When talk of disintermediation was in the air, it seemed as if technology was driving a wedge between independent agents and insurance carriers. Now that the value of the intermediary's role has been reaffirmed, agents are seeing technology as an ally in profitable collaboration with their insurance company partners. However, discrepancies remain between carrier and agent attitudes on the way technology strategies should be executed, according to the Independent Insurance Agents of America's (IIAA, Washington, DC) Future One 2001 Technology Study.
Carriers and agents agree that the Internet can enable greater efficiency by enhancing the ability to interface, according to the study. Agents want to work with carriers that allow producers to write business without dealing with underwriters or other insurance company representatives. And carriers see the potential of technology to enable agents to manage more of the new business process on their own, making for improved personal lines operations, and increased customer service and agent loyalty.
Agents acknowledge their limitations in being able to take full advantage of the Internet, but many also fault what they see as carriers' technological inadequacies, according to Madaleyn Flannagan, vice president of education and research, IIAA. For example, carrier requirements for high-speed Internet connectivity have been somewhat less aggressive than agent expectations. According to the study, fewer than half of carriers will require a minimum T-1 connection by the end of 2003, while 52 percent of agents expect to meet or exceed that speed.
Among the technology issues most likely to lead to changes in carrier/agent relationships, the study cites "perceived level of commitment on a carrier's part, the speed and efficiency with which agents can serve their customers, and the use of systems that can make an agent's job easier or harder, depending on the carrier."
Duplication of Efforts
One of the chief agent complaints, the IIAA study reports, is having to deal with multiple-entry routines on carrier Web sites. "Because of carriers' proprietary systems an agent might have to enter information three or four different times in order to get it to three or four different companies," Flannagan says.
The disintermediation issue aside, carrier-agent relations have suffered from a tendency of technology to drive business decisions, according to Flannagan. "When the new Internet technologies appeared, usually the IT department was making the business plan," she contends.
Another area where both carriers and agents have misunderstood technology is the Internet's relation to the consumer, Flannagan says. "Everyone was thinking it was going to be about buying, but what consumers want is the ability to self-service their accounts," she says.
Carriers must now emphasize out-facing customer services as much as they have pursued inwardly focused carrier/agency services in the past, Flannagan says. Fortunately, agents are increasingly aware of the role of technology in enhancing their relationships with both clients and carriers, and carriers are planning with agents and consumers in mind. "If they stay on the track of working together to provide those functionalities, we'll be very far down the road to making Web-based technologies a very useful tool in service of the independent agency system," she says.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio