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Insurance Agency Management System Development: Things To Consider

The specifics of an insurance business lies in the strict regulations imposed on the sector that entails running large workflows and complex processes and requires considerable time and effort from the staff. Agencies have to deal with many layers of regulatory requirements and tedious paperwork that negatively affect performance influencing factors and increase the possibility of a human error which leads to data leakage and seriously damages the business and its reputation.

Insurance agency management systems (AMS) are ad hoc means of facilitation and automation of routine processes without compromising quality. AMS is the software used by insurance agencies to handle their specific niche needs and organize business processes more efficiently. AMS usually integrates both client management software for insurance agents (known as CRM – Customer Relationship Management), and ERP (Enterprise Resource Planning) functions, thus covering both internal and external digital interactions.

Digitalization as a global trend enforces businesses to adapt if they want to compete effectively, so there are already lots of insurance agency software solutions. And the insurance software market continues to grow – according to some estimates, its year-over-year growth is predicted at 5.85%.

But when it comes to such a demanding industry where customer experience is a crucial element of the agency’s overall success, there is no one-size-fits-all solution. Particular needs and requirements established by a specific niche on the insurance market and regional disparities necessitate the insurance software solutions development. This article will guide you through all the pros and cons of developing such a system and help clarify what key features you should take into account to get the best results.

Why Build an Insurance Agency Management Software? 

Insurance companies turn to the development of agency management software with the following major objectives: to streamline processes, reduce bureaucracy, cut costs, and improve both employee and customer experience. The key benefit is that the system is specially built for a particular company and designed to meet its needs and requirements. Let’s consider each point.

Streamlined Processes

Operation in the insurance sector implies a rapid pace and large workflow. An agency management software is a perfect way to streamline and facilitate routine processes and reduce the departments’ overload where the staff has to work in permanent tension and stay alert to every detail. 

Time and Cost Reductions

One well-designed insurance client management software tool can replace a whole bunch of narrowly targeted products providing employees with a flexible and easy-to-use system to effectively manage their client base and documents. It also cuts expenditures through the processes automation that reduces manual work up to 80%.

Improved Customer Experience

A crucial distinction of the insurance sector is the low frequency of customer requests such as in the case of life insurance. It means that data that hasn’t been used for a while can get lost. Specialized software enables an agency to build a whole ecosystem of insurance services and products improving the customer experience in every direction – from bringing and storing all relevant documents and data in a personal account to accessing all agency services at the customer’s fingertips.

High Performance

A cloud-based management system is capable of serving several thousand users working simultaneously and providing online support to both employees at the head office and in remote branch offices.

The National Association of Professional Organizations research showed that an average employee wastes 4.3 hours per week searching for papers. Specialized software addresses the biggest challenge of all businesses helping to save time instead of spending it on paper clutter.

Independent Insurance Agents & Brokers of America reports that 44% of agencies noticed an increase in their productivity after implementing management systems.

Security Management

Capacities of the staff are limited, and there is an increasing possibility of human error that is the reason 90% of data breaches occur. AMS alleviates the workload on employees and reduces the risk of data leak caused by a human error. If you collect and store sensitive data such as in the case of health insurance you should provide your customers with the ultimate security of their information. Developing custom health insurance agency management software with enhanced data security can become a competitive advantage if your clients know that their data is protected properly.

Custom vs Out-Of-The-Box Insurance Management Solutions 

Any successful business is backed up with solid customer relationships achieved with excellent customer experience. To free up time for improving this experience instead of managing multiple separate programs and tools, companies use agency management systems. There are two options – to buy an out-of-the-box software solution or to develop a custom system. Let’s compare each option so you can decide which one is better to achieve your goal.

Custom Insurance Agency Management System

Sometimes building a custom management system from scratch turns out to be a more informed decision than choosing, installing, and setting up an existing system and training staff in the use of this software. So, if you consider developing a custom AMS, weigh up the pros and cons.

