Insurers look to technology to increase efficiency

The Internet was supposed to revolutionize the way consumers and businesses shop for insurance. While that hasn't exactly happened, the Internet is having a big effect on the industry behind the scenes. Traditional brokerage and insurance carriers say they are using the Internet and other technology to transform the way they process applications, maintain accounts and handle claims. Officials at Aon Risk Services, a unit of Chicago-based Aon Corp. with offices throughout Orange County, have spent five years designing and implementing software to help brokers, underwriters and consumers communicate with one another online. "Technology is taking over," said Gary Hanson, a local Aon executive. "We've spent a lot of money to be able to talk to offices all over the world."

But just as the Internet hasn't replaced local insurance brokerages, companies face challenges in the back office as well. With the possibility of losing customer information through hacking, a virus or even a tree branch falling on a transformer, the quality of information systems among insurance companies needs to constantly improve, experts contend. More issues arise as customer information gets packaged into easily marketable databases. Online marketers and telemarketers are willing to pay big bucks to get access to client lists of companies. But not all customers are comfortable with having their data bought and traded electronically. One OC company that hopes to help insurance brokers integrate technology into their operations is GoApply.com of Costa Mesa. The company provides online application and delivery sites for individual brokers, according to co-founder Brian Horn. Horn hopes to be able to help insurance brokers and carriers deal with hoards of paper, from physician statements and motor vehicle reports to financial records. "We create one heck of a lot of paper in the office," Aon's Hanson said. Much of that documentation already is being stored electronically, but there still is a large number of reports and records that need to be maintained in a physical warehouse in paper form, Horn said. "Right now, when I write an insurance case, I have to complete an application by hand and have to get 10 to 12 signatures and keep physical copies for seven years," Horn said. "Those copies get overnighted to general agents and they keep physical copies and send it to the carriers who have to keep that on file. We have to order DMV reports and keep them on file and doctors' reports are sometimes five inches thick. We have to collect two years of 1040s and W2s and balance sheets. Technology will bring the ability to transfer without snail mail or overnight mail. We can save a whole bunch of trees." Companies also are trying to make the delivery of products and services available via the Web. The sooner brokers can retrieve a customer's information and write policies, the sooner they can collect commission checks and get on to more business.

With the signing of the Electronic Signatures Global and National Commerce Act being in June, the distribution of contracts and records online becomes easier for the insurance companies. The bill provides that electronic signatures will be acceptable for certain transactions that occur electronically if both parties agree. The move toward paperless transactions could have an impact on companies that make money off the delivery, storage and destruction of documents. The law also allows electronically transacted records to be stored in a computer, theoretically doing away with paper copies, file cabinets and fireproof vaults. But the elimination of those tools is a long way away. Even in the electronic era, businesses are consuming more paper than ever. n