Independent insurance agents face cost and administrative stress
Commercial lines insurance may be a rapid growth opportunity, but Applied Systems research has found that it is also a profitability and administrative burden for many independent agencies and the software company believes there is a way to reduce this cost burden. The answer lies largely in technology.
From commercial quoting solutions, to payment processes, to big data, senior leaders and executives in the insurance software business promise to reduce administrative costs and time burdens for their users through innovations at Applied Net, Applied Systems’ annual conference. Have done. Launched and ready to take off on Applied Epic and EasyLynx platforms.
Small business insurance costs have “skyrocketed” for agents
In recent years, small commercial insurance acquisition and remarketing costs for independent agencies have “skyrocketed,” according to Raghav Tanna, SVP, Applied Systems, product management in commercial areas.
Applied Systems research has found that the average renewal or remarketing is taking 103 days, and much of this may be “idle time.”
“If you’re spending 103 days on a $1,000 policy, you’re probably not making money on it,” Tanna, who joined Applied Systems after its acquisition of commercial line rating solution Tarmica in 2022, told insurance business, “Our goal is to essentially allow them to do that in seconds – so you click a button, all that’s done, you bind the policy, and you’re done making it profitable.”
With carriers using direct-to-consumer methods, which have the potential to “shut down agencies”, Applied Systems also sought to create a comparable solution for their independent agent customers.
“We’re essentially giving all the direct-to-consumer tools that the carriers have back to the agencies so they can put it on their point-of-sale systems, they can put it on websites, they can add it to their affinity partnerships, or wherever they want – and they can get business from places where you wouldn’t normally see people buying insurance,” Tanna said.
“Consumers will buy insurance when they’re buying other things that make sense to buy it with – if you’re paying your taxes, you should buy insurance, if you’re buying a new car for your business, you should buy a We need a commercial auto policy, and we think it’s invaluable.”
Payment processes are proving to be a cost and administrative burden for independent insurance agents
Applied Systems has found that payment processing is another area that has the potential to drain time, dollars and resources for agents and create friction with customers.
“For many of our agencies, the process of collecting money from their insured customers has been awkward, and they know it is difficult, and they want to give their insureds a better experience,” said David Stevens, VP of Applied Pay at GTM. ” He joins the business from a senior strategy and insights role at Google, whose parent company made a strategic investment in Applied Systems via growth fund Capital G earlier this year.
“You have to make it easy for people to pay, because no one’s going to be like: ‘I can’t wait to pay this insurance company $1,000 or $10,000,'” Stevens said.
For Applied Systems, which has moved to “differentiate itself from its peers,” according to Stevens, this meant introducing both credit card and ACH transfer functionality into Applied Epic.
The addition is intended to attract customers, but it won’t solve a problem that causes a resource-heavy headache for insurance agencies: manually adding payments to their broker management system.
“It’s not very useful to spend too much time on that, a lot of people sitting in that seat have a lot of other things to do,” Stevens said.
To meet the need for simpler funds applications, Applied Systems has introduced the ability to automatically integrate these into Applied Epic.
“Those things match automatically now and it’s nice to use them,” Stevens said.
Looking ahead to 2024, Applied Systems intends to target reconciliation tensions, including what Stevens described as a “horribly painful process” of reconciling attainments, including a competency score that goes through zero for any Will show confidence in the system for missing payments. 100 scoring method.
According to Stevens, it is also looking at dealing with the accounting and compliance “pain” of disbursements, especially when it comes to manually dividing how much premium should be collected.
“We are working to treat this as a reconciliation [in terms of the scoring system]” Stevens said.
Agents Might Not Want to Be a “Data Guy” – But They Might Miss Out
Attendees at the Applied Net keynote heard that by using big data to increase profits and growth, agents may also be missing out on a better understanding of opportunities for their customers and their own businesses.
“One thing we’ve heard over and over again from agencies is that we don’t want to be the data guy, we want to be a trusted advisor,” said Anupam Gupta, chief product officer at Applied Systems, who has been at the agency for just a year. Long spoke previously in roles leading teams at large technology companies and major media analytics and software businesses.
Still, according to Gupta, being in a “data rich” insurance industry presents huge opportunities for agents when it comes to driving growth and improving their internal business practices.
Applied Systems is running a pilot program with its Product Advisory Committee to look at measurable results when agents use data to their advantage.
A prime example involves the owner of a family insurance agency who used a pilot to zone high-risk policies at renewal time, with the agency’s policies increasing from 90% to over 95% year over year. Were.
“How you are able to easily identify high versus low risk and activate groups of individuals differently can make a big difference,” Gupta said.
overcome the fear of being alone
Taking advantage of the latest technology can seem like a big task for any single independent agency trying to keep clients happy and renewals on track amid a tough market, and the big message at Applied Net was that agents shouldn’t feel like they need to be alone.
“We strive, we invest, we invent for one simple reason – our investment to accelerate insurance’s digital roundtrip creates incredible power and value for you, putting you to work on the most valuable tasks, faster. helps us execute and create more value for our customers,” Taylor Rhodes, CEO of Applied Systems, told attendees during a keynote address. “We have a big ambition – and that is to serve you for so long that you will be proud to call us your indispensable growth partner, and we know that is a very high standard to which we will never stop working. can not do.”
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