You can’t control the market. You can’t control if a CSR leaves you. You can’t control what a company pays you for a commission. You can’t control the economy. But, you CAN control the cost of your running your agency! Here’s how…


We’ve All Been Told How Important Automating is and How the Right Software Program Alone Can Greatly Reduce the Cost of Running Your Agency!

Here’s what one of the leading insurance automation consultants in the industry working with agencies on automation since 1989 has to say on this topic …

Dear Fellow Independent Agency Owner,

I realize the process of reviewing agency management systems can be a huge job — and a stressful job — so I’m going to give you some valuable pointers to take some of the pain out of this process.

Are you ready to turn your automation nightmares into sweet dreams ?

Even if you already have a system you’ll want to read this letter. That’s because as you become more educated on automation it allows you to make better, more informed decisions about the automation in your agency.

Not All Systems Are Created Equal

The first you have got to understand and accept is that management systems are not created equal!

Oh sure, they may all create ACORD forms, for example. But, what does it take to pull up the ACORD forms?

Does data pull from throughout the system to auto-fill the ACORD forms?

Are you doing an additional data-entry to complete the ACORD form with information that’s already in the system?

Take the Certificate of Insurance. If you sell commercial insurance you likely do a lot of these forms. Not only does a Certificate pull in multiple coverages into the same form, you’re dealing with multiple certificate holders that may require different wording on their Certificate. These are pretty comprehensive forms that few systems handle effectively costing the commercial lines CSR valuable time.

These are just a few examples of how systems appear to be the same, but are actually very different. Just because a vendor says it handles Certificates of Insurance, does it handle the ACORD forms in a productive way to minimize your time filling it out and processing your work? Or, does it provide you with a form that you need to fill out manually when it should auto-fill from data within the system?

These are the kinds of things you need to think about.

It’s Not About Whistles & Bells. It’s About …

So much emphasis, whether by sales reps or sales propaganda, is put on whistles and bells.

Much more important than whistles and bells is, “How well does the system handle clients? Policies? Endorsements? Renewals? Correspondence? Premiums & commissions?”

The key question is, “How does the system handle your day to day service work and tasks??!!”

If your day-to-day work isn’t being handled efficiently, what good are the extras in a system?

Yet, whistles & bells are a sales reps secret weapon because they can really make a system look good. They “wow” people, yet it’s the system’s ability to reduce your workload that increases agency profits!

It’s important that you realize that when it comes to automation what matters the most is getting your day-to-day work done in the most efficient way possible!

With a productive agency your CSR’s will have more time in each day to handle to taking on new clients with each CSR able to handle a larger book of business. In fact, one of the ways I measure an agency’s profitability is by calculating the amount of commissions for the policies a CSR is handling.

Once you create an efficient way of managing your day-to-day work, the next step is to work on building your agency with effective, strategic marketing. At least I hope this is what you want to do!

However, I have met a number of agency owners who are very happy with the size of their agency and have no desire to want to grow. If this is you, is it that you are comfortable with your size or is it that you are comfortable with the amount of time you put in each day and you’re afraid that if you grow you’ll have to either hire another CSR or put in more time yourself?

Think about that, and then consider this … what if you could increase your agency size by 20 – 30% and still only need to put in the same amount of time, or just simply decrease the hours you work each day? I can help most agencies at least accomplish this!

When Comparing Systems, The System You Choose Must Have These 2 Element!

From many years of working with agencies, all of those years of experience has shown me that there are 2 key elements that must be in place before I personally will recommend a system to an agency. I obviously look for more than just these 2 things, but these 2 key elements have to be there first. The 2 key elements are …

1. It must be easy to use. The harder the system is to use, less of the system the agency will use and the longer it will take the agency to start benefiting from what the system has to offer the agency.

Plus, a system that will allow you to have your CSR’s fluent on the system in 30 days versus 90 days up to 9 months can make a huge difference in your bottom line and how many CSR’s you need in your agency.

Yes, there are a few very complex systems on the market that take up to 9 months to become proficient on.

2. The system must be single entry . That’s because the more times you have to enter the same information into the system in different parts, the more work it creates for the agency.

In fact, doing double/triple entry of the same data is one of the biggest thieves of time for your agency.

The foundation to a successfully run agency is having the ability to manage as many policies per CSR as technically possible in the least amount of time without sacrificing the quality of service extended to your customers, but instead offering even better service! Then, to have the ability to out-market your competition!

Manual, Computerized or Automated … There’s a Huge Difference Between Them!

