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Pros and Cons of Insurance Agency Management Systems

Pros and Cons of Insurance Agency Management Systems

Insurance agency management systems are also known as AMS. These are software that insurance agencies use. The main purpose is to organize their business and run their business as productively as possible. 

Typically, an AMS is made for specific markets, such as in the insurance industry. Insurance-based agency management systems will include the ability to manage life insurance, health insurance, property insurance, casualty insurance, and any other form of insurance an agency offers..

There are many reasons why an insurance company might want to use an agency management system, but less often there is a discussion of why not to use one. Let’s get into the pros and cons of insurance agency management systems.  

Contact-based vs. Policy-based

To understand insurance management systems one must understand the two main styles of these systems, contact, and policy-based. These systems are differentiated mainly by how they organize their systems.


The contact-based system is tracked based on contact. This can mean policies, commissions, groups, relationships, and more. It is situated around each individual client, and how every aspect of their plan is tied to them. 

Even if a client has four different policies, you will see all of those policies linked to that client and connected.


Alternatively, a policy-based system uses policy to tie everything together. This means that rather than use the client to tie everything together, the policy is tied to the carrier, agent, client, and any commission.

If you are looking at a client with four policies in this situation, it would be seen as four separate entries rather than one whole record tied to one client. Policy-based is considered to be a bit more of an outdated method. 

Pros of an Insurance Agency Management System

Technology is used to streamline operations and improve the efficiency of your business. Some positive aspects of using a contact-based insurance AMS include:

  • Improved customer service experience
  • Workflow automation
  • Easy and efficient commission processing
  • Simple and effective online/email marketing

Using your client as a common aspect to relate all of their policies is the best option. It places every necessary aspect in one location, makes obvious connections, and ties everything back to the client.

Essentially it makes the most sense. Client-based systems allow communication to be easier, processes simpler to track and add a cohesive layer to your data. Overall using an organized agency management system for insurance creates a more efficient business. 

Cons of an Insurance Agency Management System

Essentially the only negative aspects of an insurance AMS are policy-based systems. This is because these types of systems cause the following issues:

  • Messy data
  • Blocking of marketing efforts
  • Obstruction of cross-selling attempts
  • Overall outdated system

Where to find the best agency management system for insurance

If you are looking to optimize your business and use all of the information you have to your advantage, Agency Automation Team, Inc. provides Insurance Agency Management Systems. Agency Automation Team, Inc. has created the first productivity-driven system called CP Manager. It is built from 25 years of extensive agency management system experience and will help you to give the best possible service to your clients.

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