Navigating Distribution Channels
"The application that we decided to implement is ACORD standard, even though all of our legacy systems aren't standardized," relates Brad Richter, manager, wholesaling technology at Thrivent Financial. "We are building for the future, so we chose a solution that would allow us to communicate with third-party applications - both on the data migration front and internally - as we make enhancements to our existing data."
But that flexibility also is paying dividends for Thrivent Financial now. Agility:Insurance allows for quick and flexible configuration and a holistic view of sales and marketing activities and relationships. "In order to be successful, we have to sell product, and the sale of product many times can vary on its technique through different segments of distribution," explains Richter. The solution offers client management, channel management and lead management functionalities combined. "We can take the segmentation models that are sitting out there and actually apply and understand what activities work best in what market - and that can change at the drop of a hat."
The Web Is Always Open
Quick market changes make the need for fast, reliable data transactions between carriers and sales forces all the more urgent. As a result, Web-enabled portal technology is moving to the forefront of distribution-related technology buys. "The spend is in the area of the front end - portals and front-end systems being the most important," relates Datamonitor's Blomquist. Along with standards adoption, Web-based technology frameworks facilitate the two-way flow of information that so many agencies want. "The establishment of standards and portals are essential foundational elements with regard to technology," says Blomquist.
JPF is making use of Navisys Front Office - a Web-based, platform-independent front-office system that enables the transmission of data feeds back and forth with agency systems as well as paperless file transfer - and a product illustration system that can interface with agency systems. "Navisys is a very flexible platform that enables us to more readily accept feeds from third-party tools that the IMOs are investing in," says the carrier's Creedon. "Application entry and the ability to identify outstanding requirements on a case are two examples of critical communication that is facilitated to the agent, improving both turnaround time and quality," she continues. Since implementing the tool nearly three years ago, JPF has experienced a 60 percent internal productivity gain and has realized a positive impact on turnaround time.
In distribution channels, however, savings are not always the primary concern - commissions often are more important because large commissions mean big retention of producers. "It really all boils back down to agent enablement," says Datamonitor's Blomquist. Since independent providers have the ability to move from one carrier to another at any time, it is in a carrier's best interest to find good producers and retain them, he relates. One of the best ways to retain producers is by making it easy for them to do business - by providing the necessary data to facilitate sales. "Underwriters will have to make it as easy as possible for producers who are rating and administering policies," says Blomquist.
Outside of the regulations revolving around compensation arrangements, producers are under the added liability of ensuring that the product or package that was purchased by a client actually possesses all of the attributes that were sold to the client, according to Bridge Strategy Group's Pass. "Customers depend on agents to make sure the policy delivered is what was supposed to be delivered," he says. "Agents and agencies are usually legally liable for errors where a carrier might not be."
This is an area where technology should be utilized as a supplement - but not a replacement - for high-quality product development, according to Pass. "It is important to recognize that technology allows you to automate simple repetitive tasks, but it doesn't deal with differences from one customer to another very well," he says. This is why the broker/agent/producer model is so important in the insurance industry. Policies can be confusing, and customers generally depend on one-on-one interactions with producers to ensure high-quality financial advice. "It is tough for the underwriter to make sure each policy gets out correctly with deductibles, limits, exclusions and endorsements, but it is their obligation," says Pass. "So all insurers are going to have to raise their game on this point."
Ultimately, the key functionality for any insurer's distribution system should be flexibility, stresses Thrivent Financial's Richter. "The technology simply needs to be high-end on ease of use, functionality and change-management adaptability for the user," he says. "The goal is to put the power and the knowledge of the data in the users' hands."
Tweet This