Paper free in 2003?

Rough Notes, Oct 2003 by Doucette, Nancy

The deluge of paper that's inundated the industry is on the verge of subsiding

"There's a slow, slow train comin' up around the bend."

-Bob Dylan

While Bob Dylan wasn't talking about the insurance industry going paperless back in 1979 when his "Slow Train Coming" ballad was released, reducing the amount of paper that courses around the industry has, in fact, been a goal for almost that long. It's been a slow train coming. Veterans of the insurance industry will recall the slogan: "Paper free in '83." Here we are, two decades after that non-event and the movement is starting to gain momentum. Carriers are shutting off some of the paper that has traditionally gone to agents.

Thinking of this in terms of the life of a redwood helps put the apparent slow progress into perspective. "It's relative," quips Jeff Yates. However, as executive director of the Agents Council for Technology (ACT), Yates doesn't take this subject lightly. Several months ago, ACT, which is affiliated with the Independent Insurance Agents and Brokers of America, released a document titled "Turning off the Paper to Agents" in which the key responsibilities for carriers, vendors, and agents are laid out. The document was compiled by an ACT work group made up of 18 representatives from agencies, carriers and associations.

Why bother? According to the document: "... the overall efficiency of the Independent Agency System will benefit from the elimination of paper being sent to the agent, provided carriers follow certain procedures in implementing this change and continue to provide this information to the agent in an electronic format in a manner that is convenient and efficient for the agent."

Travelers Property Casualty has been a leader in the paperless initiative. Bruce Fiori, 2nd vice president, agent/field automation for Travelers Property Casualty, points out that there are obvious benefits to an agency's bottom line when the agency moves to a paperless environment. "By implementing paperless initiatives, an agency will be able to spend less time opening the mail, T-filing or manually filing paper in an insured's folder, and will be able to devote less space on-site or off-site to store policy paper, unless required to do so by regulation. An agency that's currently scanning policy paper would no longer have to absorb the time and expense for that process," he explains.

If your carriers haven't broached this subject with you yet, they will in the foreseeable future. "Going paperless is a major trend on the part of carriers," Yates observes. "The major carriers are moving in this direction."

About a year ago, Chubb & Son began informing many of its agents that personal lines paper would be shut off in the not-too-distant future. Mark Galante, assistant vice president of Chubb & Son, and e-business manager for personal insurance, recalls that last October, Chubb initiated a download promotion campaign, contacting those agencies that weren't using download and alerting them of the upcoming initiative to discontinue sending agencies copies of certain personal lines documents. Galante says the campaign's success is reflected by Chubb's receiving the Download Company of the Year Percentage Growth award from ACORD and, most recently, the Download Partner of the Year award from the Applied Systems Client Network (ASCnet).

Industry recognition and agent response didn't come without effort on Chubb's part, Galante notes. "We improved and enhanced our download by recertifying with the major vendors and downloading additional information such as underwriting and premium modification, knowing that we and a lot of our agents want to go paperless," he says.

For many agencies, though, their interest in download is tied to what MeLe Fuller refers to as the savings experience. Fuller, who oversees agency interface and industry standards for Safeco, chaired an ACT work group that examined agent concerns with data accuracy and consistency in download. "Download is particularly advantageous on personal lines renewals," she explains, "where the policies automatically renew. The agency simply doesn't have to key the data. Download offers not only support of a paperless environment, but time and savings-time savings, therefore money savings-for the agency."

Syracuse, New York-based Haylor, Freyer & Coon, Inc., appreciated download's efficiencies early on. The agency has been downloading for some 15 years and currently receives download from 10 carriers, according to Cyndy Smith, vice president of technology. She points out that agency leadership needs to recognize when and how technology can benefit the agency. "Agencies need to find ways to take advantage of the technology to meet the needs of the agency," she says. "It's a mindset."

But once a technology decision is implemented, that shouldn't mean it never gets re-examined in light of emerging technologies. About two years ago, Bob Palmer, vice president of personal insurance for Haylor, Freyer & Coon, became intrigued with the idea of taking the personal lines area of the agency paperless. He recalls wondering about all the paper arriving from download carriers that still required processing time. As the carriers began providing the agency with access to the necessary information online, Palmer worked with staff to determine what information was needed from the carriers in order to go paperless. "As of now, we aren't processing any paper from any of our download carriers," he says. "That's enabled us to shift people to more sales-related and high-level service oriented jobs, rather than just processing."