Chapter 8 - Technology and Brokerage Operations

Question 1

How is technology beneficial?

Answer 1

1. Enhance Profitability.
   - reduces labour costs.
2. Client relationships.
   - faster response for the client.
3. Effectiveness.
   - reduces administrative tasks.

Question 2

4 criteria for evaluating technology

Answer 2

1. Reporting Capabilities.
2. Capacity.
3. Support & Training.
4. Cost.

Question 3

3 steps in initial implementation process when new technology is being used.

Answer 3

1. Instruction procedures reviewed.
2. System reports run to test practicality.
3. Review of total office operation.

Question 4

The importance of a contingency plan when new technology is being implemented.

Answer 4

• There will be unexpected issues.
• System failures could happen.
• Helps keep morale up.
• Keeps productivity going.

Question 5

Advantages of electronic data inferface.

Answer 5

1. Tracks client activities.
2. Avoids duplication of work.
3. Lower mail costs.
4. Better communications.
5. Permanent record.
6. Faster turnaround.
7. Reduced labour cost.

Question 6

Single-Entry Interface

Answer 6

• Old school.
• Information entered into computer.
• Stored for a given period.
• Batched together before sending to insurance company.
• AKA Batch-interface, batch-store-forward interface.

Question 7

2 Advantages of single-entry interface

Answer 7

1. Can send info during non peak times, communication costs reduced.
2. Faster training times, better productivity.

Question 8

3 Disadvantages of single-entry interface

Answer 8

1. Long processing times.
2. High software costs.
3. Slower corrections of errors.

Question 9

Interactive Interface

Answer 9

• Direct connection between brokerage and insurance company.
• Broker’s enter data directly into insurance company’s on-line system.
• Broker portal.

Question 10

4 Advantages of interactive interface

Answer 10

1. Requires little additional cost to extend technology farther.
2. Changes can be made without brokerages updating their system each time.
3. Access to insurance company’s files means better client service.
4. Easier to detect E&O issues.

Question 11

3 Disadvantages to interactive interface.

Answer 11

1. May result in duplicating work.
2. Requires ongoing training.
3. Brokerage must maintain separate operating procedures for each company.

Question 12

What is the primary goal of technology?

Answer 12

Enter information once, and perform multiple functions with that information.

Question 13

What is included in a client’s computer file?

Answer 13

• past quotes
• active policies
• cancelled policies
• accounting information
• contact activity
• renewal dates
• claims information

Question 14

How do you make your client database effective?

Answer 14

• ensure all client information is in a single file which is accessible to every department.
• ensure quick access to the information needed.
• when database is constructed, it’s important to think about who will be using it for what purpose.

Question 15

Technology Action Plan -Considering purchasing new computer technology.

Answer 15

1. Understanding the needs of your brokerage.
   - using internal tech team or outside consultant.
   - analyze current situation.
   - project the future.
2. Evaluating Technology.
   - reporting capabilities, capacity, support, cost.
3. Implementation.