Tag Archives: technology

Achieving Digital Balance in an Agency

You’ve probably seen it in your own life. A new gadget or software program promises to make life easier, but you can’t bring yourself to get started. 

Maybe it’s too complicated to set up. Maybe you’re not sure if it really works. Maybe you’re just set in your ways. So, you keep trudging through the old way of doing things. 

The same thing can happen at your insurance agency. Every month, you face decisions about what technology to use in your day-to-day operations, how to get the most value out of the services you already use and how to improve your customer experience. 

As the head of a company that offers those kinds of services just for the insurance industry, I have some insight into how to make those decisions and achieve what I think of as “digital balance” — a task that has only become more urgent since the coronavirus pandemic began. 

What Does it Mean to Have Digital Balance? 

Digital balance is the Goldilocks spot. At one end of the spectrum, there is too much technology. We we spend loads of time trying to use everything offered in hopes of some productivity breakthrough. At the other end of the spectrum, we are really not taking advantage of technology because we are relying too much on the comfort of old processes we think work good enough. Digital balance lies in the middle of the spectrum.

With the myriad of applications and software thrown at us as a means to improve our lives and our workflows, finding digital balance is really about learning to evaluate the technologies we use on a daily basis, so we can embrace the ones that improve our efficiency and productivity and let go of those that no longer provide value. 

The importance of this evaluation has become even more apparent within the past 18 months as we navigate through the ups and downs of the pandemic, striving to still provide our customers the best experience possible and give our employees the tools and support they need to succeed. 

A simple way to evaluate your balance is by breaking your company down into categories depending on your specific makeup. I will just review a few examples, but there are obviously others like human resources or accounting that could be reviewed much the same way. 

How to Review Your Digital Balance 

Here are the five main categories I will review: 

  • Internal Communications: How we communicate with our staff.
  • Workflow/Documentation: The processes by which everything gets accomplished and recorded as it moves through our system.
  • Marketing: How we tell our story, position our brand’s value and reach potential customers.
  • Sales and Customer Service: The way we deliver on the promise to provide the best customer experience possible.
  • Data and Metrics: Measuring the results of our efforts and accessing information to make improvements.

See also: Digital Is the Assistant We Always Wanted

The way we evaluate our digital balance is by looking at each category across our company, creating an inventory of technology, evaluating each solution, identifying any pinch points, setting our priorities and making a plan to adjust our solutions to maximize efficiency and productivity. 

Internal Communications

Given the new dynamic of having, in some cases, onsite and remote employees, internal communications are more important than ever. Your employees need to communicate quickly and effectively. Failure in communication can lead to declines in productivity as well as employees feeling isolated.

Some of the questions you might ask are: 

  • What are the processes behind how we communicate currently?
  • What communicating technology are we currently using? Is it effective? Is it redundant?
  • What are we relying on the most: email, phone calls, voicemails, sticky notes, instant messaging, intranet?
  • How are we avoiding employees and departments from being/feeling siloed?
  • Are we using technology to streamline communications?
  • What hardware or software do we need to fulfil our communications needs?
  • Have we considered all the security risks for communications on personal hardware and remote access for employees working out of the office? 

Workflow/Documentation 

All projects live somewhere. They may be new, complete, in progress or maybe in need of changes. The point is, to get things done, there needs to be a process by which workflow happens. Technology can create an efficient solution to make this happen and track the results. 

  • Do we have a work-flow process that could be improved by technology? 
  • Are different departments using separate technologies to get the same result? 
  • Has staff using the technology been trained so they can maximize the effectiveness?
  • Does remote staff have the same access? 
  • Have we signed up for technology that we are not even using? 

Marketing 

Brand, perception, reach and awareness. So much technology has been developed to maximize the way we communicate our company’s value to the prospect. It is very easy to lose track of all the tools available. Often, many technologies overlap.

  • What is the inventory of each technology we are using, and how is it used to achieve the desired result? 
  • Is there a way to combine any of our marketing needs into one solution? Will there be an advantage? 
  • Do our marketing needs require specialized solutions outside of other solutions the company uses? 
  • Will the costs of technology used to acquire new customers exceed the value? 
  • Do we have the staff, and are they trained to maximize the effectiveness of the technology? 

