Producer Insights Part II: Meridian Insurance

The second installment of our Producer Insights series of interviews is with Chuck Stout, broker and co-owner of Meridian Insurance, a thriving full-service benefits brokerage firm located in South Florida.

Meridian offers a full menu of coverage, including personal medical, group medical, dental, vision, long and short term disability, property, business and life. Partly due to these diverse offerings, the group has enjoyed a 12% growth in business versus this time last year, even as some of its competitors have been hit by hard times. How do they keep pace with their bustling business? Mr. Stout says that a key ingredient to staying current is using the right technology to communicate with carriers and nurture relationships with clients.

Mr. Stout shares his appraisal of carriers’ technology to see how well it delivers the most important factor for brokers:  easy access to critical data.

The transcript:

Q. Which technology is most important to your work on a daily basis?
Mr. Stout: I travel a lot, so I love my Motorola Droid, which syncs with my work calendar and email addresses so I can keep up with work from anywhere. I get 100 emails per day, so being able to address them as they arrive is essential for my productivity.

For quoting, we use Norvax for our individual business and Centrax for our group business. These sites are great because we can submit the business online once, and we get quotes back from many different carriers. If a carrier we want to quote is not subscribed to either of those sites, we can usually submit the quote on the carrier’s website, but it slows us down. With both of these sites, we choose which quotes to show our clients and can send the quotes to them via email. Then they can submit the application online or email us their completed application. It’s a very clean, professional process.

Q. What other technology does Meridian use to run its business?
Mr. Stout: We have seen how technology can really help our business, so we try to stay plugged-in. For Customer Relationship Management (CRM) we use an agency management system that allows us to load contacts and keep track of communications with them. We can attach emails and faxes, which helps us in our effort to go paperless. For keeping track of our commissions received from carriers, we rely mostly on their statements and track them in Microsoft Excel spreadsheets. We are also experimenting with a service that lets us build websites on behalf of our group clients for their employees to view and sign up for benefits online. Clients love this idea and it is a good differentiator for us, but client adoption has been slow. We also recently started using Constant Contact for keeping in touch with our clients via email.

Q. Do any carriers offer mobile applications to help your productivity?
Mr. Stout: A few carriers, such as Aetna, have started to come out with mobile apps for insureds. As far as I know, there is nothing similar geared towards the broker community. But carriers do have websites that we can log in to for running quotes and servicing groups and those sites are mobile friendly.

Q. Which carriers’ technology do you most enjoy working with?
Mr. Stout: Humana and UnitedHealthcare are two carriers that have very broker friendly online sites and tools.

Q. What are some things that carriers could do better when it comes to technology for brokers?
Mr. Stout:  One thing that would be helpful would be a “one stop shop” for agents to find everything they need. Right now, some carriers have different sites for different activities. I might have to go to one website for enrollment, but a different site with a different username and password to view my commissions. If carriers could combine all activities into one site, it would make things much easier.  Another thing that would help me in servicing accounts would be real time insight or regular reports on my clients’ billing status. Occasionally a client forgets to pay a bill and their coverage gets cancelled, causing us to have to go through the re-enrollment process.  It would save everyone time and energy if I knew a client was late in paying and could give them a quick call to check in.

Q. How do you expect healthcare reform to impact your business?
Mr. Stout: We’re a bit concerned about the future. In the near term, things look good; but we expect that in the next 3-5 years, brokers will be doing more work for less money. Employers will need more service and have more questions, and individuals are entering the market that may never have purchased insurance before, so they will really depend on the broker as an advisor. It may take extra education and effort, but we’re not getting any extra commission for that extra work. It will be more important than ever for us to rely on technology so we can be as efficient as possible and service a higher volume of clients. Luckily, Meridian has a good amount of diversity in product offerings, and many clients have all their different types of coverage through us. When we start to see less commission for health products, we’ll know that we have to sell more of the other types.

Q. How are you preparing for changes ahead?
Mr. Stout: I’ve been actively sharing information in my accounts and in the community about how health reform will impact employers and their health insurance so they can be informed and prepared. Besides that, I feel that the way we do business now is well suited for a post health reform world. We have a strong idea of what type of firm we are and what type of clients we want. We don’t want to be the Wal-Mart of insurance; we’re not a good fit for people who are looking for nothing more than the lowest quote around. We’re the brokerage for people that want advice, good service, and a full explanation of their options. We always take the time to create a detailed and professional proposal when delivering quotes and treat every client like a VIP. That’s important because we have a very strong referral business; we actually don’t advertise or market at all. Through networking and getting involved in the community, we can find the right type of client that will value our advice and continue a deep and lasting relationship with us.

Q. What trends have you observed in the commission statements and incentives you receive from carriers?
Mr. Stout: On our statements, many carriers indicate the total premium they are compensating us for and what the commission rate on that business is. With those types of statements it is easy to see how our commission payment has been calculated.

