INSURANCE, TECHNOLOGY, AND MORE
How to Make Your Insurance Agency a Great Place to Work
Insurance Journal recently released the winners of “America’s Best Independent Agencies to Work For,” and Watkins Insurance Group is proud and excited to have been selected as the South Central winner. We attribute this award to our culture of mutual respect and an enjoyable workplace, but we also realize that streamlining our processes through technology makes our employees’ jobs easier.
Fostering a Culture of Openness
For us, it’s all about a culture of openness so that everyone feels like part of the team. The offices of our partners and managers are always open, fostering a feeling of togetherness. Annual surveys keep the flow of feedback from staff to partners and managers going strong. This creates a sense of team unity at Watkins, which everyone appreciates. We all work together to make this the best workplace possible.
Remembering to Have Fun
We also make it a point to have fun and reward our employees for the hard work they put in throughout the year. From an annual Halloween cookout complete with costume contests to our festive holiday party, we are always trying to find ways to have fun here. These things come at a cost, but for us, the relationships we build with our staff are priceless and well worth it.
Making Jobs Easier Through Technology
Our focus on technology is not only instrumental to employee satisfaction but also to overall business success. We leverage technology to automate and manage day-to-day operations. With multiple Watkins locations, our agency management system, Applied TAM, centralizes our customer information database. Our employees love the real-time communication capability, which is now our standard for communicating with carriers.
We use Applied CSR24 to provide access to policy information, anytime and anywhere, which our customers have come to expect. The same technology that supports customers’ on-demand access offers a similar benefit to employees who may need remote access. Our employees feel confident knowing the technology in place supports them and fosters a sense of pride with providing our customers solutions that enable them to access insurance information how and when they want it.
Technology is imperative to our agency running smoothly and successfully. But our success is also derived from the innovative culture and positive work environment we have worked hard to develop at Watkins.
Join the conversation – how is your company leveraging technology to boost employee satisfaction and improve business operations?
Hanna Ogle, CIC and CRM, joined Watkins Insurance Group in 2005 as the Personal Lines Manager in the Austin office and has since expanded her role to include Director of Agency Automation. She is a Summa Cum Laude graduate of St. Edwards University in Austin where she obtained a bachelor’s degree in Organizational Communications. In addition, Ogle is a graduate of Hawaii Pacific University with an associate degree in Business Management. She has served on agent advisory councils for various insurance companies and other industry-related organizations. Find out more about Watkins Insurance Group at www.watkinsinsurancegroup.com.
New Opportunities for UK Insurance Brokers
Forces Reshaping the Industry
Technology continues to change our industry, reshaping the ways brokers conduct business and creating new opportunities for growth and enhanced service to customers. More than ever, embracing technology and leveraging the benefits it delivers are critical to achieving these goals.
Customers increasingly conduct business online, meaning brokers should seek opportunities to meet customers and prospects in the digital world where they are now regularly accustomed to interacting with businesses. In this dynamic marketplace, insurance businesses continually need to assess changing customer demands and align business priorities accordingly, leveraging technology as a means to reach them while driving business efficiency.
A Natural Extension of Their Business
For many years, Insurecom, now operating as Applied Systems UK, has been a valuable partner to UK insurance brokers, and we see tremendous opportunity in Applied Systems’ acquisition of Insurecom last week. Applied Systems is a leading insurance software company and provides the Applied TAM UK system many UK brokers use to automate their brokerages. As longtime partners, the combination of Applied Systems and Insurecom is a natural extension of their businesses.
Increased Support for UK Brokers
The acquisition will increase the support delivered to UK brokers, enabling us to automate more aspects of insurance business as Applied Systems delivers new products and innovation to the industry for efficient brokerage management, customer self-service, mobility and insurer connectivity. It creates new opportunities to increase revenue and, more importantly, to build stronger relationships with customers, allowing them to deliver more to those they serve. There will be much more to learn about this at the upcoming Team-One conference this October 14 in London. To ensure a strong future for brokers, I welcome Applied to our marketplace.
John Haber-Smith is a chartered insurance broker and Director at John Ansell & Partners Ltd – a specialist commercial insurance brokerage. He was the former chairman of Team-One (the Applied Systems UK user group) and plays an active role in ASCnet. He is a well-known and well-respected member of the insurance community.
