Force Fit

How would you feel about retooling your agency to provide coverage only in massive bundles? 

Your client needs a professional liability policy? You can provide one, but it comes with personal, auto, commercial general liability and a side of employer-funded benefits. Sorry, no substitutions. Oh, by the way, your policies are riddled with exclusions and will only provide about half of what your client is looking for.

Surely your clients and prospects wouldn’t appreciate this idea. Unfortunately, we accept this scenario in our agencies when it comes to our business systems. Agency management systems are filled with features but somehow manage to satisfy only a percentage of what each agency needs. Customer Relationship Management and sales automation systems generally hit the mark when it comes to meeting our needs but are so jam-packed with superfluous features that they’re intimidating and hard to navigate. This results in lackluster adoption that negates the positive features. On the flip side, features that would immediately benefit our agencies simply don’t exist in our industry.

Pick Your Prison

Imagine insurance technology as a landscape filled with square, brick, windowless buildings, each promising to provide everything you need. But this promise comes with a catch. Once you enter one building, you won’t be able to access features and services in the other buildings. Each building is an ecosystem designed by a company that contains its best guess as to what your agency needs. Unfortunately, every feature doesn’t always hit the mark. In contrast, the world outside of our industry is experiencing a renaissance of open, easily connectable software and cloud-based systems.

In fairness to our agency management system vendors, they do try to gather our opinions on new features. But when I speak with agencies about their systems, the highest praise I typically hear is, “It works for the most part.” While these systems have improved over time, the piece of the equation that’s missing is innovation.

The recently announced retirement of Microsoft CEO Steve Ballmer holds some clues. When Ballmer took the reins at Microsoft, the company was firmly seated at the top of the software innovators. During Ballmer’s tenure, the entire world changed. Software moved to the cloud, eliminating the need to continually upgrade PCs. Mobility and smartphones further eroded the PC market. Ballmer focused on protecting Microsoft’s most profitable products: Windows and Office. This defensive strategy forced Microsoft to ignore the fact that the world of the PC was changing.

In the meantime, Apple pushed forward with the iPad. In a much-quoted exchange, Steve Jobs was asked if he feared that the iPad would cannibalize sales of Apple laptops, to which he replied, “If we don’t do it, somebody else will.” In the end, Apple not only cannibalized its own laptop business, it devoured the entire PC industry. This strategy was unthinkable at Microsoft. Its defensive posture virtually eliminated Microsoft’s position as an innovator, and the company has been huddled around its increasingly irrelevant products ever since. Sound familiar?

Our agency management system vendors have to play defense, choosing a path of evolution over revolution. Creating an environment that provides open access to the best features, even if they exist in a competitor’s product, simply doesn’t make sense to their bottom line. In addition, making major changes to these systems, even if requested by the majority of the industry, introduces risk into the machine. If you’re playing defense, you’re not innovating. Welcome to the world of insurance technology.

Going Off-Road

Most agencies accept the status quo of insurance technology. With an agency system and a healthy dose of Excel workbooks, most agencies can get by, but it doesn’t have to be this way. There is a way to innovate outside of our standard software.

Do you want a dashboard that shows a holistic view of your customers across all lines of business, from both a coverage and financial perspective, cross-referenced with real-time geographic, weather or other data? While it may not be an easy path, your agency can make this happen with third-party systems that haven’t become commonplace in our industry. You will be heading off-road on a journey that will weave through developers, integrators and consultants who may have a very narrow (if any) understanding of how your agency works, so you have to be prepared. In addition, you will have to tie your new system into the ecosystem, or perhaps even multiple ecosystems, that you already have.

Does this mean you should shy away? No. If this industry needs anything related to technology, it’s a kick in the pants. Those firms who invest wisely will always outperform and outmaneuver the firms that accept the status quo.

So how does an agency start down the path to innovation? The following steps will point you in the right direction.

Understand Your Pain. The first step is to know your needs. Before you create a list of wants, take some time to focus on your pain. Is certificate issuance and tracking in your agency system insufficient? Why? What are you missing, who does this affect and how does the world improve once the problem is solved? Firms tend to skip this step and jump straight into making lists. It’s critical to understand the problem, the solution and the return.

Understand What’s Out There. While rushing headfirst into innovation, firms commonly make the mistake of creating a tool that’s no better than existing solutions. Once you understand your pain, take the time to survey the environment. If your firm is relying on consultants or outside developers, make sure they’re not missing this step. Solutions exist outside of our industry that may provide a better path than custom development. Explore all angles before you proceed.

Communicate Relentlessly and Take Ownership. Whether your firm is developing a custom application or integrating a third-party solution, communication is key to your success. Don’t plan to farm out the entire project and only show up for status reports. If you do, you’ll likely be unhappy at the end. You’re off the beaten path and need to participate in the process at every stage.