As far as commission and incentive trends, I’ve seen a lot of carriers cut base commissions but offer bonuses for volume and client retention to reward agents that have larger blocks of business with them. I understand this because it motivates the high performers to sell even more. Plus, the carrier gets to identify the brokers they most want to work with, and give a little less commission to lower performers. Also, some carriers give reward vacations and sales trips. These are fun, but I feel I speak on behalf of all brokers when I say that we would much rather have the money so we can go on our own vacations with our families, instead of with other brokers who may be our competitors.

Q. What advice do you have for carriers looking to improve their commission statements and agent tools?
Mr. Stout: Our statements usually include the total premium we’re being paid on, but they don’t have information on the number of covered lives. It would be great to be able to see the number of enrollees, as well as their dependents. It would also be wonderful to see some more in-depth analysis into the commissions we’ve received from our groups, like a year over year comparison of commission per group. And this information should all be available online, so I can get to it whenever I am interested in reviewing it. We brokers are constantly on the go and looking to reduce paper, so carriers need to have good online sites that are easy to use and have all the information we need in one place.

Tags: technology for insurers, producer relationship
Categories: Insurance Technology
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Takeaways from the 2010 ACORD LOMA Insurance Systems Forum

During this year’s sessions, the discussions centered on the technology imperatives for carriers and agencies to help lead them through these ultra-competitive and fast-changing times. Three points from a trio of industry analysts nicely summed up the direction that carriers need to focus:

• “Insurers should invest in IT for capability more so than cost efficiency.” – Matthew Josefowicz, Director, insurance, at New York-based Novarica
• “Being fast doesn’t help if you have the wrong product mix.” – Kimberly Harris-Ferrante, VP & distinguished analyst at Stamford, Conn.-based Gartner
• “Insurers need to think more about the big picture, and use that to make tactical adjustments.” – Craig Weber, SVP at Boston-based Celent

There is additional emphasis on technology being customer centric and improving distribution channel productivity. We’re already witnessing a strong pace of core system replacement amongst carriers with more stable and agile systems able to accommodate future growth. Today, this flexibility is a norm in the functionality of the systems.We also observed a renewed focus on straight through processing with the intention of reducing transaction friction to ensure agents’ focus remains on selling.

Additionally, technology should provide a platform for agents to take on diverse roles and be more flexible with their sales efforts. Utilizing the services of Customer Relationship Management as a part of their internal systems seems like an old idea, but it’s still not deployed uniformly through the industry and is one of the most reliable returning technology investments. Equipped with the right insight, both product specific and customer specific, agents can establish their value as insurance advisors, resulting in greater customer loyalty.

In a nutshell, the major takeaways are:

• Agile and capable systems
• Growing and diversifying distribution channel
• Utilizing CRM
• Carriers focusing on loss prevention rather than solely on loss reimbursement

Tags: acord, technology for insurers, customer relationship management, crm, distribution channel
Categories: Insurance Technology
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VUE Software at the 2010 ACORD LOMA Insurance Systems Forum

The 2010 ACORD LOMA Insurance Systems Forum is right round the corner, and we are excited to participate in meaningful dialogue about emerging insurance technology. As an active member at the forum, VUE Software plans to showcase its role in providing extraordinary results to agencies and carriers through cutting-edge solutions.

Carriers and agencies who have implemented VUE Software solutions have experienced gains in agent and broker productivity, performance, and customer service. With VUE Software, agents get the ability to sell multi-carrier, multi-line products and still feel like they are working with a single carrier. Agents can improve their operational efficiency as they can monitor everything from quoting, managing compensation and client bases to performance tracking in a single window.

Backed by service oriented architecture and web services, VUE Software solutions are designed to help insurers confront today’s economic and business challenges. Carriers can continue improving their operational efficiency well into the future as the solutions remain scalable and flexible to accommodate changes and business growth.

A huge advantage for carriers is the ease with which VUE Software solutions can integrate with multiple systems. Case in point is a recent project where VUE Compensation Management was integrated with many diverse systems, including Microsoft Dynamics CRM, at Insphere Insurance Solutions^sm, the largest independent career agency distribution group with a sales force of approximately 3,000 agents nationwide.

At the conference, you can hear straight from Jeff Walker, VP of Corporate Strategy of Insphere Insurance Solutions^sm about the value of their platform through their presentation titled Customer Relationship Management:  The Key to Supporting a Collaborative, Customer-Centric Model. Each attendee of this session held on Tuesday, May 26 at 3:00 PM PT will receive a free flash drive and will be entered to win a prize. I look forward to meeting many insurance professionals at this event.

Tags: incentive compensation management, technology for insurers, customer relationship management
Categories: Incentive Compensation Management | Insurance Technology
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Producer Insights: Part I

This article is part of a series of interviews with insurance agents and brokers about carrier technologies that impact their business. Stay tuned for future articles.