Insurance Agency Best Practices to Enhance Value and Growth
Two key factors contribute to an insurance agency’s long-term success and value: organic growth and profitability. Organic growth refers to the rate in which an agency grows its revenue through expanded sales efforts rather than the acquisition of existing revenue from another agency or agent. The second key factor, profitability, is the measure of an agency’s true financial viability. If an agency isn’t turning a profit, it’s unlikely to hold significant long term value.
So, how do you take your agency’s organic growth and profitability rates and figure out how you stack up in the industry? Below are insurance agency best practices and key performance benchmarks that indicate if your agency is headed towards long-term success.
Performance Benchmarking: Critical for Improving Operations
The Independent Insurance Agents & Brokers of America (IIABA) provides a best practices study to assist agencies in comparing their performance against the leading U.S. agencies. Performance benchmarks include focusing on measurements that are specific to increasing an agency’s value, such as stronger operations or making an agency more attractive to potential buyers. As a result, there are a variety of benchmarking tools that measure agency value and its performance, including organic growth rate, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) margin, and productivity based on revenue per employee.
The Rule of 20
An extremely useful benchmark is the “Rule of 20,” a simple tool to determine if an agency is creating value for its shareholders. Generally speaking, an outcome of 20 or more, regardless of the different combinations of growth and profitability, indicates that the agency’s shareholders can expect to earn 15-17 percent per year through stock appreciation and/or profit distributions.
Beyond the Rule of 20, other helpful benchmarks involve measuring risk, productivity and financial management. A risk benchmark, for example, would factor in an agency’s diversification. If a company’s revenue is exclusively with one carrier, it is considered high risk. It is also considered high risk if all agency clients are within a particular industry or, worse, if the majority of revenues come from one key client.
Understanding your agency’s performance and management as compared to your competitors, both financially and operationally, is essential to its vitality.
If an agency’s resources are ineffectively managed, the agency most likely will suffer eventually, regardless of the current growth and profitability. Effective management will lead to long-term success and, ultimately, increased value.
To learn more on best practices for enhancing agency value and to hear from Shirley Lukens of Reagan Consulting, watch the “Agency Best Practices” webinar on demand.
What performance benchmarks is your agency measuring, and how have they contributed to your agency’s success?
Shirley Lukens is a principal and senior consultant at Reagan Consulting. She is responsible for researching and developing various industry studies including the annual Best Practices Study, a joint project of Reagan and the Independent Insurance Agents & Brokers of America (IIABA), a national trade association, in which she served for 12 years before joining Reagan in 1998. As VP of Industry Affairs for IIABA, Shirley conceived and launched its highly regarded Best Practices initiative, and was responsible for all its performance enhancement programs, products, and services. Shirley is a frequent contributor to insurance industry publications, and a popular leader of Best Practices workshops at agencies, industry meetings and conventions.
Gaining Success Through Specialization
The insurance industry is changing rapidly. Insurance organizations face competitive pressures, market demands and government regulations. Insureds are more sophisticated and informed than ever before.
Given these trends, the natural inclination for insurance agencies may be to become generalists and ensure that agents have broad expertise in every type of product and coverage. However, that may not be the best course of action.
On the contrary, the most successful insurance organizations of the future will likely be those that choose to specialize. Through specialization, an insurance agency can differentiate itself from competitors by providing in-depth and unparalleled expertise in one particular area — essentially dominating that niche.
In essence, specialization means an agency develops a practice area comprised of agents with in-depth knowledge of an industry, business or personal lines. Agencies can then take a position of thought leadership, thereby offering information and insights to their clients.
At Hylant Group, we maintain a team of generalists, as well as specialized resources, including agents with a specific area of expertise. Our specialization is broken down by specific client industries — manufacturing, financial or legal services, for example — or by having agents focus on certain business lines, such as aviation, executive risk or environment.
Here are four key steps to becoming a more specialized insurance organization:
#1: Identify the focus area(s)
Determine which areas to specialize in by evaluating the agency’s portfolio. For example, an agency with many healthcare industry clients might choose to specialize in medical malpractice. If an agency has a wealth of knowledge in this area and a large portfolio of clients in the industry, it is likely in a strong competitive position to hone that area of expertise. A critical factor, however, is ensuring that the agency and its agents are passionate and knowledgeable about their areas of specialization.
