Posted on 16 Mar 10
Back in October, we featured Lisa Parry-Becker and Cyndy Smith who discussed the Real Time Campaign and how the industry -- specifically on the retail-carrier side -- is using standard forms to share and transfer data. In this issue, we spoke with Cal Durland and Angelyn Treutel about how the E&S market and MGAs have begun taking strides to automate interfaces and use standards as well as the benefits of data standardization in this segment. Cal and Angelyn spoke at the Peak Performance Insurance Ski Conference in January, where program administrators, MGAs, wholesalers, and retailers were in attendance.
Annie George (AG): Please provide some background in terms of the E&S market and MGAs and the efforts being made with Real Time and implementing ACORD standards.
Cal Durland (CD): “Back in 1995 the MGAs and E&S market got together with ACORD to talk about ways of becoming more efficient. Yet at that time they didn’t feel real pain so standardization wasn’t a strong enough issue to get behind the effort. More than a decade later, things changed. They saw what was happening on the agency side and with the Real Time campaign and they recognized the communication efforts undertaken to show retailers and carriers the efficiencies available in automating interfaces and in using standard forms. When MGAs began to set up their own websites and asked agents to enter data on these sites, there was real concern. The agents didn’t want to go backwards…they and the carriers had made significant progress in eliminating duplication in data entry and wanted to conduct business in the same way with the MGAs. It made standardization an important issue to be competitive.”
Angelyn Treutel (AT): “Last year AAMGA (American Association of Managing General Agents) and NAPSLO (National Association of Professional Surplus Lines Offices) approached ACT (Agents Council for Technology) about working together to automate interfaces. Everyone had been talking about it individually, but the timing was finally right. In the standard market, agents and carriers were using standardized forms and Real-Time interfaces. However, the Retail Agents and MGAs were still exchanging images which had to be re-keyed into various systems which caused the E&S carriers to be more difficult to do business with which was hurting markets…each partner was seeing there was too much redundancy in data entry. But with a persistent economic downturn, everyone is experiencing decreases in revenue streams and looking for ways to reduce the cost of writing business. 2009 became the year that each of the partners [AAMGA, NAPSLO, ACT and ACORD) came together to try and integrate all of the interfaces through a Joint Initiative, whose goal is to enhance E&S data flow through standards. There is an additional degree of complexity in the program business world, but with the partners working together, solutions are being developed.”
AG: What progress has been made since 2009?
CD: “The progress has been significant. This has been one of the fastest-growing efforts that we have seen in a long time. Just to bring these communities together has been a watershed accomplishment…we get in front of people and they ask, ‘How do we get involved?’”
AT: “We wanted to get people on board right away, and to implement changes in the industry quickly. Our timeline was 12 to 18 months. We determined where we wanted to go and our long-term vision – which is to have a very streamlined automated interface. We subdivided the process into three concurrent work groups so that we could accelerate some of the deliverables. We first worked on the general agency websites because if there are robust websites then it’s easier to facilitate the automated interfaces; also we worked with the retail agency interfaces to encourage the entire industry to use ACORD standards; and the third area of concentration, where we already have some proof of concepts, is specific to automating general agents with all of their back-end systems and carriers and program managers. This is the most complex piece and the most diverse; we are actually beginning to get traction in that area of the effort.”
CD: “From the ACORD Standard perspective, we got people talking about data, how best to gather it and how to make the process more efficient. The goal is to find ways to do things more easily so the time and effort is spent on their business not the paperwork. One example is what’s happening today in Commercial Lines. You have a standard Commercial Lines form with Property and Liability coverages for a building, let’s say. But perhaps the building is vacant. There are additional forms needed above and beyond the standards because of the exposures. We assembled a working group to look at this and ask E&S companies to provide us with their forms so we can see where those additional data fields are, and determine how we can incorporate forms and standardize the data. The goal was to standardize the way the information is gathered and develop standardized forms to make data gathering more accurate, consistent, and efficient. It turned out, these companies are asking [for] the same information but in different ways. So how can we standardize this so that everyone gets the data they need? We are not asking people to change the way they operate, we are looking to get the data in the same way and then people can use it in the way they need to for their individual companies.”
AG: One of the things I find is that in interviewing so many MGAs, program administrators, or E&S companies, when they talk about the benefits of doing business with them, they say how easy it is to complete their on-line applications, get quotes, etc. It’s a big selling point…they are customizing the way in which they ask for this data. How do you get people to embrace standardization, then?
