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Carriers Target Ease of Use, STP to Win Agents' Hearts and Minds

Carriers increasingly are targeting ease of use to win agents' hearts and minds, while also bringing them closer to true straight-through processing (STP).

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It's a pesky thing, that Internet. Sure, it improves our society in profound ways -- better access to information, improved speed of commerce, the proliferation of cute kitten videos -- but for insurance carriers, it also tends to expose shortcomings.

Agents used to accept certain inconveniences, such as frequently reentering data, when dealing with their insurance carrier partners. But now, as they spend more time online, agents expect the same level of service from insurance companies that they receive from the Amazon.coms of the world.

"Their expectations are rising, first of all, because they're online more, both at work and at home," says Craig Weber, SVP of Celent's insurance practice. "Second of all, they're getting better service in various places than they are used to getting from their carriers."

Traditionally, Weber suggests, the insurance industry has not been good at meeting those expectations. "Some of the better ones have [closed the gap], but generally speaking, there is a discipline behind designing the online experience, and that's just not where insurance carriers have focused," he says.

Instead, according to Weber, carriers have focused on compensation as a way to differentiate themselves from competitors in the eyes of agents. "The traditional thinking was to pay the agent as much as you can and as quickly as you can and that will win their hearts and minds," he explains.

That notion is beginning to change, however, as carriers realize that, while compensation is important, it is a fickle competitive differentiator, Weber says. After all, it's fairly easy for a competitor to play catch up when it comes to compensation, he notes, explaining that commission structures are relatively simple to change.

"The real distinction is in the service experience," Weber asserts. "Do [agents] feel like you are taking care of them and recognizing what they need? To me that is a more powerful driver of agent behavior, because it is very hard to imitate a great service experience."

In addition, as carriers become more motivated to improve the user experience for agents, they also are beginning to realize other, often unexpected benefits. In many instances, for example, ease-of-use improvements lead to efficiency gains -- for both the carrier and its agents.

Ready for Takeoff

Aflac ($16.6 billion in total revenue) has viewed agent ease of use as a competitive differentiator since the mid-1990s. The Columbus, Ga.-based company sells supplemental insurance at work group sites through licensed agents.

In 1994 Aflac launched SmartApp, a laptop computer system that allowed its agents to electronically transmit policy applications to the carrier's headquarters, according to CIO Gerald Shields. Developed by a small Atlanta software firm that Aflac acquired and brought in-house, SmartApp featured an electronic signature capability to help bind customers at the point of sale. "We were out on the forefront of [e-signature technology], an early adopter," Shields comments.

Ahead of its time in many ways, SmartApp won a Computerworld Smithsonian Award in 1999 for technology innovation and is now a part of the Smithsonian's permanent information technology research collection. In 2004 Aflac introduced an updated version of the software, SmartApp Next Generation (SNG), with added functionality and a new user interface, Shields notes.

If there is a clear goal behind SmartApp and SNG, it is straight-through processing (STP), or what the carrier calls "jet issuing." Thanks in large part to the SNG system, Aflac currently brings in about 94 percent to 95 percent of its business electronically, and 70 percent of those applications are processed without manual intervention, according to Shields.

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