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Ontario MGAs put their agency management systems online

par Mathew Kokas | May 20 2001 08:27PM

Would a producer put all its business with an MGA who could provide up-to-the-minute status on all life and fund business online? Many MGAs are betting that they would! Striving to attract, keep, and get 100% of brokers’ business, MGAs have invested in online technology to give brokers real-time access to all their business.

Two Ontario MGAs, Qualified Financial Services (QFS) of Toronto and Albanese Financial Group (AFG) of Markham are examples of MGAs setting the standard for online services to brokers. The two have launched online agency management systems. The sites of the two MGAs are very similar in function, with only a few minor differences, but they have a common objective: increase efficiencies.

Many insurance companies provide policy status information online and so brokers will go from one web site to the next to check on their business. But “our site unifies the information of all carriers for the broker on one platform” regardless of whether or not carrier has the online technology, says Kevin Cott, President of QFS.

Sam Albanese, President of AFG, adds that as soon as the insurer provides the information, it is available to the broker via the its site, www.afgonline.ca. This includes underwriting status, forms, commission accounting, software and more.

QFS’ site, www.qfsbrokers.com was designed to create efficiencies both for the broker and the MGA, explains Mr. Cott, who said he hopes to also attract new brokers with the site. “Ten per cent of brokers have their own administration support, but 90% are on their own. This system is for them,” he adds. “Over the past 18 years the underwriting service of insurers has become slower, so we’ve taken it into our own hands to speed up the servicing.”

Mr. Albanese says he wants to use the competitive edge of the technology to increase the percentage of business he is getting from his current brokers. Many brokers put up to 70% of their business with other MGAs, he says. “Why should a broker have 5 or 6 MGAs?” he asks. “We want all that business.”

Competitive edge

“The competitive edge from the product standpoint is gone,” continues Mr. Albanese. “T10 is T10 and UL is UL and everybody’s got it. The competitive edge in compensation is also gone. Everybody pretty much pays the same – give or take a few dollars here or there. All MGAs process business, so the competitive edge is gone there too. I’m looking at the ease to doing business. Only the larger MGAs will be able to develop this technology,” he explains. “The ease of doing business will attract new brokers and retain existing brokers,” he adds. “I’ve got to be there. I’ve got to compete.”

Attracting new brokers is a bonus too, he adds, but Mr. Albanese is more concerned with saving on administrative costs. “Processing paper is too expensive,” he states.“I have to hire somebody to process 100 more applications. But if I can make the existing staff more efficient, it goes right to the bottom line.”

One-stop shop is also a concern for QFS. Policy information, underwriting status, and even commissions are available to the broker from multiple insurers from the MGA’s sites. “With the site,” says Mr. Cott, “there is no need for other administration support. And if the broker leaves QFS, all the info can be uploaded into another system.” Everything is automated, he continues, e-mail and hard copy receipts are sent out to brokers by ICS Courier Services and every correspondence is logged. The broker can see whether or not he or she has been paid, and there is a breakdown of all the commissions and premiums for each product.

The two sites provide its users with powerful search engines, allowing brokers to input criteria such as the client’s name; birth date; policy type; underwriting status; and more. A user may combine a number of search criteria to produce reports and profiles of his business. “The search capabilities of this system provide a competitive edge to the broker,” says Mr. Albanese.

At AFG, applications can be input online but the paper apps need to be filled out too. AFG then captures all information from paper within 24 hours. Only AIG, partnered with LifeServ is experimenting with electronic applications, states Mr. Albanese.

Mr. Albanese explains that he is implementing a system for larger brokerages whereby the applications are submitted electronically. “The cost saving to the MGA,” he says, “could translate into an increased override of say, 5% or 10%. We haven’t done it yet. We still have to negotiate with the larger agencies.” AFG, he continues, has the technology to have the carriers and the brokers populate its database, but the carriers are not ready yet.

The integration of information is enhanced by e-mail communications. Direct e-mail links throughout QFS’ site allows its brokers to send mail without opening additional e-mail programs. QFS will begin testing a system that links the broker directly with the underwriter.

Tools of the trade

While looking at a client’s information, a user on QFS’s website can click on a link to put the client’s vital statistics into a quotation calculator for term and whole life. Both MGAs keep a record of all the quotes made and can then contact a broker that makes a lot of quotes but few sales to assist the broker. Its sites allow brokers to prepare quotations without the need for the software on their computers.

Forms, software, and other supplies from QFS’s 19 carriers can be ordered directly from its site and will be delivered the next day by ICS. In many cases, forms from AFG’s 7 carriers can be printed from its site.

For investment products, AFG has links to the companies’ websites to get all the necessary information. Brokers will need their own passwords for many of these links. There is also a link to order medicals online and link to look up underwriting requirements.

AFG brokers can also open an ING bank account for their clients. This allows the advisor to take care of the entire wealth management portfolio – “a complete wrap of client services,” he adds.

And what can we expect in the near future? Neither site is fully transactional in the sense that users cannot make changes to policy info or submit applications online. But both MGAs are currently working in this direction, and both say that the infrastructure is there already.

Online continuing education credits are a high priority for both MGAs. Also the further integration of their web sites with the databases of the insurers. Pending security issues, QFS is working to provide the insurer with a password to see all the business by that company with all the brokers of the MGA. The insurer can thus provide further assistance to the broker and also make product and pricing improvements and/ or modifications. AFG plans to launch a living benefits section this fall.

The next level for QFS is to have companies’ software, from survey to entire illustration software within the next six months on the QFS server.

Welcome technology

Brokers are very happy, says Mr. Cott, “even the links page has turned out to be a valued resource.” The number of brokers registered is about 120, which accounts for every one of QFS’ brokers. He says he expects to attract another 50 brokers at least over the next 12 months with this website.

A Canadian software company developed the technology behind the QFS site, and QFS has exclusive rights for 12 months in the greater Toronto area. QFS paid a fee for its development and also pays an ongoing user fee. “This software puts us in a unique selling position,” adds Mr. Cott.

Jack Wallace, owner of JSJ Insurance and Financial Group Inc., is a QFS broker. He has been in the insurance business for 31 years. He says the site is very user friendly, which is good for semi-computer literate people like himself. It’s good for keeping him up to date on his clients even when he is in Mexico at an Internet café. “Some carriers are direct like Manulife and Canada Life, but if I can do it easier through QFS over other companies, I will. I do business elsewhere, but I find it easier to track business with QFS.”

As for AFG, its site was developed internally with its own programmers. AFG started with a system developed by Multi Data, which was then bought by Equinox. AFG is now working closely with Equinox to develop and upgrade it, states Mr. Albanese. “Even the Equinox shops do not have it.” (AFG is not an Equinox partner).

AFG has a 50 to 60% penetration among its brokers. A lot are still doing business the old-fashioned way. “They are not as up to date as we’d like,” Mr. Albanese says. “They are still good agents, but old fashioned and we will have to keep up our old ways of doing things too.” AFG has roughly 1100 brokers.


Is technology what you’re looking for?



QFS and AFG are the forerunners of the next generation of MGAs. Are these the kinds of services that would attract you to go to a new MGA? Would you like carriers to offer similar services? Fill out our online survey at www.insurance-journal.ca. If your company is also on the cutting edge of Internet technology, then drop us a line.

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