Advantages:
  • Perfect fit – developing a custom AMS implies that it will work exactly in the way you need taking into account all the specifics of your company and industry.
  • Efficient resource allocation – you don’t have to pay for features you don’t need as if you were using an out-of-the-box solution – you choose the features to develop on your own.
  • Flexibility and prompt improvements – when you need to arm your AMS with certain features, you can do it timely without waiting for the supplier to come up with it.
  • Independence and complete control – your custom AMS will work when and how you want regardless of third-party vendors.
  • Scalability – it is easier and cheaper to scale a custom AMS than to pay for additional licenses to use ready-made management software.
  • Competitive edge – ready-made solutions usually provide the same set of tools for different industries, but a well-designed custom solution can equip you with specific tools and features your competitors don’t have.
  • Pay-as-you-go, not in advance. Buying a ready-made solution isn’t that profitable, and developing custom software isn’t that costly as it may seem. The first case implies one-time paying a tidy sum for a license to use the supplier’s software and subsequent regular charges. In case you decide to develop an AMS from scratch, the cost can vary depending on the system’s complexity and labor intensity. Anyway, you don’t pay all in one go – the amount is divided into several parts that you pay during the development process.
Disadvantages:
  • Support and maintenance cost – custom AMS implies forming and paying your own support department. Yet if you look at this point at a different angle, it can turn to be an advantage since your software is always up-to-date, and technical support specialists are always at your fingertips.
  • In case of a limited budget, buying and customizing a ready-made tool is a more fitting solution because developing some specific features can be technically challenging which poses additional costs.

Out-Of-The-Box Solution

Many vendors are providing ready-made agency management systems for enterprises of all sizes. A good AMS won’t be free, so usually suppliers offer different subscription models.

Advantages:
  • It is easy to install and use.
  • Top solutions are equipped with the must-have features.
  • There is a supportive community of the solution’s adherents who often contribute to the improvement of the product. But you’ll need to spend time to be well versed in it.
  • It is inexpensive in the short term – the price of a monthly or even annual subscription can be significantly lower than the cost of developing a custom system.
Disadvantages:
  • Existing solutions with large auditory are often unwieldy systems and can’t keep pace with rapidly changing market trends and needs. At the same time, small insurance agency management systems are often ill-equipped.
  • Ready-made AMS is often inflexible because it is built for an average company and even for different industries without taking into account the requirements of a specific niche.
  • It is expensive in the long run. Or if you’d like to scale, because you’ll have to pay additional fees for it.
  • Your business depends on the software provider who can change the conditions or stop providing its services at all at any moment that is unacceptable if you are using life insurance agency management software. Or they can stop updating it that will cause essential security threats.

Now you know all the pros and cons and can decide if an out-of-the-box management solution is as good for you as it seemed at first glance, or your insurance agency needs to develop a custom management system.

Key Features to Consider in Your Agency Management System

If you are inclined to favor a custom management system development, check out this list of the key features you’ll need regardless of business specifications:

1. Organized data and documents storage

A single database enables an agency to store the insurance information, track and timely update customers’ insurance statuses, make personalized offers, and much more. It benefits the customers as well since they can keep records of all their insurances and documents in a personal account.

2. Streamlined policies management

A custom AMS automates all the interactions between an agency and its customers. For example, it enables clients to manage their insurances online, facilitates KYC procedure and allows remote signing of the documents without losing its legal validity through the possibility to integrate third-party services and providers.

3. Real-time analytics dashboard

Customized data collection, analysis, and report system enables an agency to make data-driven decisions and address the challenges even before they are ripe.

4. Automated policies management

It allows tracking and managing claims, collecting documents, and insurance benefits. In 2013, processing insurance claims cost approx $210 billion a year in the United States, and this sum increases continuously. AMS enables agencies to redirect this money to something more substantial.

5. Communication automation – both internal and external

Using specialized tools reduces coordination time and improves performance. As for client communication management, its quality deeply affects CX and customers’ satisfaction, and AMS addresses it effectively helping to create and curate a consistent customer experience.

These are the key features of a custom management system that’ll enhance and speed up the work of an insurance agency as well as cut costs, reduce departments overload, and improve customer experience.

Summing It Up

As we already mentioned, global digitalization enforces businesses to follow the trend and arm themselves with specific software tools to compete effectively. The insurance software sector that is predicted to grow by $5.19 billion during 2020-2024 also accepts these rules. Developing an insurance agency management solution now is more of a pattern than an exception – at least for those companies who have big plans since they recognize the real value of insurance agency management systems cost and consider it as an investment.

Yet this process begins long before the development itself – it starts with an idea, research, and identification of the key features for each specific agency. If you want to come up with a coherent and comprehensive list of features and develop a custom insurance agency management system that will meet all your requirements, let the professionals handle it. Fill in the contact form to discuss how you can achieve your business goals with our help.

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