The technology advantage Featured

6:18am EDT August 30, 2005
When Dan Carmichael became CEO of Ohio Casualty Corp. in 2000, he knew he had to find a way to make his company stand out from the other 3,400 U.S. property/casualty companies.

Instead of implementing new sales techniques or fancy new programs, Carmichael followed a different approach — he focused on the basics, improving relationships with independent insurance agents and providing better customer service by completely rebuilding the company’s technology platform.

At the time, Ohio Casualty was experimenting with a new sales program, moving from partnerships with independent agents toward an Ohio Casualty team of agents, and it wasn’t working. Within two weeks of Carmichael’s arrival, he killed the program and recommitted to using independent agents as the only source of sales.

“[The situation] was, at best, guarded,” Carmichael says. “The company had had an initiative to sell direct, and that cost us some level of trust with our independent agents. They felt we were competing against them.

“The plus [of independent agents] is they’re independent, representing more than one company. And the challenge is they’re an independent, representing more than one company. We have to compete within that agency. We have to compete against, in some cases, other very formidable competitors. So we have to distinguish our services.”

To do that, Carmichael and his team developed an ease-of-use strategy that hinged on one key component — technology.

Tech attack
According to Carmichael, there are two ways to approach new technology.

“You can go at it at the Web or the front end — which is the way most companies have done it — and put fancy Web pages and cool technology on an Internet platform,” he says. “Or you can do it the way we did it, and that’s go back to the mainframe and rebuild all the systems out so that they are Internet-friendly and they use Internet languages like HTML and can be integrated very easily with any other system, such as an agents system or a vendors system.

“It’s a harder, longer process but it fits the long term. It allows you to do what we’re doing now, and that’s roll out new systems. In 30 to 60 days, we can have a brand-new application up for our agents or for our own internal use, because you don’t have to do the hard-wiring.”

Revamping the mainframe gave Ohio Casualty a huge competitive advantage, making it faster and easier for agents to get the information they need.

“The main point that we’re trying to make for the agents is that we want them to stay in their system when they communicate with us,” Carmichael says. “They all have their own management information systems — over 80 percent of them do — and we would prefer that they not have to leave their system to get to us.

“A lot of our competitors put up a Web site that makes agents exit their own system, go into that Web site, do their processing and then bring that data back into their system. We want all of that data to be ... in their system.”

Agents simply highlight the policy or the claim, upload it to Ohio Casualty, and get an answer. “We believe that if we do that, then agents will prefer to use us versus our competition, who makes them jump through several hoops, from passwords to Web sites that they have to learn how to navigate.”

It sounds simple, but it’s taken Ohio Casualty time, sweat and plenty of cajoling to convince long-time agents that a brand-new technology platform will work better than the system they already know.

“The biggest challenge was change itself,” Carmichael says. “Agents and employees are not interested in making changes — they’re comfortable with the way things work today. And when an agent is hiring new staff, he doesn’t want to have to train people on the new systems — he prefers the old way because it works and it’s dependable. So the biggest challenge is to prove to people that the new systems are not only easier to use for all people, agents and employees, but they provide a more robust solution.”

To convince employees and agents, Carmichael implemented new training programs.

“We’ve done a lot of different kinds of training,” he says. “We have a very proactive call center, calling agents, walking them through the process — in some cases they have to download new software — hand-holding them through that.

“We’ve introduced Web-based, online training so agents can come online and do the training, learn the new system or the new application. We’ve sent marketing reps out and specialists out, face-to-face with our agents, to literally walk them and their staff through it. We’ve had good success through our help desk that’s much more reactive, so when somebody’s got a problem, they can call in and then we walk them through it.”

With the initial training done, Ohio Casualty continues to make an effort to keep technology in the front of people’s minds.

“We reinforce it through meetings,” Carmichael says. “We have meetings with our agents on a regular basis, and we’ll always have one part of that meeting where we highlight or talk about technology.”

Keys to success
Beyond cajoling and training, three key actions helped Ohio Casualty’s technology improvement program succeed.

The first, says Carmichael, was agent and customer contact.

“No. 1 is, talk to your customers first,” he says. “Find out, what do they need or want in the way of systems or access to systems with the company. We have a customer group that we bring together every six months to give us advice on where should we go for new technology solutions.”

The second key was to “make sure that the IT staff has strong project management skills. Every one of our senior people in IT have professional project management skills, and that has allowed us to introduce new technologies quicker, complete projects faster.”

The third thing Ohio Casualty did was to “make sure the product people — the underwriters, the claims people, the actuaries — make sure that they’re part of that [project management] team.”

Even with all three keys in place, Carmichael says, one more element is needed to tie it all together — communication. Keeping the lines of communication open between departments such as IT and customer service, and between the company and its clients, is critical.

“The more clearly you communicate with people, the easier it is for them to do business with you,” Carmichael says.

The payoff
Ohio Casualty’s technology initiative has paid off, making agents — and the company — more productive.

“The applications that we’ve put online for our employees and our agents are so much easier to use than the old way that even the die-hard old-timers who know how to navigate the old system will admit that it’s easier, quicker, faster, cheaper to use the new way,” Carmichael says.

“Not only do we enable claims to be handled more efficiently with technology, but in the agent’s office, we provide a lot of access to data through their system or through their laptop or through their PDA. They can get access to data about their customer, about the billing system, about claims, so that they have a better understanding of what’s going on, and they can provide better service to their customers.

“In turn, we provide better access to our policy administration system, which allows agents to receive all of the data in all of the policies that they have on the books with us, but more important, they can upload applications, they can upload requests for quotes and do inquiries, and they can actually issue them online in their office.”

As the company’s ability to respond quickly to customers online has increased, the amount of paperwork and number of customer service phone calls have decreased.

“We are now finding that more of our inquiries into billing, for example, are being handled online,” says Carmichael. “They don’t require human intervention. ... They can go direct to the online application and get the answer. Service has improved, and speed of getting the data or getting the answer has improved.”

Carmichael says it’s all the result of strong communication and finding the right technology that provided agents what the agents really needed — “Better technology for their processing needs, for the support of their customers, and [on our end], providing ... better personnel and services that give the agents and their customers a high quality of service.”

How to reach: Ohio Casualty Group,