Sales and Customer Service 

From your customer relationship management (CRM) to building relationships and solving customer issues, technology plays a big role in providing the best customer experience possible. Processes can be greatly improved with solutions that put customer information at your fingertips. 

  • Do sales and customer service have access to the technology needed to provide the best experience? 
  • What is our customer lifecycle, and what technologies can we put in place to understand and improve that experience? 
  • Are we using technology to track how we are communicating with customers during and after onboarding? How do we know where we can make improvements? 

See also: 1 Million Digital Life Presentations

Data and Metrics 

Knowing where we have been certainly helps us improve where we can go. Using technology tools that provide access to data and metrics gives us valuable insights, allowing us to make better decisions and make improvements. 

  • What key performance indicators (KPIs) do we need to measure to give us the information needed to make better decisions? 
  • Will one technology meet the needs of all my data requests? 
  • Are we collecting data from technology but not using it? 
  • Do I have the staff to effectively use this technology? 

Achieving Digital Balance 

These are just general guidelines for you to evaluate your technology footprint. I hope you can use this information to maximize the technology you are currently using and possibly look to introduce new technology to build a more efficient and productive work environment. 

Small Commercial: Digitizing Distribution

How far along are commercial lines carriers in delivering digital solutions to their agents and other distribution partners? Answering that question depends on whether you are a glass half-empty or glass half-full type of person. The pessimist might say: Despite huge investments in technology over the past few decades, there is still a great deal of manual processing; the time for the rate-quote-bind process is too long; and the goal of truly making it easy for the agent to do business with the carrier is still elusive. The optimist would cite enormous industry progress, as many companies have increased straight-through processing (STP) to a significant percentage of the business; digital self-service capabilities for both sale and service are widespread; and agent-carrier connectivity, in general, enables astounding volumes of electronic business flow.

SMA recently surveyed carriers focused on the small commercial market to assess the state of digital capabilities offered to distribution partners, the barriers to implementation and adoption and the plans for enhancing or delivering new digital capabilities. We discovered that rather. than taking a glass half empty or half full approach, the better analogy is a road trip, with the kid in the back seat regularly asking, “Are we there yet?” It turns out that the question is not easy to answer. Once you get by the lofty goals of STP and ease of doing business (EODB), there are a variety of specific functional capabilities that are important. By the way, STP and EODB are still the top two reasons that carriers invest in tech solutions for distribution, and they do provide a north star for plans in this space.

SMA’s research tracked 14 different digital sales-oriented capabilities and 17 servicing capabilities, starting with a carrier’s satisfaction with the state of the offerings to their distribution partners. Suffice it to say that, while some are satisfied with their offerings, many are not. For example, only about a third are satisfied with their quoting capabilities. Satisfaction levels on the servicing side are higher, but there are still many companies that are dissatisfied or do not offer the digital capability. In terms of plans and projects, there is lots of investment and activity in addressing the areas where companies believe they are weak. For example, data pre-fill is the top project area for sales capabilities as it is a critical starting point for achieving STP.

See also: Agencies Turn to Networks for Growth

There are both business and technology roadblocks to success in distribution technology. For example, few will be surprised to learn that limited IT resources are the #1 barrier on the technology side. In short, this is a very critical but complex area of the insurance business, and the industry as a whole is moving to enhance the digital capability provided to distribution partners. It is a journey, but, like that proverbial kid in the back seat, many executives will continue to ask, “Are we there yet?”

For more information on commercial lines distribution expansion strategies, see our recent research report, “Distribution Technologies for Small Commercial: Carrier Progress and Plans.” SMA is also introducing a research series with perspectives from the distributor viewpoint. A regular series of research reports will be published based on surveys and interviews of agencies, brokers, MGAs and others in the distribution channel, including insights from ReSource Pro’s large footprint of distribution clients. 