CD: “Similar to what happened with the standards for carriers…they were doing the exact same thing, promoting their websites and their forms until the agents said, ‘I can’t spend hours going to your website, keying in data to get the quotes.’ Some companies were finding they were not getting the opportunity to quote because they were not making it easy for retailers to work with them. The retail agents didn’t want to rekey the data. The same thing is now happening on the E&S side because the retail agents are beginning to see they can work much more efficiently with standards. They are saying, ‘Why should I spend the time to go to your website, learn your workflow when I can transmit data that is already in my agency management system and be more efficient.’ It’s once again about doing business faster and easier and those that make the process better for the agent can get the upper hand. Agents want to write business, not look at websites.”
AT: “From the retail agent’s perspective, because of all the time involved in using different systems, we had become processors instead of salespeople. We had complete departments in our agencies that did nothing but key in information. It was actually easier years ago when we completed one form and faxed it to various carriers. But as each carrier or General Agent built their own website for us to key in data, we had to spend our days feeding their systems. This had to stop, if we were going to make money.”
CD: “It’s almost as if technology made us go backwards. What was thought of as efficiency just because it was online turned out to be a misperception. There is a need to take advantage of all the technologies and have them work together in such things as Download to really see the benefits of technology.”
AT: “Now in our agency with the beauty of using Real Time and the automated interfaces, we no longer have processors. We are one big selling machine in the retail environment.
“The same thing has to happen with the General Agents and the E&S market. We have to work together as partners so we can all be more efficient and have faster turnaround and meet increasing consumer demands.”
AG: Who is adopting the standards and working toward automated interfaces?
AT: We have four pilots able to demonstrate that information can be easily extracted from the retail agency’s system, converted into standard ACORD formats, and electronically passed to MGA systems. There are Proof of Concepts from Appulate, iTC Data Prefill Services, Vertafore, and Insure Zone. We have showcased the pilots throughout the U.S. as working models that can be implemented today by this segment of the market.”
AG: It sounds like you have the vendor side on board.
CD: “Yes, because it’s not new to the vendors…they have been doing this with the retail-carrier data. What is new is the MGA side. What we’re seeing today is that the industry is building on its accomplishments and successes, learning the lessons from the experiences, and applying it to other lines of business.”
AT: “These proofs of concept that we have been demo-ing – moving data from an agency management system into the MGA system – saves ten thousand keystrokes per submission. This approach saves significant amounts of data and time.
“We have a slogan: ‘We are in a war on keystrokes.’ We have to make our industry much more efficient, and this will propel us to gain market share. If we work together we can continue to erode the direct writers’ market share, not just Commercial Lines, not just program business, but Personal Lines as well. It’s a win-win proposition for all of the partners.”
If you would like more information about ACORD, please contact Cal at 845.620.1700, ext. 411 or email her at: firstname.lastname@example.org. If you would like more information on the Retail Agent-E&S Joint Industry Initiative, please contact Angelyn at 228.467.5662 or email her at: email@example.com.
About Carolyn (“Cal”) Durland, CPCU
Cal has worked in the insurance industry since 1980 as a commercial underwriter, a broker and since 1990, at the industry’s non-profit standards development organization, ACORD. In her role as the ACORD Facilitator for AUGIE (ACORD-User Group Information Exchange), Cal works with the various management system user groups, independent agents, carriers and vendors to address technology and workflow opportunities, and to educate the industry on the business value of working with ACORD data standards and forms. Cal is also an advocate for the Real Time campaign (www.getrealtime.org). She received her CPCU designation in 1989 and is a member of the Society of CPCU and Westchester CPCU Chapter Board.
About Angelyn S. Treutel, CPA
Angelyn, CPA, is VP of Treutel Insurance Agency Inc. in Bay Saint Louis, Mississippi. Angelyn is Chair of the Agents Council for Technology (ACT) for the Independent Insurance Agents and Brokers of America, Co-Chair of the Retail Agent to E&S Market Joint Industry Initiative, Past President of the Independent Insurance Agents of Mississippi, and Past Chair of the Technology Committee for the Southern Agents Conference. Angelyn started the InVEST program in the state of Mississippi and teaches Continuing Education classes for ACSR, Accounting, Insurance, and Technology. Angelyn and her husband David run a third-generation retail agency. Treutel Insurance is a Trusted Choice agency and has been selected as a national Best Practices Agency for the past 12 years.