Easier Said Than Done

The Internet Age has agents demanding better technology capabilities from insurance companies, but creating a user-friendly online experience has not been among carriers' traditional strengths. To win agents' hearts and minds, insurers increasingly are targeting ease of use.

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.

Aflac considers STP a key component of its ease-of-use strategy, Shields says. "Our goal is to be able to have an associate sit down with an applicant, get that application filled out quickly, get all the necessary information and be able to issue that policy within minutes," he explains.

STP also is a key business driver behind a recent ease-of-use project at Bloomington, Ill.-based Country Financial ($11.3 billion in total assets). This past June the carrier introduced an agent-facing e-application system featuring e-signature technology from Montreal-based Silanis to its multiline, exclusive agency force as part of a larger, ongoing implementation of StoneRiver's (Brookfield, Wis.) LifeSuite automated underwriting platform.

Prior to the rollout, the insurer's financial representatives in the field had to bring stacks of paper applications and questionnaires with them to transact business with clients, acknowledges Wade Harrison, Country Financial's SVP of life/health operations. "That really has been replaced with the LifeSuite software, which now guides them through an interview process with the proposed insured to the point where it directs the entire conversation," he details. "It starts out with the demographic information and the application, then goes on to the medical history. As you go through the medical history section, it continues to ask additional questions to eliminate the need for additional questionnaire documents."

According to Harrison, the carrier rolled out the system in part to eliminate write-backs, instances in which the carrier would need to go back to a potential customer after the initial paperwork has been filled out to request additional information in order to complete the underwriting process. "If we had a missing answer or needed additional clarification on a paper application, that write-back process [would require] us to engage the financial representative and then the client," he says. "Getting that additional information obviously takes time, but it also takes resources on our end and resources on the financial representative's end. We're trying to eliminate that process."

With the new electronic process, write-backs have been significantly reduced, Harrison reports. The Web-based system, he explains, ensures that all necessary questions are answered. If one answer prompts a request for additional information, the system automatically adds the new line of questioning to the process.

Further, Country Financial has enjoyed 15 percent to 20 percent improvements in cycle times, depending on case complexity, Harrison adds. And the carrier expects to build on those numbers significantly as its LifeSuite implementation continues, he relates. In June 2010 Country Financial plans to launch an underwriter workbench system that will allow the carrier to automatically interpret underwriting data, make underwriting decisions and direct workflow, enabling straight-through processing.

Making Business a 'Snap' for Agents

Perhaps no carrier better understands the two extremes of the ease-of-use maturity model than ICW Group. The San Diego-based carrier undoubtedly was frustrating its independent agents as recently as a few years ago, admits VP of workers' compensation Paul Zamora. When he joined the company in 2006, it did not offer any online capabilities around the quoting or submission of new business for workers' comp, he concedes.

"It was a pretty archaic system and not real user-friendly from an agent standpoint," Zamora says. "If they wanted to know what was going on with an account, they either had to e-mail the underwriter or pick up a phone and call."

The situation was so dire that ICW Group ($368 million in 2008 gross written premium) did not have the resources to keep up with the paper applications for new business that had been submitted by e-mail, fax and even regular postal mail. "We didn't have enough manpower to touch it," Zamora recalls. "[Some new business] would sit on a desk. The effective date would come and go and basically we wouldn't quote it - we wouldn't decline it, we wouldn't even review it."

In response, the carrier moved quickly to implement Snap, an online system that agents could use to manage their business and submit applications. Built on FirstBest's (Bedford, Mass.) UMS solution, Snap gives agents access to quote-submission functionality, policy and endorsement documents, account status updates, and other information. "It's really their one-stop shop to access and view their business with ICW Group," Zamora says.

ICW launched Snap in January 2008, following a proof of concept and implementation process that began in March 2007. Compared to the year prior, according to Zamora, the carrier was able to quote 80 percent more business after the Snap implementation.

While the main driver behind the Snap project was the lost business ICW Group experienced because it was unable to quote many applications, the carrier also considered the project to be vital from an agent ease-of-use perspective, Zamora relates. "[Ease of use] needs to be a really high priority," he says. "Some agents are struggling, and the economy isn't helping. With commissions down, agency expense ratios are going up. Any savings you can give them in how they manage their business and how they process their business is going to help them be more successful."