I’ve been working with agencies on automation since 1989. That’s a long time. With the goal of helping agencies to become more efficient and to manage more policies and clients in less time, I’ve learned that (and supported by ACORD) …

  • A well ran manual agency can manage up to 700 policies per CSR.
  • A well ran computerized agency can manage up to 1,100 policies per CSR.
  • A well ran automated agency can manage up to 2,100 policies per CSR.

What does all of this mean?

Think about it in your own agency. If you could double or even triple the number of policies each of your CSR’s can manage and increase the quality of service extended to your clients, how many CSR’s do you need?

I’m sure you’d agree that CSR’s are your largest expense with salaries, benefits and the taxes you pay on them. By having the ability to run the agency with less CSR’s you’ve really positioned yourself well, not to mention what it will do for your profit margin.

For the new agency or small agencies, this can be the difference between barely getting by and being able to grow fast and having the money to work with.

Let’s say you get hit with a hard market, or a recession, or a company pulls out, don’t you think you will be in a much better position to deal with those kinds of problems if you are able to run more efficiently with less staff? Absolutely you will!

My point is, “not all agency management systems are created equal!”

Plus, it’s not the whistles and bells that make the difference. It’s the systems ability to manage and handle your day-to-day work.

Creating Results, The Difference between Success and Just Getting By!

This is likely the most important part of this whole letter because this is where we talk about what the real key to automation is … achieving results with your agency management system!

Let’s say a year ago you purchased an agency management system. To measure results, you may ask, “What’s different with my agency today?”

Can you, for example …

  • Provide better service your clients?
  • Or, are your CSR’s able to manage more policies than before with the new system?
  • Or, like so many agencies who purchased low-end programs, did the new automation system cut your workload in some areas but create more work in other areas?
Agency owners that take great care in how efficiently their agency is ran slid right through recessions and don’t sweat it when it’s a hard market knowing there’s not much that can happen that will truly affect their agency.

Proper automation is unquestionably the most important thing an agency owner could do for his agency. It’s all about results… better service, faster service, less work, more time, explosive growth, increased profits and more!

How else is a brand new agency able to write 1,000,000 dollars of business their first year? And then continue to double their agency the next couple of years with incredible ease?

How is an agency with the same policy count and premium volume able to operate at 20 – 50% less staff than you and still offer superior service?

Through the use of effective automation!

3rd Party Software Programs Can Really Make a Big Difference

Up to this point, the main theme of this letter has been directed at agency management systems, and rightfully so since they are the foundation to meeting your automation goals. Plus, because an agency management system is your centralized database where you keep all of your client and policy information, it’s also the center point of integration.

There are other software programs you really need to consider as you pursue excellence in automation! Take faxing, for example.

As an insurance agency, you put out a lot of faxes, don’t you? And, when you have to fax something you end up printing it, signing it and then walking it over to the fax machine and hope nobody else is faxing or that you’re not receiving a fax so you don’t have to stand in line to get your fax out.

Sound familiar? How many times in just a day will you go through this time wasting procedure?

There are faxing software programs that can streamline your tasks of faxing

Picture this. You’re sitting at your computer terminal and you get a call from an insured asking for a Certificate. You pull up his record, pull up the Certificate, hit Print to Fax and it automatically takes the Certificate into WinFax with your signature on it and pre-fills the fax number and contact name in your faxing program for you. All you have to do is hit send. How much time did you just save?

Now multiply that by how many CSR’s you have and how many times each CSR will fax in a day … that’s a huge time saver! (It doesn’t work like this with all systems … ask questions.)

Of course the other option is to just email it, which today has become the standard. However, even here you need to make sure your automation system will properly handle emailing.

Another program you just simply need to have is Acrobat Writer to create PDF files you can e-mail out. With a number of PDF programs on the market, you don’t need to spend $270 for each license of Adobe Acrobat Writer.

If you’re a personal lines agency, a program you should strongly consider is a comparative rating program. Comparative rating programs kill 2 birds with 1 stone … they can rate all of your companies at the same time and then carry that information right into your agency management system eliminating any extra data entry.

These are just a couple of examples of 3rd party programs that can really enhance your automation experience. The point is, 3rd party programs maximize your automation experience and compliment your core automation system … your agency management system.

Running Your Agency via the Internet versus a Network

The World Wide Web has hit the industry in a big way. Everyone’s talking about it, trying to maximize its usability and take advantage of its power. The Internet is here to stay and will continue to grow.

There are a tremendous number of uses for the Internet, but is running your agency off of it one of them?

The answer is yes and no.

Yes if …

… you have multiple locations that you want to tie together or share customers with.

