations of insurance consumers and businesses across our industry.

For years, we’ve been talking about the impending digital transformation of insurance. Well, it’s here. While digitally transforming a business might have seemed like an option only for early adopters, it’s become an imperative for us all.

Now that the digital transformation of insurance is here, how well are agents and brokers adopting digital technology?
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 third 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 2018 Digital Technology Survey
Simply complete the online survey by answering questions about the five competencies of a digital agent/broker, including management systems capabilities, data analytics, insurer connectivity, the cloud and mobile. Agencies/brokerages scoring 80% or higher across all core competencies are considered to be digital agents/brokers, 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: 2018 Digital Technology Adoption Benchmarks and Trends.” 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 agency or brokerage to thrive during the Digital Transformation of Insurance.

Select your region below to start the survey:

U.S. Survey >

Canada Survey >

UK Survey >

Ireland Survey >

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.

The Digital Agency: Connecting Minds and Machines

January 18, 2018

by Trace Meek
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Digital technology is integrated into every aspect of our lives. For instance, when you go to the grocery store you can process your own purchases via a self-checkout. Or, when you go to a restaurant you can order ahead online or through your smartphone. The digital age has created a new kind of consumer who expects on-demand self-service with every company they do business with, including insurance agencies.

To capitalize on new customer service and business paradigms, the insurance industry is undergoing rapid digital transformation. The digital transformation is about realizing an opportunity to better service clients and creating an enduring and more profitable business. A digital agency leverages modern technologies to connect its agents, insurers, clients and prospects. It automates business operations to transform into a paperless agency, saving time and money on outdated processes.

Embracing Change
More and more agencies like Condon-Meek are embracing digital technology to automate their business operations. Our agency was experiencing inefficiencies with manual, day-to-day tasks that prompted us to search for technology to enable flexibility and automation throughout our agency. We invested in technology to become a digital agency and quickly realized the benefits.

Becoming a digital agency enables us to:

  • Operate more efficiently
  • Make more informed business decisions
  • Improve the customer experience
  • Build stronger insurer relationships
  • Create new business opportunities

Our Digital Transformation Strategy
To transform our agency, we leveraged four capabilities to drive our digital technology strategy.  

  1. Agency Management System
    Working in multiple systems created a lot of confusion and inconsistency at our agency. A lot of time and money was also being wasted maintaining multiple, disparate systems. To more efficiently manage our business, it was important to have a unified system across the entire agency. 

    We partnered with Applied to implement an agency management system that could provide essential capabilities for each stakeholder in the business to better manage customer relationships, sales opportunities, financial accounting and policy and benefit administration across the entire staff, in one application.

    Our new agency management system has dramatically impacted our sales process. My team can now input a client in less than 90 seconds, identify cross- and up-sell opportunities, track won or lost opportunities, and set follow-up reminders — all benefits that most management systems don’t offer. This tool also allows us to look into the future and see what’s in our sales pipeline for the next 10, 30, 60 and 90 days. I can see where we are falling short and I’m able to fix the issue today rather than 45 days from now. This has been invaluable to me because what you can track, you can manage.

    Having an agency management system with the ability to automate all business processes at our agency created a better flow of operations, eliminated additional costs, resources and time spent using multiple systems, and enabled us to nearly triple our business this year.

  1. Insurer Connectivity

    Automating insurer connectivity enables our agency to seamlessly communicate and exchange data from our system to insurers’ systems via download. The ability to interact with insurers while operating in our system saves my staff immense time and enables them to be more productive.

    Our agency is now better equipped to connect with insurers thanks to tools like rating software, which deliver accurate quotes through real-time connectivity. By automating quoting workflows, our agency is able to quickly meet our customer’s needs, improving the overall customer experience and driving business growth.

  1. Mobile

    Younger consumers expect mobile and self-service applications that enable them to quickly access information and make purchases on their terms. In fact, according to a recent study by Applied Systems, 76% of Millennials and Generation Z believe having access to information and service through a mobile app is very important.

    Mobile enables our agency to provide customers with anytime access to insurance information from their smartphones. It also allows our producers to quickly access and update critical client and prospect information while they are out in the field. Mobility has untethered our agents from a traditional 9-5 office life and created a more fluid work environment that allows for greater production and better customer service.

  1. Cloud

    I wanted to be able to spend more time with my family and have more freedom away from the office, but I was constricted by having an on-site server. Additionally, having an on-site server exposed our agency to the risk of a cyber threat or natural disaster that could potentially destroy all of our company data. We experienced a huge problem when our server went down, leaving us without an agency management system for a week. After that, it was a no-brainer to move to the cloud.

    From cost savings to better data management, the cloud offers our agency an opportunity to operate in a secure and flexible environment that rewards speed and business continuity with profitable results.

Transform and Thrive Today
Since implementing a digital transformation strategy, our agency has seen significant growth. We have written as much new business in the past four months as we did in the previous 12 months.

In today’s insurance market, it’s no longer acceptable to remain un-automated and customers expect mobile and self-service technology. If your agency wants to drive growth and profitability, it’s critical to consider leveraging technology to create a connected experience across the insurance lifecycle. Implementing a digital agency strategy goes hand-in-hand with our core value of being a trusted advisor. Technology isn’t replacing our relationships, it’s enhancing them by allowing us to better serve our customers. Connecting minds and machines will give your agency a more competitive position and enable you to remain viable into the future.

For more information on becoming a digital agency, watch the “Technology for Growth” on-demand webinar.

Trace Meek is the president of Condon-Meek Insurance, a family-owned, independent insurance agency that was founded in 1954 and is located in Clearwater, Florida.

IVANS Index: 2017 Year-End Results for Premium Renewal Rate Change Across the Industry

January 15, 2018

by Matt Foran
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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: Get Ahead of Renewal Pricing for Your Clients.

Year-End Results Show Positive Change Across Nearly All Major Commercial Product Lines
2017 was one of the highest loss periods in commercial insurance, with catastrophic natural disasters driving significant claims and premium rate changes for most carriers in the U.S. Fourth quarter results showed a slight uptick in premium renewal rate change average across Commercial Auto, Business Owner’s Policy, General Liability, and Commercial Property compared to Q3; however, Umbrella and Workers’ Compensation average premium renewal rate change dropped. Worker’s Comp remained in negative territory, making May the only month in 2017 that experienced positive change.

Q4 2017 key findings in premium renewal rate change include:

  • Commercial Auto: 3.11% for the quarter, with a quarter high in November at 3.24% and ending the quarter at its low of 3.00% in December.
  • BOP: 3.85%, increasing over last quarter’s average of 4.79%. BOP premium renewal rate change finished the quarter at 3.79% in December.
  • General Liability: 1.86% quarterly change versus a Q3 average of 1.74%. The low reached 1.66% in November and ended the quarter in December at 2.13%.
  • Commercial Property: 2.91% in Q4 as compared to 2.48% in Q3. The year low and high came back-to-back, with May at 1.46% and June at 2.22%.
  • Umbrella: 1.34% vs. 0.47% in Q3. The year low and high premium renewal rate change occurred in May and August at 0.81% and 1.56% respectively.
  • Workers’ Compensation: -2.32%, down from Q3 average of -1.18%, marking the lowest average of the year.

Umbrella averaged 1.34% in Q4 versus 1.47% in Q3, with a six month average of 1.41%. Premium renewal rate change reached a quarterly high at 1.49% in December and low at 1.19% the month prior.

Workers’ Comp averaged -2.32% in Q4 versus -1.18% in Q3. December marks the lowest premium renewal rate change of the year at -2.92%, with October being the second lowest at -2.24%.

Across all lines of business, December was consistently one of the greatest premium renewal rate change months for the year. Over the past year, the IVANS Index has provided a new view into key movements of the industry on a monthly basis, firmly establishing a new authority for agents and insurers to manage their renewals and pricing models.

Download the complete 2017 year-end IVANS Index report >

Matt Foran, VP and general manager of IVANS Market Appetite, a division of Applied Systems, is responsible for the creation and strategic execution of the cutting edge distribution platform built for the commercial insurance industry. Prior to his current role, Matt was the CEO of EvoSure, which was acquired by Applied Systems in September 2015. Before co-founding EvoSure, Matt was the director of strategy for Zurich Specialty Products, a $2.5 billion business unit of Zurich Insurance Group, where he worked closely with the CEO and Senior Management to set overall strategic direction, develop and execute financial and operational plans, and lead execution of strategic initiatives. Previously, Matt served as assistant vice president of Marsh USA, with responsibilities including the initial formation of the Marsh & McLennan Agency, the Marsh Select Model, the restructuring of Marsh USA, and was a broker for healthcare and Fortune 500 firms. Matt was selected as a Global Rising Star by Reactions Magazine in 2011 and named in Insurance Business America magazine’s Hot 100 list for 2015.

Technology Adoption: Risk or Reward?

January 04, 2018

by Reid French
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The independent agency channel is doing quite well in today’s economy. According to Labor Department Statistics, total employment within the U.S. insurance sector has recovered very nicely since the Great Recession, reaching over 2.6 million jobs. The unemployment rate has also fallen dramatically from a high in 2010 of 8.4% to just 2% today. So everything is great in the insurance industry – revenues are rising, profits are up, more people are employed, and more organizations want to buy an agency or brokerage at higher prices than ever before. So what’s the problem with that picture?