#2: Become an expert
Next, immerse the agency and specialized agents within the focus areas. Encourage and invest in continuing education for agents in their area of specialization. Ways to do this including tapping into resources of carriers such as educational tools and product knowledge, along with industry resources such as risk assessment tools.
#3: Manage change
Managing change can be challenging because it may entail forgoing revenue from previously core business lines in order to focus on building a book of business around the specialization areas you have identified as growth areas for your agency. However, embracing change and helping employees understand and manage it is essential to making specialization work.
#4: Embrace technology
Technology is instrumental to supporting agency processes. Content management systems can be instrumental in helping agencies keep clients updated on changing laws and regulations in their specialized areas. Cloud technology, robust web sites and management systems integrated with self-service tools can be leveraged to break geographic barriers, reach customers across time zones, and serve as a source of information – any time of the day.
To learn more about specialization and hear additional tips from Scott Lindsey, sign up for the webinar, “Gaining Success Through Specialization,” which takes place July 19 at 11 a.m. ET.
How does or could your agency use specialization to differentiate or maintain a competitive advantage?
Scott Lindsey is chief technology officer at Hylant Group, a full-service insurance brokerage with 14 offices in Ohio, Michigan, Illinois, Indiana, Tennessee, and Florida. As a member of the Worldwide Broker Network, Hylant offers complete risk management services, employee benefits consultation, loss control, healthcare management and insurance solutions for businesses and individuals. Hylant is one of the largest privately held brokerage firms in the United States and serves a wide variety of clients locally, nationally, and internationally.
3 Technology Best Practices for Agency Business Continuity Planning
The 2013 hurricane season is expected to produce “more and stronger hurricanes” than even the active 2012 season, according to a report from the National Oceanic and Atmospheric Administration.
The increased prevalence of natural disasters such as 2012’s Hurricane Sandy and the recent tornadoes in Oklahoma carries with it potentially devastating effects on insurance agencies that aren’t prepared for them. It’s an agency’s job, after all, to provide connectivity, continuous service and the quick dispatch of information when its customers experience a natural or man-made crisis.
How Your Agency Can Prepare
Agencies can prepare themselves for a crisis event or natural disaster by creating a business continuity plan (BCP). A BCP lays out planning considerations, protocols and procedures for potentially crippling events to help ensure a business, such as an agency, can continue to run smoothly, protect its revenue stream and respond to customers, most importantly.
Having the right technology in place is key to ensuring an agency stays viable after a disaster. Here are three best practices for incorporating technology into a BCP and protecting some of your most valuable assets: reputation, customer loyalty and data.
1. Leverage Cloud Computing
Cloud computing, running applications through the Internet rather than on-premise company servers or computer, allows an agency and agents to quickly and easily access applications and business data using Internet-enabled devices. This ultimately enables an agent to interact and serve customers regardless of time and place, ensuring better customer support, including during and after a crisis.
2. Integrate Social Media into Disaster-Related Communications
Using social media sites such as Twitter and Facebook allows organizations to provide information and updates to employees and customers faster than traditional channels. Studies have found that social media usage rises during and immediately after disasters as people seek timely information. Insurance agencies should take advantage of the efficiency, collaborative nature, and the unparalleled reach of social media to effectively communicate during a disruptive event.
3. Utilize Mobility to Broaden Reach
Combining mobile with cloud-based solutions creates an optimal platform for quick data access and provides agencies with increased operational flexibility. Mobility offers a communication channel when others may not be accessible, allowing agents to conduct business from anywhere and it provides customers with greater access to resources when they need it most. According to a recent American Red Cross survey, mobile apps and social media are popular sources for information during a disaster.
Find out how McMahon Agency in Ocean City, New Jersey used technology to remain operational during Super Storm Sandy. Watch this video and then register for the webinar, “Technology for Disaster Preparedness,” to hear Michael McMahon discuss his experience in person.
How is your agency leveraging technology to prepare for the unexpected, protect valuable company assets, and ensure your agency is available when your customers need you most?
