Buy Business Insurance Agency? – Now & Then in 2018!
To buy a business, like an insurance agency or brokerage, before the advent of internet
and technology, existed different areas of buying and selling business techniques.
This was because, new business features were not even
created or imagined before the development of online technology and marketing.
Buying and selling a business in today’s market, 2018, has different
selling and buying points as compared to the previous years,
without technological advancement.
Channel of Business Communication
This is because, technology and other online channels of communication, have also progressed the insurance industry as whole.
Now, you can see a definite forward movement in the eCommerce market, as well as online websites for sale.
This progression, leads us to an article review, of how technology has transformed, not just the insurance business, but also, all general businesses and services in today’s marketplace.
So, lets begin, with an important ingredient to company success, which is the customer experience factor!
Insurance Advancement – Customer Experience
This advancement has not just touched the user or customer experience aspect of the
business-customer relationship, but, it has also shaped the underwriting process of the entire insurance industry.
As an example, insurance companies can integrate EDI,
This integration becomes a powerful player in this process.
This is because, these type of expert computer systems, would try replicating an expert in a certain industry.
This problem-solving approach to a certain field is key. Think about that for a moment,
experts being replicated and replaced by expert computer systems.
Economic Shift of Technology?
This type of technology advance, can shift the entire economic state, which it has already done so.
This type of advancement is advancing into the artificial intelligence field,
which we will save for another writing piece. But to understand the
direction that this shift is moving towards, is important.
The direction, forecast or projection of any technological changes,
provides a corporate edge on your competitors if you are a business.
So, if you were an agency owner or insurance carrier, having technology
that can reduce repetitive non-complicating reviews over insurance risks, is music to the ears.
Operation Flow and Productivity
This is would reduce labor costs in areas of low productivity, increase efficiency
and production in higher levels of expertise, and reduce human error in the process.
From an investors perspective, this type efficiency only means greater returns,
and more control over the agency book and operation.
So, this type of technology, does mean greater growth to your bottom line.
We all like illustrations, it provides a better visual and overview of a discussion.
In this expert system example, we will use a commercial trucker’s policy as case in point.
This system would transmit the data received on this trucker insurance risk application.
It would then go to an underwriter who would perform the necessary actions.
This would translate in the underwriter using the expert system to examine any underwriting conflicts.
There are so many underwriting guidelines that must be followed.
Each individualized risk has certain risk specifications and guidelines.
Since there is a chance for underwriting guidelines to conflict while being done
through manual means, having an expert system reduces this type of exposure.
Insurance Technology – The Application Process
Here’s where technology has moved the insurance industry and process forward.
Insurance carriers and general agencies, can take that electronic data in the
expert system, and match it to other vendors or sources.
This takes out the manual reporting approach insurance agents had to do prior to this system.
Reports from these 3rd party sources and other vendors, are then compared and
match against the risk in question. Again, this process was done by hand before the inception of this platform.
Lastly, all the reports pulled, including the insurance risk, would be analyzed
against the insurance company’s underwriting guidelines.
By having such an advance and integrated system, which gathers data, and makes
decisions on less complicated insurance risks, it only frees up time spent on the more complex insurance risks.
For example, if the workflow is now shifted from the less complicated to the
more complex risks due to the technological advancement,
then this digital shift has also assisted reduction in human error.
Now, more time can be spent on the more complicated cases,
this attention to more time per high risk, helps decrease any errors or oversights in decisions.
As an example, if more time is freed up for underwriters to spend
on solving more complex underwriting risk, then the less complicated, it only helps to increase the bottom line.
Rush decisions, can be costly to a business or insurance carrier.
High Risk Insurance Focus
This increased focus on high insurance risks, only furthers the understanding of the field.
This is because more time is devoted on the processes and
resolution of high risk and complex insurance cases.
Underwriters can now have more consistent resolutions to
their difficult risk cases, as a benefit from this technology.
Also, this type of technology is more cost efficient and cost effective.
This comes in the form of electronic efficiently and productivity with communication and regulators.
Let’s use an example of this advancement in action:
- The use of electronic reports for workers compensation claims
- Fillings of rates
- Electronic exchange of information about producer licensing and carrier appointments.
Insurance Technological Tool of Service
The next tool of service used throughout the insurance industry is the management of documents.
In this process of management, it allows for the making
of information to be accessible for computer use. This process is called imaging.
If you have been in the insurance industry for a good amount of time,
then you understand how drastically this process alone has changed the industry.
Technological Advances – Imaging in Insurance?
