The Evolution of the Agency Management System

Part 2: The Other Side Of The Evolution Of The Agency Management System… How They’re Created: Design Strategies!

Note: I’m aware that Vertafore has purchased AMS and they are now going by “Vertafore”. However, I’ve always known them as AMS. Therefore, as you read this just remember that AMS is now Vertafore.


In the previous section of this article we covered a lot of history about agency management systems and how they’ve evolved over the past 20 years that helped bring us to where we’re at today. In this next part of the article I’m going to discuss a very important topic … how they’re created: Design strategies.

Once you read this next part you’ll have a clearer understanding of agency management systems, their short comings and why the differences between them. Unfortunately most of the vendors haven’t even thought about what I’m going to be sharing with you here until it’s too late.

I have a lot to cover here so let’s get started.

There Are Two Ways To Design A System … Feature Driven Or Productivity Driven

To successfully design and create an agency management system the designer needs to have a tremendous amount of knowledge in agency automation, workflows, productivity strategies and more. This is a huge undertaking if it’s going to get done right.

During the 2000’s we watched the push for “increased productivity”, yet we’re still watching systems being designed as feature driven systems. Personally, I find this very frustrating.

That’s because, comparatively speaking, it’s way easier to design and create a feature driven system than a productivity driven system.

With a feature driven system you just simply add features (client database, ACORD forms, notes, follow ups, letters, email, and so forth). Then you do some basic integrations within the system like carrying the agency information and the clients information into an ACORD form.

The point is, with a feature driven system the driving force of the product is features. That is not to say they don’t try to build in some workflows and productivity strategies into the system because they do.

However, as you’ll read further on, adding workflows and productivity strategies into a system that’s been designed around features is very difficult to do.

A productivity driven system, on the other hand, is about helping the agency do what they do in the most efficient, most productive way possible, and to help them stay on top of things. It’s building into the system from the ground floor up workflows and productivity strategies. It’s knowing upfront before writing any code how the data needs to flow through the system and the workflows to process a task like a renewal with the understanding that the workflows need to be flexible due to the differences between carriers, states and even an agency’s in house approach to workflows.

That’s the big difference between a feature driven system and a productivity driven system is all of the features and tools are strategically designed and intertwined within the whole system with a productivity driven system. Instead of having a system with a lot of individual features, you have one fully integrated system with all of the features and tools working as one product.

As an agency you want to increase your productivity. Think about it, how many steps and windows do you want to go through to process a renewal? Endorsement? And the other tasks you’re doing every day?

I could also ask you, “How many CSR’s do you want to be required to have on your payroll to manage your book of business?”

The more productive you are the less staff you’ll need because each person will be able to manage a larger book of business. This is the key to creating a very profitable agency … being as productive as you can possibly be, and, of course, watching your expenses.

Unfortunately, this industry hasn’t experienced this type of a system yet. I’ll get to why further down.

An Agent Designed System Is The Agents Idea Of A System

In the market place what you generally hear from a number of vendors in their marketing is something along the way of, “Designed by agents for agents.” As you’re going to learn, that may not necessarily be good.

Traditionally, agency management systems come into existence one of two ways…

1. An agency hires a programmer to write him a program. Either the programmer (ie, Agency One) or the agency (ie, Policy Manager) markets the program.

2. An agency owner becomes a programmer and then markets his management system. This is how InStar got started.

These two methods aren’t the only way, but they encompass how over 90% of the systems that have hit the market have come into existence.

In both of these cases the agency designs the system.

The big question here is, “Does the agent have the skill set, experience and knowledge in the right areas to take on the huge undertaking of having an agency management system written?”

What you have to remember is the person designing the system only knows what he/she knows based upon his or her experiences! This is a key point that’s important to understand.

Unfortunately, very few agencies have a thorough and intimate understanding and knowledge of workflows and productivity strategies.

When it’s all said and done they will have designed “their” idea of the ideal agency management system. It’s may not necessarily be what the industry as a whole is looking for, but it’s certainly the ideal system for them. And then they’ll start marketing the program something like, “Designed by agents for agents.”

Only you, the consumer, can actually determine if they hit the mark or missed the mark to meet the automation needs of your agency.

Does this mean you should run to AMS 360 or Applied’s new Epic system?