Greg Shiple, AIS, is vice president of Customer Support for Applied Systems. Shiple began his Applied career as a programmer in 1986. In the early ’90s, he was among the developers responsible for products including fax@vantage®, ConneXion®, PocketTAM® and Vision Custom Forms. Shiple helped develop and promote brokerage-carrier communication through WARP technologies, which formed the basis for IVANS® Transformation Station.
Taking a Closer Look at Your Client’s Risk Control Initiatives
As the P&C market changes and begins to harden in the next few years like many industry publications and sources have reported, why not take a closer look at your client’s risk control initiatives now before they become an underwriter’s recommendation during your upcoming renewal discussions? In fact, carriers have already implemented higher underwriting standards in many cases.
Promoting Risk Control Priorities and Initiatives
As someone who made the transition from an insurance buyer to a commercial retail broker during the last hard market, I experienced firsthand that one of the most influential approaches you can take to sell a client’s risk to an underwriter is to show them what you are doing to minimize the probability of claims by promoting a company’s approach to its risk control priorities and initiatives. A few ways you can accomplish this are:
- Providing copies and details of loss control plans to underwriters in your P&C submissions
- Introducing your client to underwriters to discuss claims and what you and your client are doing to reduce frequency and severity issues prior to renewal discussions
- Recommending new risk management processes and tools that reduce your client’s total cost of risk
Focus to General Liability Underwriting
Of course, GL is the insurance policy that your clients purchase during the annual renewal process to transfer a portion of third-party financial or vendor risk to an insurance carrier. Using a risk control tool that efficiently tracks vendor contracts and the specifics of their insurance programs as well as indemnification provisions is a great way to proactively minimize third-party risk in this area. Promoting the results of this tracking process via automated compliance reporting, which is shared with your underwriters, is key to obtaining the best possible GL placement outcomes.
What are you doing to help your clients manage risk and understand their true exposures? Leave a comment and use the social buttons to “share” this post with your peers.
Justin Gregory is Applied Systems’ resident risk manager and lead Applied certTrax sales professional. With more than a decade of corporate risk management and insurance brokerage experience, Gregory has tracked certificates of insurance directly and indirectly across multiple industries.
Western Financial Group Powers Growth with Applied Epic
Changing Consumer Expectations
In Canada, as most everywhere else, brands like Apple, Tim Horton’s and so many others are changing the way consumers expect to do business. Yet the insurance broker model in some cases has lagged behind in meeting these new expectations. Customers want to interact with businesses, including insurance brokers, through multiple channels, and not just traditional ones.
A couple of weeks ago, I spoke at length at the National Club in Toronto about Western Financial Group’s decision to adopt Applied Epic, a software platform that will enable us to realize greater business productivity, increased profitability and enhanced customer service.
New technology, specifically a broker management system, will be the single most important thing we do going forward at Western. Our 120+ offices across western Canada demand one scalable system, which is critical to our rapid growth trajectory. Our rigorous selection process, which included on-site visits, user-acceptance testing and a criteria list with hundreds of items, led us to Applied Epic.
Establishing a long-term platform for sustainable growth. By the end of 2013, Applied Epic will be in up to 120 branches, where one broker management system will automate workflows, mitigate risk, offer digital self-service to customers, and enable us to drive sustainable growth and profitability. Applied Epic offers us the flexibility to leverage technology evolutions such as mobility through one powerful broker management system.
A software system alone is not going to catapult any company in front of its competition. Rather, it provides a foundation for success and growth.
To learn more about why Western Financial Group chose Applied Epic, watch this video.
How is your business using technology to drive growth? Join the conversation and share your thoughts in the comment section below.
Jeff Burke is President and CEO of Western Financial Group (Network) Inc., the largest property and casualty brokerage in western Canada. It provides property, liability and life insurance as well as banking and investment services for more than 600,000 customers.
The Transforming Agency Model
Virtual Business Drivers of Change
While traditional businesses and retail storefronts are a mainstay in communities across the country, virtual insurance agencies devoid of any physical location at all are capable of serving customers from anywhere in the world. As a technology consultant to insurance agencies, this is a fascinating trend based on key drivers in the changing landscape of insurance business.