Need to Assess Tech in Public Risk Pools

With more than 90,000 public entities in the U.S., the Association of Governmental Risk Pools (AGRiP) estimates that at least 80% participate in one or more pools. By pooling their risk—and accountability– these not-for-profit organizations can economically provide risk management and loss control, underwriting, claims management and a comprehensive package of insurance coverages that typically includes property, casualty and workers’ compensation. This effort supports a pool’s #1 priority: the co-owners of the pool—its members. These members hail from local and state municipalities, including entire fleets of first responders (fire, police), public utilities, school districts, etc., government-run hospitals, public libraries, community colleges, support staff and more. Accordingly, the typical pool must ensure its technology systems can reliably support the needs of its members.

Ensuring uptime is paramount. During COVID, pools — like most private or corporate sector organizations — were forced to adjust how they worked, many prioritizing their IT wish list to maintain operational performance and resiliency. But, unlike most organizations, pools are restrained by outdated legacy systems and a limited, fixed budget. As a result, that wish list remains a wish, not a reality. 

Undoubtedly, budget concerns are one of many issues facing pools: Often, these organizations don’t have a large IT staff and are forced to maintain operations “the way it’s always been done,” cobbling along in the hopes that risks will be minimal. In actuality, the risks facing these organizations are at an all-time maximum.  

This conundrum is complicated by the fact that most pools rely on antiquated databases and Microsoft Office products for the bulk of their day-to-day operations. At a minimum, this reliance opens the door to Outlook phishing, making the pool more vulnerable to cyber criminals. Many may use Excel or other inexpensive spreadsheet programs that make it difficult to access data and almost impossible to regroup on errors. Imagine the time required to backtrack, inspect various versions of the spreadsheet’s values, calculations, source data and file history to correct the error, wreaking havoc with routine financial or regulatory reporting. Some pools use insurance core system software that, with the exception of claims, includes workflows that don’t necessarily match with the pool’s own protocols.  

If all this doesn’t spur you to think differently about how technology is managed, consider the largest, most recent risk affecting pools:  ransomware. Public entities are one of the most targeted sectors yet often have the fewest resources and capabilities to prepare for and respond to ransomware attacks. Consider that 2,400 U.S.-based governments, health-care facilities and schools were victims of ransomware in 2020, according to Council on Foreign Relations blogger Michael Garcia. In 2020, cyberattacks cost government organizations in the U.S. approximately $18.88 billion in downtime and recovery costs, according to a report from consumer tech information company Comparitech. And local governments continue to experience the greatest number of ransomware attacks, according to security company Blackfog.  

SH:  Foundation a Critical Asset

Yes, ransomware is a network issue, and, with ever-evolving ransomware keys and infiltration methods, there’s no way to prevent an attack with 100% certainty. But the rise in cybercrime is spurring pools across the country to wake up to the fact that it’s the pool’s technology foundation that enables them to best respond to their individual public entity members, which makes that foundation more valuable than ever. Without a unifying approach to IT management that includes modernization, pools will continue to struggle to operate efficiently, much less deter, disrupt, prepare for and respond to ransomware events.

See also: Why Open Insurance Is the Future

Let’s revisit the statement about pools and their fixed budgets. As pools work with members on their annual loss control programs, they ask: What is the cost of not modernizing systems that are used to make city payroll, keep utilities up and running, communicate with first responders and even save lives?  If nothing else, the latest wave of ransomware is a learning moment for pools that have been trying to define a path to digital maturity.

That path, which can be undertaken by pools of all sizes, begins by conducting a basic technology assessment, which can be used to identify both known and unknown risks, issues that affect data access, workflow, operational performance and resiliency, network and systems’ vulnerabilities, mobility and, of course, security. 

The good news is that pools that have undertaken tech assessments are finding that their legacy systems can stay put—there are inexpensive ways to modernize and drive immediate front-end results without an overwhelming rip/replace approach. And, there are solutions available that can facilitate a stepped approach to evaluating protocols, optimizing processes, enhancing workflows and improving services. 

Let’s face it: Whether in it for a profit or not, pools want to reduce operational costs, increase policyholder/member satisfaction, offer systems that are attractive to younger IT workers and form a solid and secure foundation for the future. 

Recent events tell us that it’s no longer an option to “just get by” or “wait and see.” The choice pools face today is a calculated one, and it’s important to recognize that their goal—to attain effective integrated risk management–is only as powerful as the technology foundation that supports it.

