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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 …
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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?
If
you are, then you might want to shut your door and ask
your receptionist to hold your calls for the next 5
minutes while you read this letter.
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
automation.
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. But, what does it take
to pull up the ACORD forms? Does data pull from throughout the
system to auto-fill the ACORD forms?
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 really? 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? Think about
that.
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? 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 rep secret weapon because
they can really make a system look good. 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!
And,
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!
Of
course, I have to admit that I have met a number of agents 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 higher 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, given 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.
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.
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 outmarket your competition!
Manual,
Computerized or Automated … There’s a Huge Difference Between
Them!
14
years. That’s a long time to have worked with agencies on
automation. 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) …
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A well ran manual
agency can manage up to 700 policies per CSR.
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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, 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.
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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!
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?
You really need to have
a faxing program like WinFax (single user) or ZetaFax (network).
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 WinFax 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.)
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 needs access to your client base off sight.
… you structure your office
where the CSR’s work from home.
… your working from home is
important to you.
… 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 (I’m not sure if
the Internet is the right solution here or if switching systems
to a less technically convoluted system wouldn’t be better,
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.
Putting your
agency management system on the Internet also brings a whole new
level of issues and [potential] problems to the agency such as …
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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.
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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!
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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.
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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.
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 …
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Smaller
agencies who only need 1 or 2 people to link in might want
to consider a Windows XP or Windows 2000 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.
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For
medium sized agencies or agencies who need more than 2
people to link in you can setup your own in-house ASP. Here
you setup a full-blown Citrix or Terminal 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.
There you go,
some good solid information about agency management systems and
the Internet.
Sincerely,
Bradley Chesnut, President of
Insurance Automation & Marketing Consultants, LLC
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