How the Lack of Innovation Hurts our Industry

In April 2014 we celebrate the 10th anniversary of signing our first customer.  EZLynx has come a long way in that decade and, much against the wishes of some vested industry players, we have established ourselves as a successful, credible vendor in the industry. There is only one reason why EZLynx was able to accomplish this – innovation!

At EZLynx, we have always taken pride in delivering inventive solutions for vexing agency problems. I am proud of the culture of innovation we foster and encourage within the organization.  Unfortunately, looking at the industry as a whole, these 10 years have made clear why innovation in our industry is almost non-existent.

Now one of the easiest ways to encourage progressive thinking in any business is through competition and by encouraging new vendors to enter the marketplace. However, there hasn’t been any new vendor make a significant impact in our industry since EZLynx made headlines. This is a regrettable reflection on the status quo, and it will have a significant long term impact for us collectively.  Encouraging fresh ideas industry-wide is key to improving the situation, and to do this it’s important to understand first what it takes to cultivate innovation. The three fundamental requirements to do this are: open data standards, de-regulated industry and a culture of risk taking which encourages new ideas.

With our industry significantly regulated now and for the near future, it must be understood that we have to accept this as an obstacle towards originality. Indeed most well-known venture capitalists generally shy away from regulated industries because of this difficulty.  It signifies the unpredictable nature of our industry, which leads to an unpredictable ROI.   This has contributed to the lack of innovation, but for certain it has not destroyed it.

This leads us towards our second point, creating a culture of risk taking and fresh thinking.  While the business of risk management is traditionally averse to taking risks, permitting this attitude to prevail often creates apathy toward new technology and shying away from new ideas.  In addition, the depth of domain knowledge needed to create new products plays a huge role in deterring new vendors from entering the industry.  As with regulation, this factor is significant but isn’t fully responsible for the innovation problem.  I still believe that with a compelling product, built on a powerful idea, a new vendor can still establish themselves amongst us.  EZLynx is a good example of this!

With regard to open data standards, I encourage you to take a look at most other industries, especially finance, and you’ll see that the data exchange standards are very well defined. Ours also has defined standards, thanks to ACORD’s efforts, but regrettably most do not seem to follow or respect the standards. When we work with carriers for rating integration, one of their constant complaints is that EZLynx is a stickler to the standards, while other vendors are not, which slows down implementation with us. Our answer is always the same – standards are created to be followed. I do wish other vendors and carriers would make the same commitment to diligently following standards.  Imagine how much farther ahead we would be as an industry by now!

In the short term this non-compliance strengthens the existing big players, which is why the incentive to follow standards will not be spearheaded by them. In the long term this hurts who we all serve, which is the customer through our agency channel.  Standards compliance is, and must be, driven by companies like ours, with important help from Carriers too.

Finally, I want to mention some contributing efforts EZLynx is making to encourage new vendors. We announced a new EZLynx Marketplace concept in 2012, which allows third party vendors to integrate with our product and offer their services to our customers. As part of this architecture we introduced four new products in 2013 – eSignature, Lead Management, Policy Accounting and Bulk Email Campaigns. We will continue to promote this concept in 2014 to bring more vendors to our Marketplace platform. I strongly urge all of you to make a New Year’s commitment to follow the industry standards and encourage innovation – our industry will be better for it.


Lax Compliance with Industry Standards is Hurting our Industry

For those of you who know me or have talked to me personally, you know this has been one of my industry pet peeves for quite a while.  For those of you who don’t know me, here is a little background on this subject.

EZLynx was initially designed to work in real-time with carrier quoting systems and bring back a plurality of rates from multiple carriers within five minutes. By now it is a well-accepted fact that, without our efforts to push independent agents towards real-time rating, our industry would have probably suffered a lot more attrition to direct and captive writers. We quickly realized that in order for us to make an impact in this industry, it was absolutely essential for us to effect the customer lifecycle management by agencies.  Some of the problems our agents are struggling with, such as low productivity, data duplication, and legacy management systems, are well known and documented. As a result, we decided to create a forward thinking management system that would solve some of these basic agency problems and improve the agency’s bottom line while doing so.

We started selling EZLynx Management System in January 2012, and have already made a considerable impact in the marketplace by offering a viable and affordable alternative to outdated management system products. Today our management system supports more than 200 carriers, and it has been an educating experience for our team, and me personally, on the poor compliance of industry standards by the carriers. It is unfortunate that other management system vendors have decided to use the lack of compliance as a way to monopolize the market by building proprietary solutions, and thus lock agents into proprietary systems. I have come to the conclusion that carriers’ lack of compliance with industry standards has, and will, cause long term damage to the survivability of our industry. It will result in agents spending more time doing mundane and repetitive agency tasks, and falling further behind in offering the leading edge service customers are receiving from direct and captive writers.

For example, one of the solutions we offer is a customer-facing policy self-servicing feature incorporated into the agency’s website. EZLynx Client Center, which is available to agents who subscribe to EZLynx Management System, enables an agency’s customers to review policy information, print policy documents like ID cards, request policy changes, and more. One of the core requirements for this is data integrity and accuracy. We recently discovered that one of our download carriers is sending an incorrect AL3 code for uninsured motorist coverage, which when translated as per the AL3 specification, turns out to be underinsured coverage. Now imagine our Client Center displaying this data incorrectly to the customer and the E&O consequences that would follow! We have many examples like this that give us pause about exposing carrier downloaded AL3 data to consumers. If you are wondering, this particular carrier refused to fix the problem when approached by us!

In the long run, our industry and the agents will suffer if we cannot provide customer self-servicing features to their customers. Carriers interested in the issues we have identified for your company should feel free to contact your EZLynx Carrier Representative for details. I hope I have made a strong case as to why it is important for our industry to follow the standards. Our industry bodies like ACORD have done a tremendous amount of good work in defining these standards, but it is unfortunate that carriers have not also done a good job of complying with these standards. It is not too late, so I strongly urge you to work with us in solving this problem. When one of our employees approach you with download data issues, please work with us to fix the problem, so we can enable our agents to succeed in the marketplace.