Chapter 8 Flashcards
Generally, technology results in cost reduction, more timely information, and error reduction. Identify three other specific objectives of brokerage technology and
explain each.
i) Enhanced profitability – Reducing labour costs as a percentage of business written contributes to brokerage’s bottom line.
ii) Building client relationships – Creating faster response times to clients and allowing more effective marketing helps brokerages enhance client relationships.
iii) Improved effectiveness – Reduced administrative tasks, standardized procedures and more coordinated follow-up makes brokerages more effective.
Identify seven facts that can easily be retrieved from our client’s files.
i) Past quotes
ii) Current active files
iii) Closed files
iv) Accounting information
v) Client contact activity
vi) Abeyance process
vii) Renewal dates
Why is it important to involve employees when developing databases?
In order to ensure accuracy of database entries, employees must understand importance of collecting information and the correct method of entering this data.
Explain how technology supports:
Product management:
Technology supports product management by allowing automated rating functions that provide clients with timely, multiple quotations. Technology also supports product management by allowing communication between a brokerage and insurers of insurance information
Accounting:
Technology supports accounting functions within brokerages by providing complete accounting services including general ledger, accounts receivable and tracking of direct bill business
Administration:
Technology supports administration of the brokerage operations by providing word processing, spreadsheet, client database and mailing list functions
Communications:
Technology supports communication needs of a brokerage operation by integrating email, fax, telephone and call center operations
Training:
Technology supports brokerage training needs by providing “help” files within most automated programs
Service and Support:
Technology supports service and support of brokerage systems by providing help desk accessibility and remote connections into brokerage systems to assist in problem-solving
Describe what brokerages should consider when planning technology investments.
Brokerages need to understand complete current needs for technology solution. This means involving all stakeholders, including staff and clients, to ensure technology will match needs of all stakeholders and meet needs of brokerage’s strategic plan.
Brokerages need to project the future needs of their organization. Using strategic plans, brokerages should know whether the current technology will meet the future needs of
brokerage and if not, what changes will be required.
Identify four criterion to consider when evaluating technology solutions.
i) Reporting capabilities
ii) Capacity
iii) Support and training
iv) Cost
Why must all employees, including management, be involved when implementing technology solutions?
Full support of management is critical to successful implementation. There will be frustrations and upset of normal office routines.
Transition to new systems will challenge staff and management so having everyone involved allows for effective solutions and support.
What is a contingency plan and why is developing one so important when implementing technology solutions?
Contingency plans and alternate arrangements available when new systems do not perform as expected. Implementation will not always go as planned. It is important for brokerages to develop contingency plans for inevitable problems. Maintaining productivity and moral is critical during this stressful time.
Explain maximization and its importance.
Maximization is using brokerage technology to it’s fullest capacity. Technology solutions are large investments of financial and human resource. Underutilizing technology reduces effectiveness of investment and wastes valuable resources. After a full year, technology should be a trusted management tool.
Explain how single-entry interface communication works and provide 2 advantages and disadvantages.
Information is entered in a brokerage’s system during the day. Then this information is batched by insurer category at the end of the work day and batches are sent to the insurers in the evening.
Advantages include lower communication costs when transmitting data in off peak hours and training time is reduced as all insurer and brokerage functions are standardized
Disadvantages include a delayed response to transactions and this lengthens the time needed to correct errors.
Explain how an interactive interface is achieved between brokerages and insurers and provide two advantages and disadvantages.
Interactive interface occurs when brokerages enter information directing to insurer’s system. This is possible when insurers install terminals within brokerage offices.
One advantage is that little additional investment is needed by insurers or brokerages and insurers can make updates as required without having to wait for a brokerage’s technology vendors to update the brokerage’s system.
Disadvantages include the double entry of information required to capture information into a brokerage’s system and the ongoing training required to keep existing employees up-to-date and to familiarize new employees with the technology.
