MERCHANTS INSURANCE AGENTS DIRECTLY IN CONTROL WITH LANSA
Merchants Insurance Group, with its headquarters in Buffalo, New York, markets tailored property and casualty insurance products through over 500 independent insurance agents in the northeastern United States. Using a LANSA for the Web based solution developed with the help of LANSA business partner MindTree Software Services (formerly Linc Software Services), Merchants’ agents have improved customer service and increased productivity. In addition, Merchants has seen a significant reduction in customer services calls, eliminated the distribution of rating diskettes and reduced manual paper work.
Dr. Clark Sykes, Vice President Information Technology at Merchants, says, “Agents now directly control the insurance transaction from the point of sale, increasing both their own productivity and the service they provide to their customers. We are impressed with the flexibility and versatility of LANSA as a development tool and have recently started to re-architect our core insurance system with LANSA.”
Agents now directly control the insurance transaction from the point of sale.
The Challenge
Merchants’ primary focus is insurance for small and medium businesses, although the company offers insurance to individuals as well.
“We have the financial size and strength to meet the business challenges in our sector, but we are small and lean enough to respond quickly to customer needs and the changing market place,” says Sykes. “I am striving to maintain that same leanness and flexibility in our IT department, while we are growing our business quite aggressively at the same time.”
The small and start-up business sector forms a very large part of the US economy and is a very high growth area. Local independent insurance brokers are key to build and maintain the relationship with small businesses in their own neighborhood and add value by explaining and comparing insurance offerings, which can be quite complex.
“In the past we would send the agents rating diskettes for some of our products, which they would install on their PC. This allowed them to produce quotes, but the quotes were not always accurate. They would print out the quote and send it into us. We then re-keyed that information in WINS, where it might result in a slightly different quote. This would create a problem for the agent, especially if the WINS quote was higher than what the agent had charged his client.”
“This solution was awkward, not only because of the inconsistencies, but also because it was very labor intensive. The re-keying created a burden for us and we had to distribute updated rating diskettes at least once a quarter.”
“In many cases agents would just call us for a quote.”
“From a business perspective we wanted to provide our agents with direct access to policy and claims information over the internet. And a measure of control over managing that business.”
“We felt that the LANSA toolset allowed us the greatest amount of flexibility, rapid development and flexibility for changing needs in the future. It is the business decision that drove the selection of LANSA as the tool and then MindTree Software as our preferred provider of LANSA Services.”
I want to maintain a flexible and lean IT department, while we are growing our business quite aggressively at the same time.
The Solution
Merchants bought the base WINS package in 1994 and customized it to their own business needs. The logic in commercial lines has been especially enhanced, because its nature is quite complex and has many variables that determine how risk is assessed, coverage is provided, and the policy is priced and underwritten.
Merchants uses LANSA for the Web to extend selected information and transactions of the WINS system to authorized agents. Using the web extension agents can get quotes, issue policies, enquire on policies and claims and view different aspects of billing. Agents also have various reporting functions available and access to electronic manuals. Policyholders can view their policies and bills and pay online.
The agent creates the quote online, prints out the proposal and application on his local printer, and has the documents signed by the customer, as required by U.S. insurance law. The agent then clicks the button to issue the policy, which is then automatically imported into WINS, printed at Merchants, and then mailed directly to the customer.
“One of the most recently released major online services was commercial automobile quoting, which has been very well received by our agents. MindTree was instrumental in the development of this,” says Sykes.
“Most of our web development is done offshore by MindTree in India, but we have a state-side business system analyst who is responsible for helping us develop the system specifications. After we sign off on these, he will ship it to India for development. When the programmers in India finish their work, they send it back to him. He will then install the updates on our machine and go through a system test and ultimately give it to us for final testing. It is working well.”
“I try to maintain a balance between in-house development and outsourcing. All WINS enhancements and support is done in-house by our own IT staff.”
It is the business decision that drove the selection of LANSA as the tool.
