Internet & E-Commerce
THE PATH in Insurance!
Pat Borowski, DVP, email@example.com
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- Agents are & will be a major marketing force
- Agents are & will use Internet/IP technologies
- Agents REQUIRE seamless business processing platforms for
the portfolio in P&C, L&H, FS, Bkg., & others in
retail & wholesale markets
- Of: PIA, agents, carriers, regulators, vendors & others
- Market & business realities
- Required & evolving functionality
- Strategies, tactics, process, products
- REAL business processing & behaviors
PIA - as a trade business
- Demonstrating through applied use
- all of the previous
- diversity of service options
- medium progression
- joint planning
Technology 2000 Means
- AGENCY SUCCESS THROUGH:
- COMPETITIVE DIFFERENCIATION,
- COMPREHENSIVE PLANNING,
- SMART PURCHASES, and
- EFFECTIVE DEPLOYMENT.
Agencies MUST Evaluate
- Their insurance partners AND vendors
- based upon their contribution to or detraction from
- the integrated agency plan!
- MORE than agency vendor system
Agency Technology MUST
- Provide a competitive platform
- Meet agencys full business needs
- Accept/support multiple options
- Work for carrier & client requirements
- Full function
Agency Owner MUST
- Understand the function possibilities of THIS technology
- how those can serve the agencys needs,
- and in a NON-Insurance centric way!
- Will not make you a success. But it IS the platform to success.
- Is the price to stay and play in the game.
- Is similarly challenging ALL your clients.
- Is bigger than the insurance industrys definition of
or experience with it.
- SEMCI - "S" is NOT SAME
- "S" = SINGLE
- The speed and variety of technology will be used in VARIOUS
ways by insurance entities to manage the pressures of the insurance
- Independent Agencies MUST be positioned to accept many approaches.
The best competitive event for independent agents!
It is unavoidable and demands new technology investment of
Agencies purchases to respond to Y2K include the foundations
for broad Internet Protocols usage.
Recommending a Strategy
Ideas for Today and Tomorrow
- Internet/Web technology is the virtual extension of all your
- You didnt create current agency overnight, so neither
will you do so with Internet/web initiative (1)
Recommending a Strategy
- Through "IP" agencies can:
- execute ANY kind of marketing method, service and/or expert
- to ANY segment of consumers/clients
- for ALL types of products from many providers
- AND tailor method to the customer need and request.
- Agency competitive difference for success
- Made real by deliverable agency value to clients & carriers.
- Detailed by the required agency operational behaviors &
- THEN translate how & what is supported &/or affected
by Internet/web-based functions. (4)
- HAS TO BE an integrated whole
- What you are (will be) & how you do that - as an agency.
- It is 1 vision
- executed in part by technology &
- compatible/integrated with ALL agency operational behaviors/procedures.(5)
- In 1st quarter of 1997 PIA-CCEO surveyed 2000 PIA members
- In January of 1998 PIA-CCEO surveyed 230 PIA Leadership
- Both results also compared to previous PIA survey results
- 1997 - past 3-year performance:
- 58% net earnings growth, but at lower rates than in previous
- 29% holding steady
- both groups report:
- growth in new and current client portfolios
- increased expense
- downward adjustments made to their bonus agreements
- In 1998 #1 challenge noted by agents was maintaining appropriate
- Expense to gross earnings ratios
- Gross earnings to premium dollars
- Capital outlays to gross earnings
- Future investments to gross earnings
- Net Profit to net earnings
- Contemporary data from various member sources indicate:
- Potential improvement in net earnings across agencies.
- Competition for agencies resulting in signing bonuses and
improved profit sharing incentives.
- Writings are increasing, as well.
- 1998 - was the #2 challenge noted
- stability of markets & offered products
- product/pricing responsiveness
- 1997 - large majority of agents reported
- growth in new & current clients
- market stability of carriers as good
- price/product of carriers as OK
Concerning Other Products:
L&H and Financial Services
- 1985 = 15% sell it 25% interest level
- 1995 = 25% sell it 40% interest level
- 1997 = 38% sell it 87% interest level
- 1997 = 97% report that more clients are asking them about
- 1998 = 91% report will expand into these lines over the next
- 1998 - listed as the #3 leading challenge for agents
- training, recruiting, compensation
- 1997 - all report staff expense is up
- staff expense highest when adding new lines & technology
- In 1995:
- 12% have E-mail among PIA leadership
- In 1997:
- 12% experimenting with websites among membership.
