Agencies frustrated by myriad rating options may find relief in MI-Assistant

Ten years ago, a CSR or a producer in any then-well-automated agency could give a prospective client or a renewing client a quote for the next year's policy premium in a matter of minutes if the agency had invested in an agency management system that included integrated comparative rating software.

Over the years, that same CSR or producer has probably seen comparative software support fewer and fewer carriers' rates. Today, agency staff may use the comparative tool, but they will also have to input the same rating information into several proprietary rating software products or sites. The extra work and steps may take half an hour or more. That's a big time drain in an eight-hour day and it is not unusual to hear a CSR confide that rounding accounts has become less likely because obtaining comparative rates is such a time-consuming process.

One wonders about an industry that uses technology to make pricing its product at the point closest to the client more difficult. Some agency staff express the belief that comparative rating is dead and only company-specific proprietary rating is viable into the future. Solutions like Transformation Station and TransactNow have given agencies options for look-ups of claims and billing information straight out of their agency management systems, but have disappointed many agencies because carriers have been slow to support access to their rating engines. Single-entry solutions, like Transformation Station and TransactNow, are technologically complicated for premium quotes that are dependent on data that may not be collected on an ACORD app, not to mention credit scores, CLUE reports (that may differ between the same carrier's auto rates and homeowners rates), and MVRs-but single-entry solutions will eventually work.

"Transformation Station and TransactNow are the 'next wave' for many agencies and carriers, but small regional carriers that are critical to a majority of American agencies are not always tech-savvy or willing to invest in Transformation Station or TransactNow development," says Marty Agather, an industry veteran who is vice president of sales and marketing at MI-Assistant, a division of Fiserv FSC, Inc. "Many carriers don't think of doing things that work for an agency in a multi-carrier world. They emphasize a proprietary rating process, rather than recognizing that a collegial, integrated model could save the agency time and effort-and how much more new business that would allow the agency to write."

In that environment, there is an opportunity for a comparative rater to be the useful "middle man," taking information from the agency management system. Agather breaks down the components of success for comparative rating as dependent on two things-workflow and accuracy.

Work has to flow

Integration of data is only part of making workflow work. In addition to that, the credit score, the MVR, and any CLUE reports required by the carrier's rating plan have to be a built-in part of the rating process. Any rating software that will solve the rating challenge of the independent agency has to reflect the real-world workflow at the CSR's or producer's desk.

An upgrade of the agency management system's software to a new version can throw integration with rating out of whack. "Even when we were First Rate and part of Applied Systems, we couldn't get advance notice of changes in a new version that would affect our rating integration," Agather recalls. While it is not unreasonable to expect the agency system vendor and the rating vendor to require its programmers to stay in touch, it is inevitably up to the agency to check if its rating vendor has accommodated the changes that its agency management system vendor made in a new version before it upgrades. Even if the agency is accessing rating via Transformation Station or TransactNow, the wise agency makes sure that the integration of data has been "real-world" tested before it jumps into a new version.

Accuracy

MI-Assistant uses the same rating formulas (algorithms) used by the carrier's own rating engine. It is certainly possible that the comparative rating software could access the carrier's rating engine, but Agather sees that as a secondary step, after the software uses the MI-Assistant algorithm to do the multi-limit, multi-deductible options, going to the carrier rating engine only as a confirmation of the finally chosen options' premium. "Carrier systems were not designed to quote options, but ours was, so it is just faster," explains Agather. MI-Assistant is so sure of its working relationship with carriers and implementation of its rating logic that it guarantees the accuracy of the quotes it produces to the tune of $300 per policy to indemnify an agency that has to make up a premium difference to an under-quoted client due to an error in formula or programming or data integration (but of course, not from mis-entry of information).

Agather came to MI-Assistant in conjunction with the company's acquisition of the Rating Division of Applied Systems, originally known as First Rate, back in 2002. Tasked with creating relationships with carriers to support both workflow integration and accuracy, Agather relates coming to the conclusion that it was "mind-bendingly wrong" that the carriers were paying nothing to support something that was needed for them to write their next policy-rating. From that, the "Carrier Partner" concept was born. It was built on the proposition that agencies that relied on and liked comparative rating had one thing in common: they represented a core of carriers that worked closely and collegially with the rating vendor.