Imaging is considered a set of technologies for:
- electronic storage
- and management of documents
Not only does this new technology store and manage information,
but it also can be accessed from your computer.
Breaking Insurance News in Technology
This was amazing news when first introduced to the property and casualty insurance field.
This is because now, insurance representatives could store information for easy access.
This easy access would allow for easy recovery or transmission of documents.
It reshaped the entire process of insurance processing.
Prior to imaging, these processes were handled through the old-fashioned means.
This means photos were not taken from your digital mobile device.
This option was not even available in the days before this technological advancement.
So, imaging not only provide easy access, an organized system to
retrieve documents from a computer, ultimately improved the workflow.
Working Culture and Environment
The working environment and productivity levels increased with this technology.
Also, there were more improved functions from this electronic technology,
such as, timely response rates to information request.
We might take advantage of this function of technology at times, because we are used to it now.
However, prior to having this technology,
communication response time would be slow and not as efficient.
Instant & Direct Access
This is because technology has provided insureds instant access to their insurance companies contact pages.
There are now online chat boxes where insureds
can directly communicate with a company representative.
Also, all other company contact information is listed on website or other electronic communication.
This distributes the workflow into different channels of resolutions.
Some will go to online services where their answers will be completely resolved
without the interaction of any humans. This cuts down on
unnecessary calls and contact request into the company.
It also helps to streamline the customer experience better.
External Costs to do Business
Another area to look at the positive gains through technology
advancement is the reduction of operational costs.
Before technology was introduced to the insurance platform,
external cost to do business existed, and in many cases, were very expensive.
This depended on the volume of transactions and frequency of transactions.
Insurance operations faced such costs as:
- as filling fees,
- storing fees
- and retrieving paper documents (file cabinets and labor costs).
These costs have all been reduced or entirely removed
from the insurance operation structure.
Buy Online Insurance Accessibility and Convenience
The process of imaging has helped the customer experience and
engagement with the insurance company.
For example, imaged documents can be accessed 24 hours a day,
with no Holiday or vacation breaks, or sick days.
These documents, such as an insurance proof card are available when you need them.
This option of retrieval, is even accessible to users in remote locations so,
there are no boundaries or limitations when it comes to convenience.
Another benefit of imaged documents is, they do not risk getting lost,
misplaced or stolen as the paper version would.
So, as you can see, accuracy is also served on this plate of technology.
The Insurance Industry and The Internet
As explained, in the history of the internet portion, the
Internet and World Wide Web is a network of interconnected computers.
These computers then consist of thousands of smaller networks,
which operate as a data retrieval system.
The Web as you may know, uses a set of open standards.
These open standards help different types of computers access to an enormous
amount of text, graphics, video, audio and pictures to say the least.
It is amazing source and wealth of information and information sharing.
There are many insurance companies that have developed web sites to capture a market.
These sites have collections of related data, with easy to use navigation
and material or content related to their search.
Many carriers and independent insurance agencies are catching on to this
popular and permanent feature embedded into our future technology,
and embraced and accepted by society.
Acceptance of a system platform is key.
That is because if the user is not comfortable, right away,
with a desirable and functional website, they are moved onto the next.
Insurers Functionality with Technology
There is a functionality component to technology of course.
Many insurers websites have a variety of them.
You might have landed on some commercial insurance websites,
where you can view, print, or engage with other policy functions, such as rate a risk.
Some of these functions have eliminated the use of human intervention for example.
You no longer need to talk or interact with a human on some of the
basic functions of getting a quote, or rate a specialty risk.
Now and Then – The Business of Insurance
Prior to The Internet however, you would need to call or drive into many
This could be tiring to say the least, also costly.
This is because this method of shopping rates, did not ensure you were getting the best one.
So, there are some insurance websites that have the
most basic functions of a website, which is, to provide information to their user.
While, there are other insurance sites,
where you can purchase an online insurance policy, and even chat to a live agent.
The nice thing is, you can do this all the while you are physically doing something else.
The convenience factor of The Internet is an easy sell, if one at all.
Buying a Business in Today’s Market – Closing Remarks:
As you can see, the insurance business buying process
has changed tremendously with the new advances in technology.
It has forever changed the landscape on how insurance agencies and brokers,
and insurance companies, do business! The transaction process has been streamlined, and very
attractive with new and developing online features. These features types are now
available for these business types in 2018,
where in the past, these options were not even imagined.
This is a great time, to enter the online buy and sell marketplace if not already!
The trend is only growing, and with this growth comes an increase of business profits!
Learn more, contact a business broker today for more information on buying or selling a business.