This is the fifth and conclusive article in our series that began with Four Barriers that Carrier Technology Cannot Fix.
We have already shared ideas for fixing three common barriers to improved growth and profit: 1) not providing a clear, consistent appetite; 2) not offering quick and easy access to knowledgeable underwriters and 3) over-complicating the underwriting decision process.
Today we will discuss the fourth barrier—inconsistent and inefficient transaction processes.
ARE YOUR TRANSACTION PROCESSES EFFICIENT?
Carriers should regularly review their processes with an eye towards increased efficiency and accuracy, both for themselves and for their agents.
Too often, in an abundance of caution, carrier management will add steps to their processes to prevent an uncommon issue from recurring. Those steps become institutionalized along with other, older steps that may no longer be necessary. Over time we forget to question the need for them. Yet each inefficiency adds cost to the carrier and agents and decreases their combined profitability.
More importantly, inefficiencies offer an opportunity for disruption. This disruption is already beginning to occur.
Agency consolidation and networking is giving agents greater power within the insurance value chain. Some of the most successful sales organizations are now able to directly access reinsurers for their best business, cutting out standard PC carriers.
Why wouldn’t this disruption continue to build when many PC carriers offer transaction processes that slow agents down without adding value? For these carriers, inefficient transaction processes represent yet another self-inflicted wound that provides great opportunity for their traditional competitors and new disruptors.
THE VISION
Many carriers continue to rely on transaction processes that take days and weeks to complete.
In contrast, here is a representative comment from an agent who describes the efficiency they can gain from a disruptor.
“When you issue a policy, the declaration is immediately available; you can make a payment immediately; and if you need to process an endorsement, you can do that as well. I don’t want to have to touch it again the next day because I had to wait for the system to update overnight.”
This comment describes a transaction process that allows the agent to start and complete a transaction quickly, accurately, and with minimal back-and-forth interaction.
Research has proven time and again that task-switching can cause businesses to lose up to 40% of an individual’s productivity. When the agent and carrier focus together on a transaction to get it done, both can quickly move on to the next opportunity.
As a bonus, a fast and smooth process makes it easier for the agent to communicate and serve their client, the policyholder.
HOW TO REMOVE BARRIERS TO TRANSACTION PROCESSING
Agents frequently share comments with us regarding common frustrations they experience with carriers’ transaction processes. Based on their observations, we offer the following recommendations.
- Set up the process so agents don’t waste their time quoting business that is not within your appetite. We see many agent comments like this one.
“If the information does not fit the program, immediately kick it out or refer to the carrier underwriter. Don’t let it go thru the system and then come back and say no thank you, we don’t want that type of business.”
- The process should allow for as many steps as possible to be completed at the same time. This is a comment from an agent describing their experience with a carrier that is good at “once & done” processing.
“On-the-spot rating by agent with the ability to post payment, sign app and issue policy in one management system.”
- Keep your billing processes and systems as intuitive and straight forward as possible. Don’t make it hard for people to figure out what they owe you. Make it easy for them to pay. We see many comments from agents about this frustration. Here is an example of what the experience should feel like to the agent.
“Easy to read and access billing information. Ability to pull up copies of the insured’s invoices & billing screens.”
And
“They have immediate dec pages once I do an endorsement. They make it easy to pay a premium and to see what has been paid.”
- Facilitate fast and easy policy changes. Agents say that the best carriers allow them to complete changes immediately or within hours. They also point out that too many carriers still take days, or even weeks. Here are some comments that describe what they want:
“Processing endorsements myself to eliminate wrong info/mis keyed info.”
“Issue endorsements accurately the first time instead of having to send them back multiple times for corrections.”
“Their system is live so you see a change right away and can print new a dec right away and see the change in the billing right away. I wish all carriers were this way.”
Key Take Away
Independent agents are gaining access to systems that make it quick and easy to complete transactions for their clients. Carriers that successfully streamline their own transaction systems will both protect themselves from disruptors and create an opportunity to win more business from their competitors.