Not at all. From my conversations with agencies on these products and watching their workflows, I don’t find them much better. Oh sure, they have a lot of features and they are far more single-entry than the other systems on the market, I still find their workflows to be clumsy and difficult.

Using AMS 360 as an example, I was shocked at the number of windows and the number of steps to renew a policy compared to InStar. InStar was actually one system I was pleased with. It use to provide a good balance of price to results until AMS purchased InStar and dramatically increased the price. Plus, I’m told that they are constantly being pushed to upgrade to 360. I can’t help but wonder if InStar’s days are counted.

Here’s another important point to consider. Vertafore (AMS), Applied and any other vendor that has a current product on the market with customers using it has a really tough challenge when doing a product rewrite, like going from AfW to 360 or Applied TAM to Epic.

Their problem is their users demand that all of their data is converts to the new system. After the huge outcry of Applied TAM users not getting a full data conversion to their Vision product, this I believe was a huge eye opener of the importance of converting their users data to any new systems they develop.

With the outcry being heard industry wide, all vendors took notice and realized that a rewrite of the system needed to include being able to convert all of their clients data. But in order to do this the vendor has to maintain basically the same table structures as the previous system, and table structures are foundational to the systems ability.

After talking to quite a few AMS 360 users and a few Epic users, they have all pretty much said that the products are very similar to their predecessors … basically the same workflows and table structures. They said the only thing that really changed was the programming environment going from a windows based product to a web browser based product.

This to me is NOT re-engineering the management system. It’s just simply changing the programming environment to a more current environment.

Yes, I do think this was a very good move on both of their parts since both of these vendors are more focused on cloud based systems over a network system and would prefer to have all of their customers run the system via the internet.

While AMS (now Vertafore) and Applied unquestionably have the financial ability to have the agency management system re-engineered to the productivity driven system this industry desires, until they get the right design team and are willing to accept that a complete table structure rewrite needs to be done to support a productivity driven system which will likely mean they will not be able to convert 100% of their current users records, it’ll never happen. This, of course, is my opinion.

Within A Vendors First Year They Start Realizing How Their System Really Stacks Up To The Other Systems On The Market And Their System’s Flaws!

We now jump forward a year after the system has been released to the industry. By now the new vendor has got customers and likely an ear full of what’s missing, what they did wrong, why they can’t switch from their current system to this new system and much more, to include comments of what they did right.

Most agencies understand that software is just a tool to help them achieve a goal or objective. What those specific goals and objectives are is specific to the agency owner and what he/she feels is important. For example …

  • One agency may have a real need for an insurance specific accounting system and is done fighting retail accounting packages like Quickbooks. Another agency may have this same need because they’re frustrated with all of the steps to handle sweeps from their account, and tracking and managing the sweeps.
  • Another agency may need downloading with a specific carrier in order to get a contract with them as their main need for a system at the time they’re reviewing systems.
  • Another agency may be sick and tired of the clumsy steps to process transactions.
  • Another agency may be sick and tired of the amount of double entry in their system
  • Another agency may want to increase their productivity to reduce their expenses

… and the list goes on and on. If you talk to 100 agencies about ‘what’s important to them with their management system’ you’ll get between 70-80 different answers.

But once those ‘core needs’ are met, then the agency is looking at other key things that are important to them regarding their insurance automation system. It’s these other things that the new vendor may not hear about if the system doesn’t at least meet the agencies core needs.

In addition, an agency absolutely does not want to go backwards with their automation system. They don’t want to lose features or reduce their productivity by moving to a new system.

Over the past few years I’ve talked to a number of lower end vendor sales reps as a consultant and they’re all telling me the same thing … “They can’t break into the mid sized agency or agencies on the more expensive, more robust systems.”

That doesn’t surprise me at all!

Breaking into an agency that’s focused on decreased workloads, increased productivity, decreased expenses, increased profitability requires a system with more than a bunch of features. For one, the new system needs to pickup where their current system leaves off by helping the agency continue to increase their productivity, provide a higher level of service to their clients and much more.

However, smaller 1-3 person agencies, for the most part, are very cost conscious with their limited budgets and generally new vendors come to the market with a very low price tag. Bluntly, that’s enticing to the budget conscious agency.

