Connecting the Dots in Agency Technology

To say the agency technology space is robust is an understatement.

Right now, the industry is seeing an “onslaught of technology available to enable agents and brokers to better manage, not only their business, but also their customer base,” says Laird Rixford, CEO of Dallas-based Insurance Technologies Corp. (ITC). There are so many options for agencies today it’s almost too much. “They have all these different options, or the same options, and it’s almost overwhelming.”

The next few years will bring big changes to the agency tech world, adds Ron Berg, executive director at the Agents Council for Technology (ACT).

“There has never been a better time for our distribution channel because of the technology advances that our carriers are making and the investments by the technology vendors. Do we have a long way to go? Yes, but we’re seeing more willingness by independent agents to adopt technology advancements than ever before.”

As more of them are embracing new technologies, agents are working through some challenges and overcoming barriers along the way.

The first challenge is understanding today’s diverse technology landscape and keeping up with current trends. “Find out where the biggest hits or highest value technology implementations are heading and then understand how to get started,” Berg said.

Things like artificial intelligence, chatbots, and more common tools like mobile, e-signature, portals, apps for customers are important to understand. Agencies need to have a balanced view on common best practices and where to go for help, he said. Staying involved with ACT is one way to keep up-to-date, Berg says. “ACT helps by bringing together all the carriers, vendors, agents and brokers, to provide consensus on what the state of the industry is.”

The first thing agencies should do when thinking about the future of agency tech is to keep it simple, said Jason Walker, managing partner at SmartHarbor, a Columbus, Ohio-based digital technology provider for independent insurance agents. “When you hear the buzz phrases like AI or artificial intelligence, or machine learning, let it go,” he said, and then simplify.

“When I talk about artificial intelligence, what we’re looking at and where agencies are moving from a trend perspective is really towards automation,” he said. That’s not exactly artificial intelligence, he said.

“Artificial intelligence is usually something that is programmed to act like a human, whereas automation is more of … ‘Hi, my name’s Jason Walker,’ on a form, and then the form should respond by saying, ‘Hi Jason Walker, I’m X agency, how can I help you?'” This automation tool for “smart forms” is one area that more agencies are implementing today, Walker said. “These tools are more conversational and humanized and give the consumer the feeling that their issue is being treated right now.”

Process automation is a huge focus area for ResourcePro clients, says Andy Niver, vice president, Innovation & Analytics at ResourcePro.

The conversation usually begins with, “‘Hey, I want to automate stuff. How do I think about that?'” he said. “And really for us, when we go and look at these areas with our clients and their business, we really look at it from the perspective of what are they trying to do? What are they trying to achieve? How are they approaching this from an integration perspective into their operations?”

Niver says any business or agency can automate a process, but to be able to do it in a way that makes sense to that particular business is critical.

“It’s not as simple as just going and buying an automation piece of software. You can create a robot, but then the question is how do you trigger the robot?” he said. “You need to have a workflow engine that kind of sits on top of your robot. This workflow engine which says, robot A, go and start working. Robot A comes back, gives me information, now robot B, go and do something,” he said. “All of those different pieces to the puzzle are part of what we work out with our clients to automate and orchestrate within their operations, depending on how that process fits into their workflow.”

Chat-enabled features are becoming more popular on agency websites, too, according to ACT’s Berg.

“I’m seeing agencies become more willing to utilize components of artificial intelligence (AI), such as machine learning for chatbots,” he said. “That’s being used to create enhanced chat capabilities so that potential customers, or policyholders can visit an agency website and either obtain the information they need or be directed to the information they need via a database linked to a chat bot functionality.”

ITC’s Rixford agrees that neural computer learning used in chatbots is beginning to take hold, but most agencies aren’t there yet due to its complexity and oftentimes how difficult it can be to integrate with various agency systems, such as automated marketing platforms, rating systems, agency management systems and document management systems. That integration is a large hurdle for agencies right now, he said.

“All of these different systems need to work together so that then you start developing a singular set of data that can be grabbed by these neuro learning nets and applied to create insights that are applicable to the agency,” Rixford said. ITC makes all of its systems open via Application Programming Interface (API) so that anybody can integrate with their services, with permission, security approval and authentication.

“That’s because we believe that while we might have the best rating system, we might not have the best management system (for a particular agency) and so we give agencies all the tools they need to interact with all of our services, whether it be our management, our marketing and our rating,” he said. That may not be the case in every tech situation.

As agency technology continues to mature, the focus will be on continuing to simplify. That means agencies will operate through multiple mechanisms such as data pre-fill, data services, data analytics, and have interconnected systems, according to Rixford. “This is extremely important; where you will have disparate systems that all work together through back channel APIs and where you can choose the best of breed technology for your agency,” he said. “It’s about finding the right technology that meets the needs of your growing business.” It might be a comparative rater from one company and an agency management system from another company.

