My son-in-law recently leased a new Toyota Sierra. While he was driving his new minivan, which has less than a thousand miles on the odometer, a piece of chrome molding fell off from the side-view mirror. The dealer told him it isn’t possible to replace a simple chrome piece. Rather, the entire sixinch mirror had to be replaced at the cost of $650.  
 
I suppose I shouldn’t be so shocked. It’s clear that whenever auto manufacturers' sales decrease, the price of auto parts goes up. Of course, this affects collision claims. I can tell the auto industry is hurting because the cost of collision and comp. premiums has increased.  
 
Several years ago, I remember an insurance company survey found the compounded cost of replacing an average vehicle part-by-part amounted to about three times the original cost of the vehicle. With an auto industry on life support and sales at historic lows, I can only imagine the inflated cost of replacement parts now. Imagine what will happen to physical damage premiums when these bills manifest themselves.    
This is just one example of insureds taking a hit in this weak economy. So, it's understandable that countless pressures of this kind are driving our clients to chase lower premiums, in both the personal and commercial sectors. As commercial insureds do less business themselves, they balk at the thought of premium increases, too: Because of the economic climate, they have lower payrolls and lower sales, therefore, when we re-market these accounts, we determine decreased rating exposures.
   
Meanwhile, as their investment income continues to fall, the companies are seeking increased premium. Carriers now must return to the insurance business by improving underwriting profits and selling insurance. But, in order to write new business, carriers need to remain competitive in pricing, because they need additional cash flow. What is a company to do? How can it compete?    

As I've said in the past, producers are finding that some of their carriers are trying to have it both ways—competing for new business with price, but trying to compensate by increasing premiums on renewals. It's the proverbial “perfect storm,” and it's enough to drive an agent crazy. We now are in the position of trying to save our renewal books by quoting with other companies for competitive prices in order to keep the client. Often, when an incumbent company finds we are remar- keting, it will come down in price—but only after they believe the account is in jeopardy.    

We find ourselves quoting accounts over incumbent companies, and putting ourselves in a tough position. The cost of remarketing accounts to the independent agent is extremely expensive; in part, because of the lack of REAL technology, that is, comparative rating capabilities. In personal lines, the technology has come along, but it remains a major problem in commercial lines. I know I'm not alone in my assessment, because PIA's technology survey, conducted earlier this year, reflected the same thing.
   
The survey also highlighted the fact that independent agents are much more likely to quote companies they can rate with a comparative rater. In fact, just like the old toothpaste ads, nine-out-of-ten agents are more likely to rate companies that enable real-time comparative rating technology. This interest and already-substantial investment proves independent agents, who compete every day for our clients, recognize the value of Real-Time technology. Even in a time when cost cutting is necessary for survival, we know Real Time will help us succeed in an extremely competitive atmosphere. Clients expect instant information and pricing. If a company can provide that, they are much more likely to be quoted and sold to an insured. It seems to me that companies, which are dying to be more competitive nowadays, would fall all over themselves to jump on the Real Time bandwagon.  
 
Many larger companies seem to be working to bring their commercial side up to where they are in the personal lines sector. Smaller regionals may want to improve, but like some agencies, they fear they can't afford the investment. Unfortunately, not investing may not be an option.    

The good news is, there are organizations that have information and are trying to help our industry use technology so we can all be more successful. ACORD, with support from many carriers and our associations, exists in large part, to deal with the agency-company technology issue through AUGIE and its Real Time Campaign. They also conducted a survey this year and are on the road venerating the benefits to the entire industry. In fact, ACORD, AUGIE and the Real Time campaign, will piggyback on the PIANJPIANY Joint Annual Conference this year with an all-day interactive session specifically for northeast carriers. The event will feature presentations by front-line company people, agents, user groups and vendors about implementing today's technology and overcoming obstacles and achieving ease-of-doing-business. Topics will include the new agent workflows, multi- company rating systems and how to achieve quality in Real Time and Download.
   
Independent agents are dealing with these issues every day. Carriers would be smart to stick around for the last day of the conference on Tuesday, June 9 at the Trump Taj Mahal in Atlantic City to learn more. After all, it's one of the primary challenges driving our business right now