Identifying Snap as an opportunity to better meet agents' growing ease-of-use expectations, ICW Group approached the project with usability in mind. "When we built the technology, we did not want to do what most of our competitors did, which was build a technology solution that just passes the work onto the agent," Zamora explains. "We were very conscious of a situation where, if we created a solution that provided efficiency gains for us, it had to also provide efficiency gains for our customers [agents]. Otherwise, it would only be a win for us, but our agents would not embrace it. In the end it would not be a good value proposition for them."

With that in mind, Zamora says, a pilot test with a small group of agents significantly improved the Snap platform before it went live. The carrier basically let agents in the pilot play with the new software and provide feedback, which led to small but crucial enhancements to how agents could interact with the system, according to Zamora.

The pilot phase may be over, but, Zamora says, ICW still seeks feedback from agents that the carrier often converts into concrete improvements to the system. "All systems are a work in progress. We think we have a really good system, but by no means do we think it's finished and perfect," Zamora relates. "Your best ideas are going to come from your customers and your primary users."

Another Brick in the Wall

That mind-set is shared by Aflac, where recent improvements made to its SNG system have drastically improved a key aspect of the carrier's ease-of-use strategy. Until recently, agents who wanted to use Aflac's applications needed to buy a specific laptop. By the time all of the necessary security and applications were loaded onto it, the computer would cost agents $2,500 to $3,000 out of their own pockets, Aflac's Shields says.

Once purchased, the laptop certainly provided ease of use to agents, but it became apparent to Aflac that the high price tag had become a barrier to adoption for new potential agents, Shields acknowledges. The obvious remedy, he notes, would seem to be a Web-based system that agents could access. But the nature of Aflac's business, he explains, made this a difficult proposition. "The issue is that we go to wherever [the employers] are to do an enrollment," Shields says. "If you're in a rock quarry out in Uncertain, Texas, you just aren't going to get good Web connectivity."

Nonetheless, Aflac decided the benefits outweighed the challenges, and the carrier will roll out SNG to agents via the Web later this year, Shields reports, noting that a Web-based version of the system already is in use in Aflac call centers. To truly solve the Web connectivity issue, though, Aflac has recently launched "SNG via the Hard Drive," an external hard drive that comes packed with the entirety of Aflac's technology. "This, with full functionality, runs our applications," Shields says. "You're able to plug it into any Windows-based PC and you have all the encryption, security, edits, applications and quoting mechanisms."

Aflac refers to the external hard drive as "The Brick." Measuring about four inches long, two-and-a-half inches wide, and a half-inch thick, The Brick connects to an agent's laptop via USB cable and places a client on the computer's desktop.

"It's using VMWare (Palo Alto, Calif.), so we basically take over the image of the PC," details Shields, who names Redmond, Wash.-based Microsoft and Addison, Texas-based security vendor Credant Technologies as key partners on the hard drive project. In the future Aflac intends to work with Topaz, its e-signature vendor, to offer a combination hard drive and e-signature pad in a single form factor to agents, Shields adds.

SNG via the Hard Drive was first offered to the broader agent community in December 2009, according to Shields, who reports that sales of The Brick have taken off. Already 43 percent of agents purchasing a connectivity solution from Aflac choose the external hard drives, which cost just $500, rather than the $3,000 loaded laptop. "The barrier to entry is just removed," Shields says.

The Bricks were first made available to select agents in a trial program last summer. Similarly, both ICW Group and Country Financial conducted lengthy pilot tests with their agents before fully launching their ease-of-use initiatives.

At Country Financial, a group of 130 financial representatives tested the software before the full rollout, according to the carrier's Harrison. Feedback from that pilot helped Country fine-tune the agent-facing LifeSuite capabilities, leading to higher than expected adoption rates of the technology, he says, adding that 45 percent of Country's agency force has tried the system at least once and 40 percent of applications are now submitted electronically, well ahead of the carrier's estimates.

"What we've found is that, with most of our financial representatives, if we can get them to try it once, they continue to use it. It's just a matter of getting the other 55 percent to try it," Harrison says. "Change management is not something we've taken lightly. We've said all along that if we built the greatest system in the world and nobody used it, then it wouldn't have any value."

ICW Group also recognizes the importance of engaging agents and helping drive adoption of its improved agent environment. "Behavioral change is not something you can underestimate," ICW Group's Zamora relates. "There are a lot of folks out there who have been doing the same thing over and over again for the last several years. Even though this is a better workflow, it's still different."

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See related articles on pages 25 and 26.