… you have outside sales reps who need access to your client base off sight. (This can be done without having an internet based system)

… you structure your office where the CSR’s work from home.

… your working from home is important to you. (This can be done without having an internet based system)

… you’re a larger agency spending large sums of money for a network technician to keep your system up and take care of your network (You actually have other options here like switching systems to a less technically convoluted system that runs better on the network, unless you’re locked into the system you’re in).

These reasons above where the Internet makes a lot of sense will only encompass maybe 5% of all agencies countrywide. However, there are software vendors trying to capitalize on the latest buzz word in the industry… the Internet .

Running your agency off the Internet is NOT the “solve all” to all problems or the only way to run your agency. The Internet is a “tool” that under the right application will serve you well, but it’s not for everyone.

Plus, changing environments from a network based system to an online system puts other requirements on the agency.

In addition, because of bandwidth issues and connectivity speed differences between accessing your data on the internet and your network, you have to write the online system differently to adjust for these differences which creates limitations over a network copy.

But these aren’t the only differences between a network version and internet based system. Putting your agency management system on the internet also brings a whole new level of issues and [potential] problems to the agency such as …

  • Not being able to host 3rd party programs that integrate with your management system causing a double-entry system. A few vendors will, however, host 3rd party programs.
  • There are speed issues. I don’t care how you slice it, running off a network will always be faster than pulling information from the Internet. I’m fully aware of the web-based programming “.net” technology … it’s still not faster than running off a network!
  • There’s connectivity issues. Not only do you need to be concerned about the vendor’s internet connection being dropped, you also have to worry about your own internet connection being dropped. There’s also the problem of loosing “packets” as information is sent to/from your management system via the internet.
  • It costs more, specifically in the month to month fees. For a large agency they may be able to off set this additional cost by reduced network costs but that’s generally not true for the smaller agency.

And don’t let anybody tell you that you that by putting your agency management system on the Internet that you’ll no longer need a network because you still will.

If you do choose to go with an Internet (ASP) solution for your agency management system you’ll hear terminology like .net technology, web-based technology (basically the same as .net technology), Citrix and Terminal Server. They are all very sound and solid solutions to running your agency via the Internet.

For agencies with under 15 logins, the less costly terminal server is fine. The person putting your terminal server together will be able to guide you on what you need for hardware.

For agencies with 15 or more logins, you’ll want to go with Citrix. It’s more costly but is a more robust solution and is designed for a lot of logins.

Another solution for running your agency on the internet —

Maybe you want the best of both worlds … the speed of running your main agency off a network and the flexibility of allowing others to link into your network and management system as an extension of your network through the Internet. Here are a couple of ways you can do that …

  • Smaller agencies who only need 1 or 2 people to link in might want to consider a Windows XP remote client or a simple Windows Server 2008 Terminal Server connection. It’s easy to setup and very low in cost. However, programs that are DOS based and not 100% Windows will have a problem in this environment.
  • Or for under 15 users you can go with a full blown Terminal Sever setup.
  • For agencies who need more than 15 people to link in you can setup your own in-house ASP. Here you setup a full-blown Citrix Server. This gives you the same functionality and power as full ASP providers have who host agency management systems, but here you are in control of it. The initial cost could be $2,000-$10,000 depending on how many people you’d like to link in but there’s no ongoing hosting fees . With this environment your in-house staff logs in via your fast network connection and outside people and agencies login through their Citrix login.

There you go, some good solid information about agency management systems and the Internet.


Bradley Chesnut
President of Insurance Automation & Marketing Consultants, LLC


Article written by Insurance Automation Consultant Bradley Chesnut in 2002, and updated in 2011.

Bradley Chesnut

Bradley Chesnut

Insurance Automation Consultant at Insurance Automation & Marketing Consultants, LLC
About Mr. Chesnut: Mr. Chesnut has been serving insurance agencies since 1989 which is when he sold his interest in his agency. His area of expertise is two fold …

1) Increased productivity. This is accomplished numerous ways to include teaching proper workflows when processing work with their agency management system, along with other productivity strategies. Mr. Chesnut is very proficient in workflows and productivity strategies. This is an important area of expertise because increased productivity equals increased profitability.
2) Agency growth strategies. Building your agency through innovative marketing strategies.

Over the past 20+ years Mr. Chesnut has represented two agency management systems playing a significant role in their success. In addition, he's worked with many of the systems on the market, including some that are no longer around as he’s helped agencies increase their productivity. Mr. Chesnut has extensive experience and first hand experience with the agency management system.
Bradley Chesnut

Filed under: Agency Automation