Real-time to the rescue: the evolution of real-time SEMCI is helping to improve agents' work flow. (SEMCI: Technology).

Like most insurance agents, Donna Barr has struggled for years with the difficulty of having to learn how to navigate through multiple carriers' proprietary software systems, remember a dozen or more passwords and user identifications, and re-key information into each system.

For years, many agents and carriers envisioned single-entry, multiple-carrier interface as the solution to this problem, but now many believe the evolution of SEMCI into real-time interface is the answer that will help them save both time and money.

Making the Connection

The technology connection between agents and carriers has changed over the past several decades. Thirty years ago, agents relied on green screens--nongraphical, coded computer displays with green text on a black background--to rate, issue and maintain policies. During the 1980s, multiple terminals, each dedicated to a different carrier, were set up in agency offices. "Today proprietary Web sites are often viewed by agents as not much different than the green screens of yesterday, only they look better. Now, however, standards are better equipped to address some of these issues," said Rick Gilman, vice president of the Association for Cooperative Operations Research and Development.

Because many agencies represent, on average, eight to 10 carriers or more, the daily challenge of having to log onto each unique system has been a constant struggle for agents and brokers. According to ACORD's User Groups Information Exchange (AUGIE) survey of nearly 9,000 independent agency personnel, about four out of 10 respondents said their greatest automation challenge is learning or using various company proprietary systems, with 37% saying their greatest challenge is the time/expense of keeping up with changing versions, and 15% citing the time/expense to educate and train staff.

"One of the toughest things for brokers when dealing with different carriers is that most have different ways to get online and navigate around their systems," said Wayne Morris, a broker with Life of the South Agency Inc. in Atlanta. He currently represents about 40 different carriers, each requiring a unique password and user ID. "It's a very time-consuming process going from one site to the other."

Because agents have to learn quoting systems and inquiry systems of all carriers, they believe it's much easier to have just one set of screens to become familiar with to quote or service business, said Tom Trueschler, director of e-commerce and agency interface for the St. Paul Cos. The company recently adopted AMS Service's TransactNow to offer real-time transactions to agents.

In addition, coding of proprietary systems, turnover of employees requiring additional training and increasing costs for technology are adding to agents' difficulties in connecting with multiple systems.

Moving to Real-Time

The difficulties, however, may be about to end. SEMCI has evolved into real-time transactions between agencies and carriers to make things more efficient, said Barr, assistant vice president at Marsh and chairperson of Applied Services' ASCnet Interface Committee.

Agents already connecting with carriers via a real-time system believe it has value in helping workflow for both personal and commercial lines. According to the AUGIE survey, 63% of respondents strongly agree that it will help with quoting functions, while 51% strongly believe it has value in issuance.

Although the industry believed SEMCI was the solution to connecting agents and carriers, the SEMCI batch interface made it difficult to synchronize editing and business rules and accommodate company-to-company differences. Real-time interactions, also referred to as real-time SEMCI, allow agency management systems to synchronize information with carrier systems, as data requirements are addressed instantly and applications are shared between systems, similar to a phone conversation.

"SEMCI isn't dead--it's just changing," said Doug Johnston, executive vice president, WARP interface services for Applied Systems. "SEMCI occurred during the '80s with upload so agents could enter a piece of business and then electronically send it to anyone in an ACORD AL1 format." Real-time SEMCI, which also allows agencies to key information only once and transmit it to multiple places, is speeding up the process and becoming more robust with extensible markup language, he said, adding that real-time has also allowed vendors to create new types of SEMCI transactions, such as time-sensitive billing, claims and policy inquiries, which simply didn't make sense without real-time.

"Insurers put CRM--customer relationship management--in front of 20 or more different back-end systems to enter it once, and why should agents be any different? Insurers put Web sites in front of their back end to make it easier for agents, but that only solves data entry for companies because agents still have to perform data entry and enter it multiple times," said Johnston.

Through real-time interface, which is based on the ACORD XML standard, an agency system prompts for a data field and then asks the company system to apply its editing rules and send back an approval or an error message. Agency software can collect the information required to rate a policy and then transmit it to the company system, have it rated and then get back the answer, according to "A Vision of the Future for Agency Technology," by the Independent Insurance Agents and Brokers of America's Agents Council for Technology

For example, Ivans Inc.'s Transformation Station is a managed Internet data exchange based on ACORD XML. Agents are able to work directly in their agency management system for multiple carriers for transactions such as billing and claims inquiry, personal and commercial lines quoting and first-notice-of-loss reporting. Data is sent from the agency system to Transformation Station and is translated and routed to the carrier in the ACORD standard format version they need. It also uses Web services to authenticate and pass credentials about the user. The carrier responds to the agency in real-time with, for example, a billing or claims status, a frilly-rated quote, or in the case of loss reporting, an acknowledgement or claim number. "Because agents can work directly in their agency management system, there is no re-keying of information, and they don't have to manage passwords and user IDs for multiple company systems or navigate through different proprietary systems,' said Janice Sheffield, divisional vice pre sident of marketing and customer services for Ivans.

Other vendor systems, such as Ebix's unified direct-bill inquiry system, AMS Service's TransactNow, Strategic Insurance Software Inc.'s SEMCI Partner, and Applied Systems' use of Ivans Transformation Station, have made huge leaps into the insurance industry.

