I was recently asked this question and wanted to share my response:
I think the driving factors are a combination of the following:
1. Frustrations by users who feel the current systems in the market are out-dated and hard to use.
2. New Technologies available, especially with web-based applications.
3. Costs for newer and better systems are less than what the the industry leaders charge for their applications.
4. Flexibility: older systems allowed for little or no customization for agents and if they did, the cost would be substantial. With newer systems, they are built in a way where you can easily build in some custom features for those agents who just operate a tad differently from everyone else. This is always at a cost, but the pricing is nominal and for the most part, affordable.
5. The learning curve has been reduced. Due to users becoming more computer literate and standards being established in application development, it’s much easier for people to navigate through and use newer applications. They are more intuitive and allow for users to use a greater part of application features and functions. It is a well-known fact that the average user of an older system uses less than 30% of the application they purchased. With newer systems, this is not the case.
6. Systems need to do more than just manage your policyholders. Agents now expect systems to provide complete agency management, from sales and marketing to vendor management.
7. Reduced development costs: The cost to develop such applications have also come down quite a bit over the years. This provides a lower point of entry for entrepreneurs. Also, since the business model around such a product is strong, it provides great returns.
A great example of a forward-thinking insurance agency management system is Aspire by Impowersoft. The features are unique, the user-interface is appealing and the cost is nominal. Best of all, it’s web-based so it can be used on a PC or a Mac.