Workers Comp Trends for Technology in 2021

One year after the start of the COVID-19 pandemic, Mitchell International conducted its annual survey of about 100 workers’ compensation professionals to determine how technology use changed in the industry during the pandemic and how those changes will continue. The survey found:

Technology use is increasing in the workers’ compensation industry  

  • Predictive analytics and telemedicine stood out, showing that the industry rapidly increased the pace of adoption – or the desire to adopt – those technologies during the pandemic.
  • More than half of organizations report implementing telemedicine since the pandemic began, and respondents ranked telemedicine (35%) and predictive analytics (35%) as the technologies that will have the largest influence on the industry in the next five to 10 years. 
  • Claims providers are facing pandemic-related challenges and are using technology to help overcome them. Almost one-quarter (22%) of respondents ranked adapting to pandemic-related challenges as the top obstacle their organization faces today, and 40% said they believe the pandemic is the leading driver of technology adoption.
  • Despite the technology changes in 2020, the workers’ compensation industry still has an opportunity to introduce automation into the claims process. Only 23% of respondents said that their organization uses straight-through processing for 50% or more of the medical bills they manage.

Telemedicine had the most substantial impact (35%) of all technologies implemented in 2020

  • As expected, most respondents reported that telemedicine had the most substantial impact (35%) of the technologies they implemented in 2020.
  • Survey respondents also indicated that they believe both telemedicine (35%) and predictive analytics (35%) are the technologies that will have the most significant influence in the workers’ compensation industry in the next five to 10 years, compared with other listed technologies. 
  • The majority of respondents said the best application of telemedicine is or will be for provider visits (54%), followed by nurse case management (26%) and triage (21%)
  • Mobile placed at a distant third (8.5%). 

These findings aren’t too surprising, as telemedicine, predictive analytics and mobile technologies have been key focus areas in workers’ compensation for years. Prior to the pandemic, 32% of people who responded to a similar survey in February 2020 said they thought telemedicine would have the biggest impact on the industry in the future and ranked artificial intelligence and predictive analytics as the next most potentially effective technologies.

See also: Covering for a Gap in Workers Comp Data

It’s clear that telemedicine has been crucial in helping to deliver care to injured employees during the pandemic. With innovation and the addition of other technologies, such as wearables, telemedicine has the potential for broader uses in the industry and could serve a more vital purpose in helping improve claim outcomes for injured employees.

The workers’ compensation industry will see increased demand for predictive analytics 

  • Respondents list claim triage as the most popular future application of predictive analytics (35%,) followed by severity or reserving (35%), intelligent decisioning and adjuster guidance (24%) and claim automation (22%)

Indeed, these applications of predictive analytics and more will be vital for efficient and effective workers’ compensation claims processing in the years to come. From triage to automation, predictive analytics can help claims organizations get the right information at the right time to make informed and intelligent claim decisions.

Changes and pressures from the COVID-19 pandemic are the primary driver of new technology adoption

  • While 40% of respondents noted the pandemic as the top driver for change, claims organizations are still looking to solve challenges that existed before the pandemic began
  • Respondents rated efficiency (22%) as the second top driver of technology adoption, followed closely by cost containment (20%)

The workers’ compensation industry still has a significant opportunity for automation

  • Despite the rapid rate of technology adoption in the past year, less than a quarter of respondents (23%) said they automate 50% or more of workers’ compensation medical bills using straight-through processing.
  • 22% of respondents said they process 25% or fewer of their bills automatically. 
  • Even fewer respondents said their organization processes workers’ compensation claims automatically, with only 16% saying they use straight-through process automation for 10% or more of their claims, and about a quarter (24%) said they only automatically process 0-5% of claims.

Typically, an efficient workflow passes 60% to 70% of medical bills through without human intervention, and it is clear the industry still has much opportunity to reach this level of automation. Straight-through processing offers many benefits, including removing repeatable tasks from adjusters’ workloads, boosting consistency and freeing employees up to have more time to focus on complex claims that need extra scrutiny and care to help achieve better outcomes. 

