For years, the likelihood of true, real-time transactional interface in the independent agency system seemed for many to be, well, unreal. But that's all changed. Agency management system vendors are offering ways agents and brokers can communicate in real time with insurance carriers -- internally or using third-party services. Other technology vendors are developing and delivering services that drive real-time transactions. And carriers increasingly are implementing standards, such as ACORD XML, that form the foundation of real-time functionality.
But perhaps the greatest driver of change and improvement in the independent agency system distribution network is the network itself. For the past several years, independent agents and brokers have been working together, and with ACORD and others in the insurance value chain, to move the industry toward real-time interface.
Key to the success achieved so far has been this high degree of collaboration between agents and brokers, carriers, vendors, ACORD and other industry organizations. Such cooperation has allowed what otherwise might have been roadblocks to be transformed into bumps along the way. For instance, the industry has seen progress in transmitting information from agencies to carriers, using carrier Web sites, directly from agency management systems or via third-party services. But moving information from carriers to agencies, while occurring in growing numbers, has proven more troublesome.
For instance, when download of commercial policy information from carriers to agencies was first attempted, data inconsistencies led many agents and brokers simply to abandon the functionality. But others refused to walk away. They analyzed the data, worked with carriers and vendors, and performed more tests. They banded together as a working group of ACT (Agents Council for Technology), identified where problems were, worked with ACORD to drive standards development and refinement, and recently published a comprehensive set of guidelines and certification advice for carriers, agencies and vendors looking to capitalize on commercial download. Now, agents and brokers who are active in AUGIE (ACORD-User Groups Information Exchange) are taking this important issue to a new level, and will drive education and awareness efforts among management system user groups and others in the industry.
That's just one step in the move toward real-time transactions. But it is a critical one. And it's one that, if ignored, could have hindered further progress. Many other examples exist. The point is, by working collaboratively, the distribution system has brought itself to the verge of a breakthrough -- seeing broad implementation of real-time functionality throughout the industry. The convergence of ACORD standards, supportive technology and responsive partners is starting to deliver on the vision of real-time working for agents and brokers.
At this year's ACORD LOMA Insurance Systems Forum, for instance, speakers at one session outlined how a carrier is implementing real-time application-to-issue functionality for agents and brokers, beginning and ending at the agency management system. The ACORD XML-based process allows for error correction and data completion through a real-time, interactive, conversation between the carrier and the agency, right from the agency management system. The session looked at how such deployment of ACORD standards paves the way for broader implementation of seamless transactions and realization of further efficiency gains throughout the distribution system, and the entire insurance value chain.
Those wishing to build on these successes need not go it alone. For instance, at another session, participants learned about other ways technology is bringing agents and carriers increased production, greater efficiency, reduced expenses and improved customer service. Presenters shared how a focus on function -- for instance, offering real-time billing or policy inquiry -- rather than choosing one vendor over another, would deliver results more quickly. Plus, they learned that such a focus can make planning and prioritizing distribution-centered technology initiatives much easier.
Agents and brokers have committed to continue working with carriers, vendors, ACORD and other associations to drive technology developments that streamline and improve workflows and strengthen the distribution system. ACT and AUGIE, for instance, have several initiatives under way, such as helping carriers and vendors better understand what is important to agents, working to ensure broad participation and implementation of ACORD standards, and communicating back to agents and brokers how carriers and vendors are responding. Projects are as narrow as standardizing mixed-case download -- a move that will bring benefits to agents and brokers as they seek to reuse customer data in sales and marketing efforts. And they're as broad and pervasive as security, privacy and confidentiality of customer data, and how to ensure compliance while at the same time minimizing disruption to agency processes.
These groups and their initiatives in support of real-time processes hold tremendous promise for delivering greater efficiency throughout the entire distribution system. As they succeed in mobilizing fellow agents and brokers and fostering greater cooperation and collaboration among vendors, carriers and associations, they will ensure that real-time functionality is, indeed, a reality.
Based in New York, ACORD (Association for Cooperative Operations Research and Development) is a global, nonprofit insurance association whose mission is to facilitate the development and use of standards for the insurance, reinsurance and related financial services industries.