Virtual agencies thrive on two drivers that underlie the need for insurance agencies to change the way they do business:
Driver 1: Mobility
Consumers flash their phones to board planes, buy coffees, and everything in between. Mobile device adoption is skyrocketing, and consumers expect to be able to carry out any type of business transaction using one. As of June 2012, nearly 55 percent of mobile subscribers owned smartphones.1 And that’s not including consumers who connect via laptop or tablet.
- Agents must provide mobile customer service options to the connected consumer.
- Agencies must make it possible for staff to conduct business in the field via mobile web-enabled devices.
Driver 2: Talent Acquisition
Increased mobility means telecommuters have reached unprecedented numbers. By the time approximately 50% of current agency staff retire over the next 10 years2, will the next generation of talent be willing to work in a conventional office? Attracting the best talent will increasingly require offering flexibility.
Implication: Two potential models
- Agencies can extend the physical office and increase staff’s mobile capability with devices and telecommuting options.
- Companies can establish a virtual agency built on a staff of telecommuters.
What do you think about virtual business? Is your agency moving in this direction?
To learn more about this topic, watch this webinar I participated in on April 19, 2013 titled, “The Virtual Agent: Transforming the Traditional Agency Model.”
Steve Anderson is the president of Anderson Network, an insurance agency consulting firm and executive editor of The Anderson Agency Report (TAAR). He can be reached at steve [at] taareport.com.
1“Two Thirds of New Mobile Buyers Now Opting for Smart Phones.” Nielsen Newswire. Nielsen.com. 12 July 2012. Web. 12 April 2013.
2“2012 Agency Universe Study.” Conducted by Big “I” and Future One. Independentagent.com. Web. 12 April 2013.
Is your agency using download as much as it should?
Download has become so prevalent in insurance agency operations, its value is often overlooked. Most agencies would have difficulty surviving in today’s market without it because it saves staff a tremendous amount of time from having to re-enter basic data and protects agencies from errors and omissions (E&O) risk.
Download is the process in which carriers and wholesalers transmit transactional data from their systems to agencies’ management systems for automatic data synchronization and updating. The major forms of download include policy, billing, claims and activity transactions occurring within the carrier or wholesaler systems.
Many have taken advantage of the efficiencies of personal lines download. The cost of manually entering all of that data, and the potential exposure to E&O if there is an error, is simply too high. Yet, it is puzzling why more agencies aren’t taking advantage of commercial lines download, claims download and direct bill commission download. The benefits should be too big to ignore.
Doing away with manual data entry
Agencies would have a difficult time remaining profitable today if they had to pay staff to manually enter all personal lines policy changes that occur each day. Yet, that is what many agencies do with commercial lines policies, claims, billing and other carrier transactions. It’s unnecessary.
Each agency should evaluate all download capabilities offered by their carriers and develop a plan for enabling receipt of all download options (See a list of download capabilities offered by carriers through Applied Systems software solutions here).
Better, more accurate customer service
The data residing in the agency policy, claims and billing databases serves as the starting point for most customer service functions, as well as the basis for additional transactions. Data downloaded from carriers:
- Is the basis for Auto ID cards, certificates of insurance, summaries of insurance, and helps the agency perform general inquiries from the customer.
- Is also the basis for additional transactions, such as endorsements, renewals and First Notice of Loss.
- Generates automated billing transactions, which in turn create automated producer payable reports. Many agencies pay staff to manually calculate producer payables. Using download accurately could eliminate this costly step.
Reduce E&O exposure
Carrier download comes directly from the carrier systems that issued the policy, endorsement, claim or billing. There is no more accurate version of the data. It makes sense to have the most accurate data being used to update your agency’s customer servicing tools.
Accurate, seamless data feeds to external applications
Having accurate and seamlessly updated data is certainly important when it is just the agency staff accessing policies, claims and billing records. However, today, agencies’ databases are being used to drive other applications.
More and more agencies are extending their agency to the web, providing their customers with 24/7 access to their account information.
Mobility is offering agencies opportunities to be more productive. Producers have embraced tablets and mobile applications because they can get more done while out in the field. Implementing download functionality ensures current, accurate information is available to them.
In these applications, having data that is accurate and seamlessly updated via carrier download, without human intervention is an absolute must.
So where does your agency stand with download? Are you leveraging every possible carrier download?