Just remember, it’s not about the purchase price of the management systems. That’s minimal in comparison to the drop in expenses your agency will experience by owning a system that will increase your productivity. Like those of us who are very experienced in automation and productivity say, “The purpose of automating an agency is to increase their productivity which in turn increases their profitability.”

However, we still have to consider the small agency and their limited budgets. If they’re just not financially able to purchase a system that will create a more productive agency, I point out that having something is still better than nothing. I recommended these agencies to purchase a low cost system with the full understanding that as they grow they’ll out grow the system and will eventually upgrade to a better system. (My recommendation is more complete and thorough than what I have time for in this article.)

Therefore, with this understanding, part of the decision making process is making sure you can get all of your data out of the system to be converted into the next system. You want to know if there’s any cost to getting all of your data and you want to get an idea of what the cost would be to convert it into a new system.

For example, I’ve heard Applied charges around $2,000 to un-encrypt the documents attached to their imaging module and AMS 360 charges around $3,000 to even get your data so you can have it converted.

These are things you want to think about and be aware of when purchasing a system. Personally, I think it’s just down right wrong to charge you to give you access to your data if you want move to a different system, but that’s me.

One business model I’ve consistently seen in the industry is to entice agencies with a low price. After reviewing the systems it’s a clear case of “you get what you pay for”.

For example, over the past 5 years I’ve watched a few low-end, feature driven systems charge a monthly fee per agency, not per user . Since their primary market place is under 4 users that pricing model works for them.

In this industry it’s been well established that the more productive a system will allow an agency to be and the less double entry there is in a system, the more money the system costs. It’s far easier to create a feature driven system, but it’s quite a huge feat and very expensive to create a system that’s productivity driven and single-entry. Very few people are skilled enough to accomplish creating a productivity driven system.

Along with this, it’s a lot easier to build a system for the personal lines agency than the commercial lines agency. Commercial lines management is its own beast with package policies and the required flow of data to the different sections, to name a few things.

Creating an insurance specific accounting system is another very complex design task that once again takes a very skilled person to design with an extensive experience.

Trying to integrate all of the pieces of a system together is anything but easy, but required if the objective is to create a productive system.

That first year of a new system is an important year because it shows the vendor what type and size of agency their product is best suited for, what they need to do to be able to break into larger agencies and much more.

Couldn’t A Vendor Just Add The All Important Workflows Into A Feature Driven System Later On?

“Couldn’t a vendor just add the all important workflows into a feature driven system later on?” is a very good question.

The answer is kind of yes, but mainly no.

Designing a management system with workflows, to be single-entry and to massively increase an agency’s workflow is just simply something that needs to be done from the ground floor up. A productive system is the design where everything works in harmony together, data flows properly through the system and work gets done in the least amount of steps and windows; just like a feature driven system is the design of the system where it’s built based upon the system having key features.

Think of it this way. It’s like building a beautiful two story house on top of dirt, and then later realizing you need a cement foundation and trying to add it later … it’s next to impossible to do.

I’ve been part of a few different management systems design team. I can’t tell you how many times I’ve made suggestions to improve the productivity of the system for their users and get told, “We can’t do that without re-writing the program”.

The high majority of suggestions I made got that response, and not from just one vendor. It was consistent with all of the vendors I made design suggestions to. Why?

Because the design of the system and the table structures of the system wouldn’t support the workflows or productivity strategies I suggested. Once again, let me emphasize, the product design lays the foundation for the system and what it’s capable of doing.

This just shows that the only way to truly build a management system that’s productivity driven is to build it from the ground floor up because workflows need to be intertwined as a foundational part of the system. Adding some workflow pieces here and there will only put a band aid on the problem.

This is what has frustrated me so much with the systems on the market … The discussion of “increased productivity” has been the theme since the 1990’s! Then why aren’t these systems being built from the ground floor up with workflows and productivity strategies intertwined into the system?

The answer is pretty obvious:

1) What you have to remember about an agent designing a system is an agent only knows what he/she knows. Or,

2) Like mentioned above, when a vendor does a complete rewrite of their system if they maintain the same basic table structures and workflows they’re not changing the efficiency of the system. They’re just rewriting it in a new programming environment and are adding new features to it.

Then who is best equipped to design a management system?

Insurance Automation Consultants Take Agencies To A Whole New Level Of Productivity!