While we may never achieve full automation of all workers’ compensation claims—unlike other lines of insurance, some workers’ compensation claims will always require a level of human touch. There are plenty of opportunities to boost automation now and in the future using rules engines, artificial intelligence like predictive analytics and more. As technologies become more advanced in the years to come, claims organizations will need to think about how they can strike the right balance and implement the appropriate level of automation that allows them to spend their time focusing on the claims that need special attention.  

See also: Optimizing Care with AI in Workers Comp Claims

Survey demographics

Mitchell surveyed nearly 100 workers’ compensation professionals at a range of companies, including insurance carriers, third-party administrators, public entities, managed care and risk management organizations, and brokers. The majority of respondents (75%) had 10 or more years of experience in the workers’ compensation industry.

You can find the full report based on Mitchell’s 2021 survey here.

The New Mantra for Agencies

As we reflect on all that occurred during the turbulent and chaotic year that was 2020, one thing stands out: It was a year of innovation. Virtually every business that survived, and most that thrived, innovated in some fashion, whether it was their business models, efficiency improvements or communications.

These innovations, while necessary to survive pandemic-related economic challenges, are all the more remarkable because the coming decade will represent an even bigger innovation challenge to independent agencies — perhaps more than at any other time in industry history.  

Due to the unprecedented volume of owner retirements, consolidations and even startup activity, the composition of the industry is changing rapidly. Agency business models are evolving. Forcing this change are customer demand, new ways of marketing, carrier challenges, talent shortages, a rapidly evolving economy and rapidly evolving technology.  

Evolving Technology Investments

The biggest technology challenge to confront agencies this past year was spurred by the need to isolate workforces and virtualize. Many agencies were forced to make unplanned investments in computers, software for managing a distributed workforce and, in many cases, upgraded cyber protection. For more than a few agencies, these unplanned investments were financially painful.  

It is also possible — even likely — that the useful life of these investments will be measured in months rather than years. This faster evolution of technology tools is likely to represent a new paradigm for agents who want to maintain their competitiveness. Agents have traditionally been conservative when making capital investments, typically expecting many years of service and utility from them. But those who want to stay on the cutting edge will need to adjust their mindset and acknowledge that instead of 10 years of service from a new investment, they may only see three. 

This trend clearly affects an agency’s return on investment, and it will be wise for agents to consider the impact on their bottom line. Agencies will need to grow larger and faster or accept lower margins. One piece of good news is that the technology that agencies need to invest in, whether websites, software or communications technologies, increasingly can be purchased on a per-use basis, or on a software as service basis (SAAS). This trend makes typical capital items, which are fixed costs to the balance sheet, variable expenses to the income statement.

One area where agencies will need to invest significant sums are web portals, websites and web-based communication. With customers demanding self-service capabilities with 24/7/365 communications access, agents can no longer consider a website as just an electronic brochure. Websites must be connected to the agency management system and need to allow customers to serve themselves directly in a variety of ways. 

See also: Does Remote Work Halt Innovation?

To meet these demands, today’s websites are necessarily more robust and need to be rebuilt more frequently than in the past. Where an agency might have gotten five years of effective use out of a website, in some cases even longer, the future will demand website redevelopment projects every two or three years.

Changing Business Models

As agencies grow ever larger due to consolidation and aggregation, the insurance distribution marketplace must grow more competitive. Agents will be forced to offer products, services and access that they may have avoided up until now, or face losing business at the margins to larger, more relevant competitors.  

Again, the choice will be between lower revenue, lower profits due to loss of business or potentially lower margins due to increased investment. This will force agency principals to focus on cost control, efficiency and sound business practices more than ever before. While technology-driven efficiency will lower costs as producers and service employees manage ever larger books of business, agencies will need to acquire new human capital in the form of data scientists, sophisticated business managers and data-driven marketers.  

Many observers expect the number of independent agencies to decrease from roughly 35,000 today to between 20,000 and 25,000 within 10 years. This trend is expected due to the factors discussed here, but also, in some cases, because of an agency’s failure to maintain itself as a going concern. 

Those agencies that meet the challenges and make this transition will be similar in some respects to today’s agencies. They will be serving clients who value the relationships they have and the expertise they bring. But the survivors will need to innovate to be nimbler and more cost-efficient than ever before. They will need to make more frequent investment in changing technology and in staff and become better businesspeople than ever before.