Walker agrees that there’s plenty of room for growth when it comes to integration and connectivity among various agency technologies and products. “The challenges lies in the connection between each one of those,” he added.

Beyond integration and connectivity, another challenge is access to the right data.

Any kind of artificial intelligent-based model needs good data to feed it, said Jason Kolb, founder and CEO of DAIS Technology Inc. “I think where agents kind of hurt a little bit more than carriers is just in having access to a lot of the data that you need to feed AI,” he said. But that is changing.

“For example, some of the things that we’re doing is creating some new and unique data points, and then injecting those into agency workflows,” Kolb said. “We’re collecting data from producers, CSRs, and key basic principles on scoring how carriers and their products, their coverage quality, their value-adds, their speed and responsiveness, their pricing … then we’re using that, especially for volume and flow business, to do matching.”

According to Kolb, AI can help produce better recommendations for the placement of business, helping to limit the need to “touch” small commercial accounts or scoring the strength of different applications.

“We see a lot of information contained in an application, a submission, and helping agents and underwriters to understand the strength of the information, the quality of the information in there.” This is where AI can help, he said. “We’ve got some AI doing some interesting scoring based on the characteristics of the exposure data.”

Another barrier to moving forward with AI-driven technologies, which is not unique to the agency side of the industry, is what Kolb referred to as a “push and pull” between technology and people. “Technology really augments people; it doesn’t replace them,” Kolb contends. But employees fear that they will be replaced.

ACT’s Berg believes that while job loss may be a concern, it’s unfounded. “The core value of the independent agent distribution channel is that trusted advisor relationship and that part cannot be automated,” Berg said. “What AI, machine learning and chatbots do is provide more actionable insight, instant service capability to free up the independent agent to provide more superior services.”

The biggest risk for independent agents, Kolb says, is that customer experience is suffering.

“It’s hard for independent agents to keep up with some of the insurance acts out there and a big factor in that is the fact that it’s really difficult to use the data that the agents have,” he said. “They’ve got a lot of really great data, but they also need data from carriers and right now it’s extremely difficult for them to actually put that to use to create new and different customer experiences.”

Kolb hopes to help change that through The Internet of Insurance, a DAIS Technology network of agents, carriers and technology companies that is promising to align incentives between agencies and carriers, allowing partners to both own a stake in and help guide the development of the network.

“What we’re excited about is capturing the knowledge and the expertise of the individuals, whether it’s an underwriter or a CSR or a producer, and then creating a learning system so you can start to progressively automate the low-hanging fruit,” Kolb said. “You see that a lot in the carrier world in terms of progressively automating quotes, especially small premium business, but it’s happening on the agency side as well for processing.”

Agencies have moved processing work from higher cost centers to lower cost centers, such as moving tasks from a producer to a CSR, for example, or from a CSR to an offshore organization. But the next step is to completely automate. “The way that you do that is by observing the interactions and collecting data around how those producers and CSRs work, and then feeding that to an AI so that it can do the work,” he said. That is what’s happening now.

“It’s not a big bang,” Kolb said. “It’s more of an ‘eat the elephant one bite at a time’ type of a thing where you’re taking the highest cost, most time-consuming tasks, and delegating them to an AI, in this case.”

Mike Ansay, CEO of Ansay & Associates in Port Washington, Wis., with more than 300 employees, has taken note of Kolb’s Internet of Insurance.

“It’s a platform strategy which changes dynamically how we do business internally and externally with the customer,” Ansay explained. His organization has been working to bring the product to independent agents.

Ansay says the insurance industry, like many others, is looked upon as a business model that could be disrupted by fintech. “As agency owners, we have the most important thing, and that’s the relationships,” he said. “But how do we remain relevant to a changing technology environment where customer relationships are at the forefront of the relationship?”

Independent agents must address connectivity and integration, he says. “We currently have connectivity in how we conduct business and how we do business, but the ability to be digitized and connect differently is really going to be the next level of opportunity for the independent agent,” Ansay says.

He believes what Kolb has to offer will give the agents different approaches in that connectivity and allow for more value-adds to deliver a better customer experience.

One of the key elements Ansay says the platform will offer agents is single entry to multi-carriers. That’s something that’s been in the works for 35 years, and they have done it, he said.

Ansay says that right now the platform has secured 50 carriers in the process.

“I believe that as more agents join, it will become a two-phased marketplace that will bring value to everybody that is engaged in it,” he said. “It really revolutionizes how we’re going to do business.”

He said so far the Internet of Insurance has partnered with state Big I associations in New York, Wisconsin, Minnesota, Tennessee and Louisiana — with more on the way.