In March, Ebix launched its new unified direct-bill inquiry system to provide agents instant bill status via the Internet. The system simplifies the direct-bill status process by giving agents a single interface that provides access to multiple insurance carriers with a single master password and log in. "Agents were screaming single-entry, so were connecting the dots by combining agents' desire for SEMCI with the carrier's desire to have the agent use the carrier's proprietary Web portal," said G. Barry Klein, director of ebixExchange, Ebix's implementation of Microsoft's .NET technology to provide a series of products and services to carriers.

"SEMCI has been the holy grail we've been after for many years, but with only limited success," said Roy Riley, chief operating officer for Peel and Holland Financial Group in Benton, Ky. Rather, he believes the Internet has opened the door to enable meaningful transactions for agents via real-time SEMCI. "It may not be the purest form of SEMCI that many people have thought about for the last 20 years, but I think it will add meaningful transactions for agents rapidly onto their desktop."

While many agents hope that carriers' Web sites will fall by the wayside as a result of real-time interface, some industry experts remain skeptical. "You'll never see the company Web sites go away;' said Keith Savino, chief operating officer of WRG and president of Arias, Ebix's user group. "Not every agent has an agency management system; some rely on carrier Web sites as the cornerstone for information. Additionally, carriers get an opportunity to promote their identity and brand through their sites."

Positive Results

Real-time SEMCI is not only adding efficiency to work flow but also saving money.

Peel and Holland's Riley believes the cost savings achieved from real-time SEMCI can be significant. "It's going to take that type of functionality for me to achieve my goals of driving revenue per employee that I have put in place for my agency for the next five years, and we're not going to get there handling and processing business the same way we do today or have done during the last several years."

Because real-time SEMCI frees agency staff from having to navigate through numerous systems, they are then able to perform other functions and grow new business. "We found that real-time can save anywhere from two minutes to 20 minutes for each transaction," said John Day, senior vice president of carrier and industry relations for AMS Services Inc., based in Windsor, Conn. And because agents perform hundreds of transactions daily, this results in tremendous time savings, which equates directly to the bottom line and exemplary customer service, he added. "Agents and customers don't have to wait for a call back. They get an instant response, which is something we've come to expect in this Internet world."

While start-up and maintenance costs are hindering some carriers from implementing real-time interface systems, many industry experts believe these expenses are only minimal. There is generally little to no cost to agents, and carrier expenses may include a per-transaction fee and an initial licensing fee, said Marsh's Barr. "However, I believe we're starting to get past these issues with many carriers, and the more we have on board, others will begin to see that cost is really not an issue."

For example, costs are minimal to agents logged on to Ebix's unified direct-bill inquiry systems. Agents are charged $5 per carrier per agency, with a minimum fee of $25 per agency per month. There's no charge to carriers.

"Light 'Em Up"

In October 2002, Applied Systems, Ivans, and eight insurers, including Acuity, Encompass Insurance, Kemper Auto and Home, Ohio Casualty, Progressive, Hartford, St. Paul Cos. and Travelers, teamed up to enable real-time interfaces for 7,500 independent agents through Ivans Transformation Station. Together the insurers and the agents they do business with through Applied Systems equated to more than 15,000 trading partner relationships, said Ivans' Sheffield.

To initiate the "Light 'Em Up Campaign," the eight insurers provided real-time functionality with all of the Applied agencies representing them, and Applied then created a wizard to permit an agency to turn on the functionality on an automated basis. Some of the functionalities for initial real-time interfaces included billing inquiry for personal and commercial lines, auto/home/package quotes and first-notice-of-loss reporting.

More than 28 insurers have now licensed Transformation Station for real-time communications with their agents and brokers, said Sheffield. Since the initial campaign, additional insurers have been added, such as Royal Sun Alliance, as well as DORIS users and AMS agents using WebSEMCI, a forms development and edit engine. The trading partner relationships have grown to more than 30,000, and Instar agents will be added by June, she said.

Since its initiation, agents and carriers have noticed considerable time and cost savings. One insurer has reported that it saves $3 every time an agent makes a billing inquiry through the agency management system using Ivans Transformation Station rather than by calling the company.

Applied Systems also noticed considerable success with a 40% month-to-month growth. Each month new companies are going live and existing companies are turning on additional transaction types, such as policy rating and policy issuance, said Applied's Johnston.

Fast Forward

Agents believe use of real-time SEMCI will grow in the future.

"You will initially see a lot of activity because of the new ability of real-time inquiry transactions and working with multiple vendors/carriers at once," said WRG's Savino. "The agency management system vendors that are listening to customers, supporting ACORD standards, putting in real-time interface and not limiting it to just data, but everything else, will succeed."

In addition, vendors are now working on adding endorsements to the list of functions achieved by real-time interface systems. "Endorsements are probably the No. 1 transaction agencies perform day to day, and anything that we can do to make that process more efficient will greatly benefit the process," said Riley of Peel and Holland.

The Agents Council for Technology believes it's critical for agents to use real-time interface when systems become available from the companies they represent. Carriers not yet tied into real-time interface continue to keep a close eye on if and how agents are using it. "It's a 'use it or lose it' approach--if agents don't use it and continue to use proprietary Web sites instead, then that's what companies will choose to do," said Yates. "And while some agents wait until all companies are hooked into the interface, we believe that will only slow down other carriers from adopting it, and they will miss out on the benefits of saving time and becoming more efficient."