In the next few years, you'll probably be devoting more time and resources to Life and Health insurance products - that is, if you're at all like the estimated 2,000 independent agents who participated in the "Future One Agency Universe Study."
The study shows that independent agents are increasingly aware of the need to be full-service insurance providers. Agents who have traditionally focused on Property/Casualty insurance see the need to expand more aggressively into Life and other types of insurance products. In fact, slightly more than half the agencies surveyed said that over the next three years, they'll devote a higher proportion of agency resources to Life and Health products.
Processing Challenges
But Life is not Property/Casualty insurance in product or in process. Unlike Property/Casualty, no true turnkey agency system vendors exist in the Life industry. Instead, agents or insurance companies use multiple vendors and must pay someone to integrate the packages, or else they must enter the same data over and again.
An agent may use several software programs to manage the business: Contact management programs help track prospective customers; fact-finding programs help document information from an initial sales call, such as current insurance and income investments; and needs-analysis programs process these facts to calculate how much Life insurance is needed by a customer. Next, illustration software reveals the costs and benefits of Life insurance over a certain period in different variations and amounts.
Finally, the final recommendations are presented in a proposal package to the customer. This all happens before the sale!
Once a customer buys insurance, agents use database programs to manage many categories of information about customers and their families. Thanks to these software programs, agents can prospect and quote new business faster than ever. As in Property/Casualty offices, index cards and rate pages have been replaced by laptops and disks.
Total agency-management software programs are available for Property/Casualty agents. This is not true for Life agents, whose software programs come from different vendors. Even though applications are written by developers who specialize in specific application categories and agents can choose from various individual software programs, these programs do not communicate with each other. Because of this software incompatibility, agents must reenter data from the contact-management program into the fact-finder and needs-analysis programs, and so on.
OLifE Steps Up to the Challenge
In 1994, some of the leading Life insurers and software vendors came together to solve the communication problem. Their goal was to find a way to integrate data that could be used by all the various programs. The solution was an object-based technology that allows applications to communicate right on the Life insurance agent's desktop. The result is OLifE, which today is up and running, allowing software packages to share common data.
Using Microsoft's OLE platform, OLifE sets object standards for how programs can share information. With these objects, vendors can develop programs that interact with others.
ACORD was selected by the participating companies and vendors to manage the standards and the technology platform. By working with companies and vendors, ACORD has enhanced electronic data interchange and established standards for the technology.
For OLifE-compliant programs, all common information, such as name, address, and age, is stored in a single place, in a standard format. So besides eliminating redundant entries, OLifE helps prevent errors that come from entering data a second (or third or fourth) time.
Better, Faster, Cheaper
Software developers using OLifE can produce functional programs that interact with others without compromising quality. Whether employed by an insurance company or independent software vendor, software developers know that by using OLifE, their software creations will do more to help agents market insurance products and service their clients.
Craig Badger, senior computer systems analyst for Prudential Insurance Co. of America's Individual Insurance Group, Roseland, NJ, is a charter member of the industry development group that helped bring OLE-based applications to Life. Badger summarized the goal of OLifE in defining his systems department's overall mission: "We want to provide agents better software, faster and cheaper."
Demonstrating to an industry group how Prudential has successfully used this state-of-the-art technology, Badger showed an outside vendor's contact-management program working with a fact-finding package developed within the company.
The package can share information with a needs-analysis program developed by another outside vendor, because OLifE standards and platform are used.
Mike Shelby, systems director at Lincoln National and chairman of the OLifE Standards Subcommittee, compared Life before and after OLifE. "Over time, vendors and companies created software using their own standards," he said. "Programs worked differently, they couldn't communicate, they even looked different on the screen. With OLifE, training and operations will be easier. Agents won't have to worry that a key that saves data in one program might delete it in another. From a company perspective, maintaining systems and keeping them up-to-date will be much easier, too," he added.
Life insurance agents are managing information better because OLifE is up and running on their desktops. But OLifE's ultimate benefit will be its ability to integrate Property/Casualty and Life insurance system information. ACORD is working to make it happen.
The goal of the CompleteMarkets editor is to bring valuable content to the CompleteMarkets members. Providing content to insurance professionals to enhance their sales process, increase revenue streams, understand their clients and provide value to their agency.