The Benefits
“All of our business comes from independent insurance agents and it is our mission to make it as easy as possible for them to do business with us. Agents directly control the insurance transaction from the point of sale, increasing both their own productivity and the service they provide to their customers.”
“The LANSA website integrates in real-time with WINS. The two systems share the same data and the same logic. There is no duplication of data, there are no synchronization issues and there are no inconsistencies. The quotes are accurate, and the policy is issued by a click on the button.”
“We have seen a drop in calls from our agents. But more importantly, we have reduced a lot of internal manual work. We don’t have to re-key data for these products anymore. We don’t have to produce rating diskettes any more. And we don’t spend as much time following up with the agent on inconsistencies and other problems caused by the manual system.”
“Now it takes on average only one day from the time when an agent request a policy to be issued to when the policy actually gets issued and mailed to the customer. Previously this took somewhere in between several days and two weeks. In terms of customers service and time to market we have improved our record dramatically.”
Merchants has very successfully experimented with wireless claims enquiry from PDAs to policy information, using a LANSA for the web browser interface. “It worked well,” explains Sykes. “But we did it as a proof of concept only and saw little real business benefit at the time to bring it in production.”
“Most agents consider us to be technologically advanced. The website is a powerful sales tool and helps in getting new agents on board. Being able to demonstrate wireless web access adds to the power. This year we will be appointing between 50 and 80 new agents, similar to the numbers last year.”
Now it takes on average only one day to issue and mail a policy to the customer, previously this could take up to two weeks.
“We have invested a great deal over the years in what we consider to be a kind of insurance factory. We feel that we can increase our business growth dramatically without a corresponding increase in our cost to maintain the factory. The capital investment has been made, the operations cost are pretty much steady regardless of the volume of business.”
“We intend to redevelop our core insurance WINS system with Visual LANSA. LANSA’s flexibility and its ability to deploy and extend the same code to different platforms are very important to us. Additional platforms could be a PDA for example, or a Linux server or other platforms.”
“Secondly, the reusability of LANSA components will reduce the maintenance burden. So we look forward to developing applications rapidly and reducing our overall maintenance costs.”
“It would be an enormous undertaking to try to rewrite the whole WINS system in one project, so it is going to be a gradual process, which is feasible because LANSA integrates with COBOL-based WINS data and functionality easily.”
“We also have some XML integration opportunities with third parties for which LANSA integrator is ideal. For example, for commercial automobile insurance we could use LANSA Integrator to get an electronic report from the Department of Motor Vehicles in real-time, allowing us to approve an application instantaneously, instead of waiting for a fax report or email reply.”
“LANSA’s ease of use and business focus match our philosophy. We have about a dozen programmers that are split in teams by functional business unit. We need to be multi-skilled. Our LANSA skills are growing and our COBOL programmers find LANSA reasonable easy to pick-up. We will keep investing in LANSA training.”
LANSA’s flexibility and its ability to deploy and extend the same code to different platforms are very important to us.
Company and System Information
- The Merchants Insurance Group, consisting of the Merchants Mutual Insurance Company and the Merchants Insurance Company of New Hampshire, Inc., has over $175 million written premiums annually and $349 million of combined assets.
- Merchant uses an iSeries model 810 for its internal operations, and an iSeries model 820 for its website and development.
- For more information visit www.merchantsgroup.com.
- WINS is a registered trademark of AIG Technologies, Inc. headquartered in Livingston, NJ, a member company of American International Group, Inc. AIG is a leading insurance and financial services organization.
- For more information visit www.aig.com.
- MindTree Software Services (formerly Linc Software Services), founded in 1988 and headquartered in Bangalore India, has subsidiary offices in the US and the UK, and customers around the globe. MindTree Software Services
specializes in application, enterprise and Internet services around IBM mid-range, in the Manufacturing and Distribution, Finance and Healthcare industries. MindTree Software Services’s Bangalore development centre is ISO
9001:2000 certified and its resources include a fully networked environment with Domino, Internet leased lines, iSeries, pSeries and Netfinity servers. MindTree Software Services employs over 200 IT professionals. - For more information visit www.mindtree.com
