Insurance Agency Management 101: Understanding Contact and Policy Systems

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Contact vs Policy Based Systems

The difference between policy based and contact-based systems is contact-based systems are simpler, more manageable databases to work from. Not only does this improve your business operations, but helps you reach the goals you’ve set for yourself and help your insurance agency grow in the future.

– Policy-Based Systems
A policy-based system is a system that tracks information that’s based on a policy. This means that the policy is the base of the system, and each operation streams from that (agent, commissions, carrier, client, etc).

Every policy is tied to the creator of that policy; so if a client has 5 policies, it will be entered in the system 5 times.

In fact, you can use policy-based systems due to their third-party integration. Excel, Outlook, Word, voicemail, and email – all letters, proposals, memos, spreadsheets, etc are tracked in your insurance agency management software. You can create templates for consumer levels to save time on typing. Whenever you do need a customer document, you don’t have to waste time pulling out the file!

– Contact Based Systems
Contact-based systems track information that’s based on the contact. This means that the individual is the base of the system, and each operation stems from it. Each individual will be tracked in the system and their information will be tied to it.

If you’re starting to make insurance agency management software, contact-based systems are the way to go. It’s straightforward and allows you to create a system for every individual that’s involved with your agency.

– Are There Examples of Both?
When looking for insurance agency management software, the words “product based” is a good indication that it’s a policy based system. Most of the tie these systems are made as sales tools and are concerned with tracking the prospect and policy connected to it.

The two common examples of policy-based systems are paper files and Excel spreadsheets. There are a few generic CRM software that resembles this system. Besides that, policy-based systems are homegrown solutions.

Contact-based systems are becoming more common because they are easier to track prospects and clients. As commission payments begin to decrease, many insurance agencies are attempting to expand their offerings; this means that they’ll software to help track these multiple policies. Most industry based systems like Agency Bloc act as contact-based systems.

– Which One is Better?
When creating insurance agency management software, you have to make a decision. For most agencies, their future goals include having some kind of growth or to be simply working smarter not harder. If you’re trying to choose between contact and policy-based systems, ask yourself the following questions

What direction is your company going?
What do you want your company to achieve in 5-15 years?
Is the process you’ve created today going to support those future goals?

Tell us in the comments below on how you can use these systems to your advantage!