Agents Warm to STP
Insurance Networking News, October 1, 2009
Many insurance agents are embracing straight-through processing (STP) to help them quote new business quicker, slash paper and postage costs, reduce not-in-good-order (NIGO) rates and reap other benefits. Yet, others are resisting change, and before STP can truly catch fire, the three partners involved - the agency, carrier and agency management system vendor - have to be in lock-step in their drives to boost automation.
Hardly discouraged, carriers are swarming to join industry efforts to increase real-time offerings and embrace standards, while agencies are choosing carriers based on their STP services, and are awarding agents who adopt STP. STP growth has been brisk, even at a time when many carrier initiatives have stalled. For instance, Download transactions from carriers to agents, and real-time transactions from agents to carriers, increased 17% and 21% respectively in the past year, according to Stamford, Conn.-based IVANS Inc.
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WORKING SMARTER AND BETTER
When William B. Parry & Son Ltd., a nine-person agency based in Langhorne, Pa., started using straight-through processing about six years ago, eight carriers in the industry and just two carriers (Ohio Casualty and Progressive) with which the agency worked offered STP. Today more than 180 carriers have STP, and six of the eight carriers with which William B. Parry & Son works are offering real-time transactions, explains Lisa Parry-Becker, VP of William B. Parry & Son.
With STP, William B. Parry & Son can bind a personal auto or home application, or business owners' application with its management system in real time. The agency sends information to carriers, such as Ohio Casualty, that goes through their rating engines, and then returns real-time quotes back to William B. Parry & Son. The agent then quotes the coverage and issues the quote. The download populates William B. Parry & Son's system the next day with the policy numbers, forms and endorsements, and coverage information. All told, the agency has the policy in hand just days after the application was submitted through the system.
"Using real-time processes has enabled us to be an independent agent again, to serve our clients and to meet the volume requirements of our carriers," says Parry-Becker.
In the past it took her personal line customer service representatives more than 80 minutes to quote new auto or new home coverage for just one line of business. Now, this can be done in about 15 minutes.
"It has enabled us to work smarter, better, and we have instant access to information," says Parry-Becker, a fifth-generation agent at William B. Parry & Son. "It's fabulous. I don't know how we would run our agency without it."
OTHER EFFICIENCIES
Straight-through processing initiatives have led to improved efficiencies in areas such as paper and postage costs for Liberty Mutual Agency Markets, according to Peggy Scott, assistant VP and manager of marketing information management for the firm. A unit of Boston, Mass.-based Liberty Mutual Group that offers personal and commercial insurance through independent agents throughout the United States, Agency Markets received the Industry Leadership for Straight-Through Processing Award from Pearl River, N.Y.-based standards body ACORD for three straight years (2006-2008). The firm won because of its regional companies' use of ACORD XML standards and real-time processing to improve workflow and productivity for appointed agents.
Peggy Scott
Agency Markets' regional companies have released - all in real time - commercial lines quoting for business owners policy (BOP), commercial auto, workers' compensation, general liability; commercial property; first notice of loss; and inquiries for policy view, billing, claims and loss runs. Safeco Insurance, Agency Markets' personal lines carrier, offers real time quoting for auto and home through comparative raters, and also conducts inquiries for policy view, billing and claims. Both the regional companies and Safeco now offer commission statement download and claims download, as agency management system vendor capabilities have enabled such implementations.
Carriers are often wary of sharing ROI figures from STP implementations, and some metrics can be difficult for them to track in-house. Still, the benefits have been palpable. In-good-order rates are now 75% for members of the Insured Retirement Institute (IRI), a Washington, D.C.-based organization that espouses STP standards for providers of annuities and retirement products. That said, NIGO rates were 75% just a few years ago, according to Rick Heil, director of standards at IRI (formerly known as NAVA).
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