Well, it’s pure and simple economics – success in an industry breeds new entrants. When you have rising revenues, rising profits and improving valuations, new firms will be created to get a piece of that party. And these new firms may not always take the same form as existing providers. The ability to start from scratch provides the freedom to rethink the operation in its entirety.

Over the last few years, we have seen growing interest in our industry by the technology startup community. This interest has grown so much that there is now a word for it: InsurTech. These new firms profess to be here to disrupt the way insurance is bought, sold and serviced, using technology to change the way customers interact with their providers. So what does all this investment in InsurTech mean for our industry? I believe it depends on how each of us reacts to these new firms and the digital transformation of insurance.

Making the case for digital transformation

As a history buff, one thing that I always do is look to the past for guidance. If we examine how other industries have reacted to digital transformation, you will find that, in general, there have been two primary reactions. Existing industries have either ignored digital transformation, most often to their peril, or they have embraced it, most often to great success despite the fear of change. Let’s look at two different examples to examine the impact digital transformation can have on your business’ long-term success.

Uber verses Taxi
As we all know, Uber has taken the world by storm, materially impacting the taxi industry in the process. Over just a two year period, ride sharing services stole 28% of market share from yellow taxis in NYC. This market share trend is well known, but few have discussed Uber’s impact on valuations for the owners of taxis. In NYC, each taxi is licensed through the city via a medallion. The owner of the taxi owns the medallion and can sell it to others or pass it down in his family through perpetuation. In April of last year, a NYC medallion sold for $241,000, down from $1.3 million in 2013. That is an 81% reduction in value in only four years.

This did not have to happen to the taxi industry. They were highly advantaged compared to Uber in the beginning – they had the fleet of cars, the drivers, the customer database, and frankly, regulation on their side. However, they never adopted technology that was available to them to improve the customer experience. How many taxis still – today – don’t take credit cards? How many taxis still – today – have to be ordered via phone instead of an app? It didn’t have to be this way, but the taxi industry did not digitally transform as these tools became available – they allowed others to do it for them.

Financial Institutions
Now let’s shift to discuss an industry that has embraced digital transformation and it’s an industry that is much closer to the world of insurance – financial institutions. In the 1990s, new venture-backed firms began to emerge, utilizing the internet to improve servicing for both banking and wealth management customers. Many thought that these new, online only firms would usher in the beginning of the end for the existing financial institutions. But what happened next is very different than the taxi example.

The banks didn’t sit still – they invested in the same technology that the online banks were based upon. They launched online customer portals and trading platforms. They offered apps to allow customers the choice of skipping the branch to deposit a check or view account balances. The new entrants initially offered something new, but rather quickly, the existing industry matched those innovations. In reality, the incumbent banks actually leapfrogged the FinTech startups by combining new digital tools with their strong branch networks and long history of service. The key difference in the approach of the banks as compared to that of the taxi industry is that they embraced digital transformation, rather than ignored it

So what does all of this mean for the insurance industry?

Most people view InsurTechs as a threat. In fact, according to PwC more than half of global insurers believe that 20% of their revenue is threatened by InsurTech. However, InsurTech is a large opportunity for each of you. The history of digital transformation informs us that those that move swiftly to innovate, to adopt technology, to advance customer experience are the ones that fare the best, that actually enhance revenue growth and profitability. The question now is, will we embrace the digital transformation of insurance or will we ignore it? In order to embrace digital transformation – to future proof your agency – you must become a digital agency.

Being digital agency provides your organization more time to focus on advice and selling, not transaction processing. Each of you are risk advisors, you are here to help your customers mitigate risk, to protect a lifetime of effort and an organization’s most precious assets. If your agency spends all of its time on transactions, you are not focused on the core value of your organization – advice. A recent survey by the Big I indicated that nearly 40% of respondents admitted that they had never done any research prior to purchasing an insurance policy. Your customers need you now more than ever – make sure that your technology supports the time for advice.

Step into the Digital Age

At times, technology investment has been viewed as a risk – it costs money, involves process change, and sometimes it doesn’t work out. In today’s environment, I think that calculus is changing. With the growth of InsurTechs and rising consumer expectations, I would argue that technology inaction is more of a risk than technology adoption. Mark Zuckerberg of Facebook says it best, “The biggest risk, in fact, is not taking any risk. In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” Hedge risk by becoming a digital agency. 

For more insights on how to become a digital agency and move your business into the 21st century, download the 7 Steps to Digital Transformation eBook today.

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.

Top 10 Insights on Digital Technology Adoption

December 21, 2017

by Applied Communications
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Changing insurance marketplace dynamics require you to do more for your business in less time. It’s no longer enough to go un-automated with paper files and manual records. Disparate systems of record cannot support a growing digital agency. That is why agencies must embrace digital technology to simplify and amplify current processes. Technology expands your business’s communication channels – to clients and insurer partners. It mobilizes your staff from their desk to the field. Digital technology elevates your role as a trusted advisor, making you present at all moments of opportunity – anytime, anywhere.

