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Last Word: The right tech tools for the job

Last Word: The right tech tools for the job

As a benefits team working within a property/casualty insurer, have you ever felt technologically like you've been given a hammer to tighten a bolt? You're not alone. Most benefits brokers use generic customer relationship management computer systems or systems specifically designed for P/C applications. Those systems are not well suited to their needs.

The reasons are obvious. As a broker who sells group health and other benefits programs, your products and processes are significantly different from those of your P/C counterparts. Quoting and presenting plan options is arduous and time consuming, the number of claims per client is higher, you often provide services directly to employees and commissions are uniquely complex.

Until recently, there was not much choice. CRM technology for benefits firms was immature compared with P/C systems and provided limited value. But this has changed over the past few years. Technology tools for the benefits broker have specialized and matured to the point where they now can generate real productivity gains.

Because of this, brokers are now rapidly adopting this new breed of "practice management technology." These tools leverage the traditional concept of a client database and then add true workflow solutions unique to a benefits practice. Their ultimate value is increasing productivity while improving quality of work and reducing costs per client.

Since the vendors who develop these systems specialize in supporting brokers dealing with benefits, they understand your business and can fine-tune training and best practices for you.

Naturally, benefits teams within P/C firms have been the slowest to adopt a true benefits practice management system. The main objection is the insistence that the entire firm utilize a single platform. While this would be ideal, the reality is that there exists no real single solution for all lines of business. The single platform is invariably a P/C-centric system with limited (if any) functionality dedicated to the peculiarities of benefits.

A variation of this line of thinking is to limit your search to solutions that integrate with the current platform. Experience shows us that most of these cross-vendor integrations have complexities and limitations that make the solution little more than marketing hype.

Instead of an unrealistic mandate for a single platform, a more reasonable approach is to evaluate the advantages and disadvantages of going with an independent system for your benefits practice. Compare the savings and productivity gains made possible by a system that addresses the quoting, service, renewal and commission processes unique to benefits against the additional cost of maintaining some data in two systems.

Of course, no one likes the idea of having two systems, especially the IT department. With two systems, there are possible redundancies, the need to master and integrate multiple platforms, and added costs. Despite these, remember that most P/C systems can track very little on your benefits business. You need to identify what the minimum data entry would be to keep your P/C database complete. Then determine how long per client this would actually take (for instance, once a year on renewal). Weigh this against the advantages gained by using a benefits-centric solution. Is it worth it?

You'll also need to ask yourself: "What are my competitors doing?" Independent benefits firms are not held back by a limiting internal system. They are utilizing available technology to become more productive, provide higher levels of service and reduce per client costs. Another consideration is that if margins per client decrease, having specialized automation will better position your business to remain profitable and still deliver the level of service expected by your clients.

Do not accept using the wrong tools for the job. Go out and evaluate the new practice management systems for benefits brokers. Examine how these products can help propel your business forward. Assess the additional overhead they may create, but balance this with their advantages. Most importantly, make sure you have the right game plan to keep your practice competitive as technology moves forward.

Jim McCallion is vp of advisor systems at Uniondale, N.Y.-based OnlineBenefits Inc., an A.D.A.M. company. In this capacity he manages AgencyWare, a practice management system for benefits brokers.