When Sandra Anderson, Office Manager of Vermont Brokerage Services, says that her firm truly cares about placing their clients with the best coverage for them, you believe her. Perhaps it’s because Ms. Anderson, a native of Boston, has been in Vermont long enough to assimilate into the culture of genuine niceness that Vermonters are known for. But beyond just being nice, Vermont Brokerage Services’ dedication to helping their customers also makes firm business sense.

The following is the transcript of an interview with Ms. Anderson about her views on why personalized service is here to stay and which carrier technologies are best.

Q. In addition to offering group health, life, disability and retirement financial products, some of your brokers are also assisting clients with enrollment and helping with HR issues such as COBRA applications. How does that affect your relationship with your clients?
Ms. Anderson: Our clients like to work with us because they get personal attention from their brokers. We even help represent them when dealing with carriers in the event of a claims or billing issue. As a result, we retain a lot of clients and keep longstanding client relationships.

Q. How do you process commissions?
Ms. Anderson:  We receive monthly statements from the carrier, and then we enter the information into our in-house system to calculate our brokers’ commissions. Processing the statements can be difficult because each carrier’s commission statements are different. Some carriers don’t list all the information we need in a convenient place; for example, the broker’s name won’t be listed in the same place as the policy information, so it takes us more time to sift through the paperwork to find the information we need.

Q. Which carriers are the easiest to work with in this regard?
Ms. Anderson:  Blue Cross Blue Shield of Vermont’s commission statements are the best. When we’re entering information into our system to pay our agents, all the information we need is right in front of us so it’s easy to enter in quickly. However, most carriers are making strides in this area as they update their technologies.

Q. How do you use technology in your business?
Ms. Anderson:  Our in-house system helps us enter and track all our carrier’s commissions, as well as our payments to our brokers. Some carriers have online sites where we can login on behalf of a client to help manage their enrollments. It would be great to see more carriers using similar technology.

Q. What technology challenges do you face?
Ms. Anderson:  It’s difficult for Vermont Brokerage Services to stay up to date on our clients’ policies. If there have been changes in our clients’ accounts that we didn’t know about, it’s usually not until we get the commission statement that we find out. Even then, there’s no way for us to verify the changes are correct; we just have to trust the carrier. It would be great to be able to go online to access this information.

Q. What is the current state of your business?
Ms. Anderson: Commissions and bonuses seem to be dropping among nearly all the carriers we write for. Some carriers offer incentives to clients to write directly with them instead of going through a broker. However, when this happens clients are usually not aware of the type of agreement they are entering into, and are usually disappointed.

Our clients come to us saying, why isn’t our COBRA being managed anymore? It’s because they’re working directly with the carrier.

Carriers are just too large to give groups the personal attention they want. That’s the difference a broker can make. We represent our clients’ interests and are the conduit to the carrier to make sure everything’s fair and everyone’s happy.

Tags: technology for insurers, producer relationship, commission processing
Categories: Insurance Technology
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Value-Driven Partnerships maximize ROI

We’ve talked on our blog about how a great carrier-producer relationship can become a game changer. Similarly, a strong and mutually beneficial partnership with software vendors can bring drastic results for carriers in the long run.

A recent report by Celent¹ states that the most valued vendor partnerships are “long-term, strategic engagements in which a vendor is leveraged to bring in new expertise, add both technology and domain knowledge to the business, and is relied on as a true partner.” 

When evaluating new tools to improve processes and operational efficiency, carriers should look for vendors that bring home more than just technical expertise. Vendors who can create a comfort zone for carriers with coordinated communication throughout the partnership and genuine business domain knowledge are the most sought after for value-driven partnerships.

Every insurance segment, be it Life, P&C, Health or Managing General Agencies, typically involves complex administrative processes. Today, with the proliferation of highly-skilled insurance-specific technology vendors, insurance companies need not turn to a vendor that doesn’t fully ‘get’ the complexities of their business. Insurers are free to pursue value-driven partnerships with vendors who understand their respective industry’s workflows, business rules and regulatory compliance measures. This not only ensures the smooth exchange of requirements but also delivers a solution that is in line with the company’s existing business model.

With complexities and individual differences among insurance companies, it’s important for technology solutions to be flexible and adaptable, instead of forcing companies to work around their technology or to adapt their processes to fit the way their technology works.

From requirements to deployment, to post-implementation follow-up, vendors need to play a proactive role to make things easy for carriers. Selecting a software vendor that possesses industry expertise and follows defined processes will allow insurance companies across verticals to realize high-value vendor relationships and maximum ROI.

¹ Insurance Networking News. “Analyst Firm Profiles 34 Insurance IT Service Providers.” April 9, 2010.

Tags: technology for insurers, progressive software vendors
Categories: Insurance Technology
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