Chubb Standardizes and Automates Producer Appointment Process

In March, the Chubb Group of Insurance Companies ($14 billion in revenue) became one of the first carriers to implement ACORD form No. 817. Pearl River, N.Y.-based ACORD released the form in August 2007 to streamline the standard producer appointment process.

As more carriers follow Chubb's lead, agents no doubt will enjoy increased efficiency in a part of the value chain that had been largely ignored by many carriers up to this point. "This is one area — the licensing appointment compliance area — where the industry has not [paid] a lot of attention from a standardization standpoint," notes Bob Hamburger, vice president of agency services at Chubb.

"While projects targeted at incentive and compensation or commission management have been on the rise, we have seen relatively few to improve the process of managing agent credentials and licensing," adds Gartner (Stamford, Conn.) research vice president Kimberly Harris-Ferrante. "Overall, this process must be improved in order to reduce commission payment errors and licensing costs."

For Warren, N.J.-based Chubb, the driving force behind implementation of the form was support for ease of doing business for the insurer's roughly 5,000 independent agencies, according to the carrier's Hamburger. "Before, we probably had a three-page application that required some arcane processes, such as notarization," he recalls. The new, streamlined ACORD form, Hamburger continues, is only one page long and can be filled out online, with an assist from e-signature technology, simplifying the process considerably.

"Ease of doing business for insurers who have an independent channel is critical," Gartner's Harris-Ferrante stresses. "To continue to drive revenue through those channels, insurers must be easy to do business with, providing online tools and capabilities to allow their agents and brokers to both input information and view their information on demand."

To put things in perspective, Chubb's Hamburger notes, the insurer has a database of nearly 500,000 appointments for Chubb's approximately 5,000 agencies. "So 500,000 times I've had to ask for three pages of information," he explains. "Going forward, we want to ask for just the minimum."

The goal, of course, for an ACORD form is efficiency, not competitive differentiation, adds Hamburger, who also is cochair of ACORD's working group. "What we're talking about [here] is a regulatory and compliance function. It's not really the sales side of the business, even though it is the producer appointment process," he says. "There are certain regulatory or processing functions that we're happy if all the companies are using it. It gets the process done more effectively."

Standard Differentiation

Still, Hamburger points out, there are ways to leverage the use of standardized forms and data sets to improve the business. Over the last six months, for instance, Chubb has integrated the new producer appointment form with its licensing system, compliance system and producer database to streamline large parts of the process, he relates, noting that the new form can be filled out on the carrier's Web platform, @Chubb, a capability Chubb developed along with Sircon (Okemos, Mich.) on the licensing and compliance vendor's Producer Express solution.

"We took it to the next level. We do a direct flow-through to a background investigation company to do the BIs, which carriers are required to do," Hamburger says in describing one of the ways Chubb has leveraged the standardized producer appointment form to automate processes. "We don't even touch [the appointment form] until it comes back from the BI company as either pass or fail."

Going forward, the implementation of forms and data standards such as ACORD's producer appointment form could allow carriers to achieve a new level in automation, Gartner's Harris-Ferrante suggests. "Eventually projects such as this will be end-to-end, incorporating electronic forms with the source systems to eliminate rekeying and improve information accuracy," she says. "It makes perfect sense that forms are integrated with the licensing and appointment systems to streamline the process. Steps will need to be taken, however, to validate the data to ensure that form content are correct."