Automation could actually be hurting insurance agents.

That's the word from the president-elect of a national agents group who says the sporadic headway being made in insurance automation is benefiting insurers.In effect, many agents are being turned into virtual clones of direct writers, said David L. Ream, president-elect of the National Association of Professional Insurance Agents. Most systems today also are made by companies, and for companies. Automation is beginning to limit competition in the agency system, at a time when it should expand the freedom of agents to shop for the best coverage, at the best price, from among many companies.

Mr. Ream, who is affiliated with North Coast Insurance Systems Agency Inc., in Cleveland, Ohio, made his remarks in a statement released to The Journal of Commerce earlier this week.

Mr. Ream was scheduled to make similar remarks today at the annual meeting of Acord, a non-profit insurance organization whose aim is to improve and standardize automation between agencies and insurers. The annual meeting of the group, which is based in White Plains, N.Y., is scheduled to be held in Scottsdale, Ariz., this week.

The goal of Acord is multi-company interface, a system in which independent insurance agents can use one computer system to transact business electronically with several insurance companies.

Agents and their trade associations have strongly supported the concept of multi-company interface while insurers' support has been less vocal and widespread.

The present condition of the insurance automation system benefits companies because of insurers' heavy use of proprietary systems, which tie an agent to the specific company offering the computer system.

In many cases, these systems are geared less for the agent and more to the convenience of the company's own staffers and procedures, Mr. Ream added.

An agency owner must install two or three computer systems if each insurer it conducts business with offers a proprietary system. Agency employees then must spend extra time and energy learning the techniques of different electronic systems, he added.

This is time the agency should be devoting to servicing customers or selling polices, Mr. Ream added.

Although the agents association knows many insurers and vendors want to develop an efficient automation system that will benefit agents, Mr. Ream said movement in this direction is too slow.

Progress is being slowed by the cold economics of capitalism. Understandably , company CEOs would face a stockholder lynch mob if they junked millions of dollars worth of (computer) systems, plus the competitive edges their proprietary systems provide, he said.

But agents, whose market share is being eroded by more efficient competitors, must show insurers how balanced, ideal automation will be more cost-effective than the continued development of individual computer systems.

We must set aside the natural urge for self-gratification, he added. The better course is to pursue mature, balanced automation that makes the entire agency system a stronger competitor.