- 70% recognize Internet/WWW is a needed tool among membership.
- In 1998:
- 86% have E-mail among PIA leadership.
PIA Year 2000 Agent
Surveys, June 1998
- Only 60% have received Y2K information from of their companies.
- These agents have only heard from 2.5 of their 5-7 appointed
- 90% of that information is general in nature.
- Most agents have not received carrier notice of Y2K compliance
PIA Members on Agent-Company
- 1987 = 64% reported unsatisfactory
- 1992 = ALL report affected by 2 or more adverse company actions.
- 1997 = 77% overall rate carrier performance good to OK.
- 1998 = All report good opportunity to discuss and work out
issues with their carriers.
Leading Carrier Concerns:
1998 PIA-CCEO Survey
- Competitiveness & growth.
- Sustaining needed earning levels.
- Internal expenses.
- Expertise ( to include agencies).
- View & measures of Wall Street.
ACORD and XML: The Guide
& The Path
Agency-Company Organization for Research
One Blue Hill Plaza, 15th Floor
P. O. Box 1529
Pearl River, NY 10965-8829
Phone: (914) 620-1700 or (800) 444-3341
Fax: (914) 620-0808
January 2000 issue Professional Insurance Agent Magazine
Industry Watch Column Carl Gaspar (NBD CO) chairman
PIA National Business Technology Committee and ACORD Board member.
Many carriers early on understood the benefits that Internet
offered insurance processing. Internet protocols are more flexible
and better able to interface with many more dissimilar systems
and all at substantially reduced costs. Attention and resource
commitment to ready for Y2K greatly tempered the full Internet
launch efforts of these carriers.
As Y2K projects concluded agents began seeing more of their
carriers moving towards some form of Internet transactional interface
with them. Whether for the upload side of a new policy transaction
or up-to-the-minute claims status, Internet/web-browser applications
are here. Rather than have every company, once again, invent their
own approaches with carrier-unique screens, ACORD has stepped
The new standard is called XML. Unlike previous standards efforts
that took a three-year or more time frames to come to market,
there are a number of important differences to this latest effort.
XML is proceeding much faster, addressing more transaction types
than we now have in any current insurance technology standard.
It will be, at the same time, global and insurance-financial services
The ACORD XML standards have not started from scratch. Instead
they are using the existing standard developed by IBM, MS and
Intuit called IFX. This standard is already being used in the
financial community. ACORD has formalized a working relationship
with IFXForum, manger of these standards. This cooperative venture
will extend the experience and expertise that the financial community
already has with Internet standards and provide insurancespecific
influence into this process.
The global nature of the financial community and that in many
other countries banks are already engaged in insurance had already
moved IFX/XML standards into the worldwide insurance community.
This is most apparent in initial London market efforts in cargo
insurance and reinsurance efforts.
As carriers began implementing their own Internet protocols,
they did so for many more lines and types of transactions than
pre-existing standards had addressed. Therefore, from its inception,
the XML Internet effort (new standard) will be more comprehensive
and include far more backroom functions (such as the full scope
of claims activities), and lines of business, (such as life and
specialty lines), than does the current widely used industry AL3
The benefit is a more comprehensive automation of the full
scope of functions necessary to transact insurance services across
a larger number of line types. However, to meet the pace of the
Internet evolution and manage costs, ACORD has made the decision
that the extended line and transactional capabilities developed
in XML will not be engineered in the older AL3 standard.
The challenge for some vendors will be to blend standards or
convert all their software to XML standards or offer systems that
only execute AL3 insurance transactions with carriers XML
companion interfaces completing the picture.
Therefore it is very important that agents be very aware of
these changes and plays an active part in shaping them.
Pete Wilson, co-chair of the ACORD Agents Advisory Committee
and member of PIA BTC, staff and myself are part of the process.
We will ask for and need the involvement of PIA affiliates and
members so that ACORD crafts a uniform XML standard that can be
applied in any number of options and accepted by the insurance
partners with which PIA members do business.
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