Territorial Management With SAP’s Strategic Distribution Management

Improving the day-to-day management of agency and broker distribution in both direct and independent channels continues to be a challenge for insurance carriers. However, meeting those challenges with aggressive territory management can provide huge benefits for carriers, both in establishing new relationships and maintaining existing relationships with individual agents and agencies.

"Being successful in territory management requires a consistent and continuous focus," says Rob Schwartz, insurance industry principal, SAP America. "Territory management is not an initiative that is measured in days or weeks, but one that occurs over months and even years."

The first step in territory management is to assess individual territories and then work to develop relationships with prospective new appointments. The information captured during this process is critical to territory management success. Unfortunately, this information has not always been treated as the valuable corporate asset that it is. Instead, carriers rely on individuals within the organization to store and manage this information. As individuals leave the organization, so does this critical information.

What's needed is a way to capture, monitor, store and track all partner information across territories, including agency and customer/prospect level information. This information should not only include detailed profiles, activities and licensing information, but also information about all "corollary relationships" among agencies, brokers, agents, prospects and insureds across all systems of record. In addition, this information needs to be available in real time.

SAP Strategic Distribution Management (SDM) enables carriers not only to capture, monitor, store and track all critical partner information, but also provides the ability to analyze customer (agency and insured level) data and then use these insights for sales planning, territorial management and product positioning and promotion.

Carriers can configure SDM's pre-built templates to meet their specific analytical needs. SDM analyzes factors such as flow of business, declination, and hit and yield ratios at an agent and agency level. Additionally, carriers can mine customer and agency lifetime value, scoring, profitability, claims data, risk and institution-specific criteria to determine optimal customer segments to target and acquire. For carriers with already-existing analytical solutions, SAP SDM can facilitate the quick analysis of operational CRM-type solutions such as campaign management and marketing resource management automation.

With SAP SDM, insurance carriers and their associated distribution channels can leverage key churn management capabilities to better anticipate the needs of their best customers and actively manage customer retention challenges. Territory management can indeed become a strategic competitive advantage.