Insurance automation consultants have a very specialized skill set. As an insurance automation consultant I’ve worked with agencies in every state (I understand the differences between state laws and special insurance requirements), I’ve worked on something like 15 different systems to help agencies become more productive and efficient, I teach workflow strategies, I show agencies “work arounds” when they need a specific result from their system that their system can’t do and much more.

It’s been my consistent experience that very few agency owners understand proper workflow strategies and how to create a productive agency, nor have they been taught advanced productivity strategies and workflows. Without this advanced knowledge, workflows are for the most part overlooked when creating a system, as they quickly find out after releasing their “feature driven” system.

Please don’t misunderstand me. Agencies do the best they can. It’s just that there’s a lot to creating a productive agency and the agency management system is the foundation to this objective.

I remember doing a workshop for a group of agencies on workflows back in 2005. There was 3 CSR’s that came that had been in the industry for over 15 years each and they all felt like they were very fluent on their system. They could not understand why the agency owner spent the money to have them attend this workshop.

At the end of the first day the 3 girls came up to me and told me they were just blown away. They had no idea that there could be a much easier way and more efficient way to process their work. They told me that from what they learned just from that first day would easily cut their workload by at least 10%. What does that 10% drop in their workload mean?

The agency had 15 CSR’s. With 15 CSR’s dropping their workload by 10% that means they just reduced the need for 1.5 CSR’s to maintain the same workload they currently have. Or, another way of putting it, they just gained an additional 260 hours each month (3,120 hours per year) to provide a higher level of service to their clients or however else the agency wants to use those extra hours.

This was the first time this agency had ever worked with an insurance automation consultant that’s proficient in workflows and productivity strategies. Working with a consultant at this level is a whole different ball game to being trained by vendor trainers, which is predominately how an agency is trained to use their automation system. It’s the same with this agency … their only training experience had been from the vendors trainers which only teaches “product knowledge” training which is how to use the system.

It’s not uncommon for an agency that designs a management system to believe they know how to re-invent the agency management system, to later find out that there’s a whole lot more to it than just the features of the system. Some system designers think a specific feature will move them to the big league.

But with so many moving parts in an agency management system, each part needs to work in harmony with the other parts, data needs to flow throughout the system and processing tasks needs to be easy. In fact, speaking of “easy”, ease of use is the #1 request of agencies.

Because of the skill set, experiences and expertise’s of the insurance automation consultant I believe this person would be the best suited to design a management system.

My Conclusion

I’m excited to one day see a system designed and introduced to the market place that is productivity driven. Until that day comes, here’s how I see the market place:

  • As an agency grows their needs increase. We can watch the evolution of an agency as it grows (another article). Along with this, as they grow their needs change and they have additional needs. That’s why an agency can expect to upgrade their system as they grow.

  • A small agency with a limited budget needs a productive system far worse than a larger agency with deeper pockets.

  • There will always be feature driven systems. They are just simply far easier and less costly to design and create.

  • A system is based upon the designers experience and knowledge in this industry.

  • AMS 360 and Applied Epic are best suited for larger agencies. These are expensive systems with a lot of features the larger agency needs and can benefit from, but have too many windows and steps to process tasks which reduces productivity in the agency. Plus, the learning curve for these complex systems is the longest of all systems.

  • Smaller agencies need to just simply accept that eventually they will move to a more advanced system as they grow. Therefore, you want to make sure you can get all of your data out of whatever system you purchase. You also want to know if the vendor charges to give you your data. Along with this, you have to accept that there is no such thing as a 100% data conversion!

  • If you know you’re going to eventually need to upgrade to a better system then you would want to have a network system that you purchase and own. If you purchase your system via a subscription (all web based systems are subscription) the system will eventually shut down when you stop paying your subscription payment. I’m making this suggestion because it’s far easier to move to a new system if you can retain access to the old system to pull past historical information, finish out the accounting and for numerous other reasons. Plus, by running both systems side by side, or at least having access to the old system, you will move to the new system easier.

  • Something is better than nothing. In other words, having a low cost, low end system is still better than having no system at all. Then, once you get a taste of what an automation system can do for you, as finances allow you can start looking at other systems to find the system that will better fit your agency’s needs.

Good luck in your journey. Have questions? Go to our questions page.


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 Management Systems