When you think about the core promise of insurance – to safeguard and protect what matters most in people’s lives – it is vital to use digital technology to ensure your agency will be there when your customers need you most. There is significant opportunity and competitive advantage to be had for agencies willing to adopt new technologies and implement digital transformation strategies.

How well are agencies adapting to the digital transformation of insurance?
The latest results from the Applied Digital Agency Survey provide industry-wide benchmarks by which agencies can gauge digital technology adoption and overall industry progression toward digital transformation.

Here are our top 10 takeaways from this year’s report:

More and more agencies are embracing technology to transform their businesses. The average Digital Agency Score this year increased from 42% to 44%. While this finding does indicate slight progress in the adoption of technology, as a whole, the insurance industry is still lagging behind other financial services organizations.

Agencies that use digital technology are experiencing greater monetary return per employee in a number of areas, including, 30% higher revenue when using an integrated management system, 35% higher revenue when hosting software in the cloud, and 40% higher revenue when using a business intelligence tool. Overall, agencies that completely transform into a digital agency experience 144% higher revenue per employee than those that do not. Leveraging technology automates operations so that agents can focus more on selling and serving customers, rather than working on manual, administrative tasks. Focusing more on your customers enables you to create a better customer experience so that you can increase retention, attract new customers and ultimately drive the growth of your business.

Adoption of agency management systems is nearly ubiquitous across the agency channel with a score of 95%. An adoption rate just shy of 100% in both 2016 and 2017 reveals that agencies worldwide understand that the management system is the core of their business operations.  A foundational management system enables you to manage your entire operations – across all roles and all lines of business – within a single application. It automates business operations and creates standardized workflows to increase efficiency and staff productivity.

Among the agencies using a foundational management system, 25% do not have visibility across all departments – P&C, Benefits and Sales – within their systems. To ensure your business capitalizes on each business opportunity and provides the best customer service, it’s critical to have a unified system that provides a comprehensive view of your entire business. Using a single application to manage your entire business, eliminates the need for multiple systems and duplicate data entry so that your staff can be more productive and make better business decisions faster.

Convenient digital services, like eSignature, are also on the rise with a 32% increase in adoption. eSignature offers a quick and seamless way for your business to provide customers the convenient digital service they expect while keeping all workflows within the management system, reducing time and expense spent managing paperwork.

With help from their insurer partners, agencies are going paperless by utilizing download services. eDocs and Messages download was the standout download service this year with an 89% increase in adoption. Download automates the exchange of policy, claims and billing information between you and your insurer partners. The ability to work in one management system versus referencing individual insurer portals allows you to operate more efficiently, provide better customer service and increase business growth.

Mobile customer service remains an opportunity for agents with only 24% currently offering this additional channel of communication to customers. It’s essential for agencies to provide greater flexibility and servicing options to clients and prospects via mobile applications and web portals. Today’s consumers demand anytime, anywhere service and the businesses that don’t provide this risk not surviving long term.

Ubiquitous access to client information – across devices – is becoming mainstream. Yet, only 48% of agencies currently provide mobile access of their management system to staff.  Mobile applications untether agents from the office by providing them with remote access to information and tools within the management system. Being able to conduct business on the go allows staff to be more productive and to take advantage of new opportunities.

Safeguarding what matters most is the core promise of insurance, which is why 72% of agencies rely on the cloud. Hosting the applications in the cloud that your agency uses day in and day out ensures continuous, secure business operations. By leveraging software that is accessible anytime, anywhere and backed up by redundancies, your business is always available to customers – even during a disastrous event that historically would have completely disrupted operations. Additionally, by eliminating the time and expense managing IT systems, more of your staff’s time can be spent selling insurance and servicing customers.

Data insights from management systems remain untapped with only 17% of agencies using a business intelligence tool. Year over year, the adoption of data analytics tools remains virtually unchanged. Regardless of size, revenue or geography, many agencies do not have the advantage of increased visibility and data-driven insights that data analytics tools provide. With more insights into client policy details, preferences and geography, agencies can focus on the most profitable growth areas, build stronger relationships with the most responsive insurer partners, and deliver a higher level of customer service.

Step into the Digital Age
While the independent insurance agency channel has progressed in its adoption of technology, this year’s results indicate that there is still considerable opportunity for agencies to digitally transform their business to provide complete connectivity to staff, insurers and insureds.

Regardless of where your agency ranks compared to your industry peers, understanding the role digital technology plays in delivering on the promise of insurance in a world more connected than ever before is the first step to ensuring your business thrives today, tomorrow and in the years ahead.

To gain more industry insights and to learn how technology can help your business grow, read the 2017 Digital Technology Adoption Benchmarks and Trends.  

Download the full Applied Digital Agency Annual Report >