Transamerica Life Canada Takes Care of Distributors with Tech

In order to succeed in today's competitive insurance marketplace, carriers must offer innovative products and services to their distributors, according to Ray McKenzie, vice president, distribution management at Transamerica Life Canada.

McKenzie's presentation, "Offering Entrepreneurs Innovative Products and Services," which was delivered at this week's LOMA Systems Forum in Fort Lauderdale, highlighted his company's initiative "to deliver a single focused distribution infrastructure" for Transamerica Life Canada's six subsidiaries and close to 20,000 producers. "The advisor is the future," McKenzie stated, adding that "technology must be the enabler to make that happen. The advisor's needs are changing and they are using technology in different ways."

Although McKenzie readily admitted he is not a technologist (beginning his presentation humorously by saying, "I am Ray McKenzie and I am a user. I am not a technology guru, I am a technology user."), he described the technology challenges associated with Transamerica Life Canada's initiative.

Transamerica's successful distribution strategy, which "uses technology as the enabler," focuses on four key areas: information centralization, customized compensation, real-time information and the ability to accommodate expansion (scalability), McKenzie said. The core of the initiative was the centralization of all of Transamerica's distributor systems into a single database, which makes accessing an advisor's entire book of business easier for both Transamerica and the advisor.

Advisors can access their information, including pending business and commission data, over the Internet and can also perform certain functions online, such as changing addresses. "The producer can see how they are doing every day, up to the minute," McKenzie told the LOMA audience, adding that the efficient compensation system gives Transamerica a competitive advantage, since ultimately the company is easier to work with.

The advisor's information is as close to "real time" as is needed, admitted McKenzie. "Real time in this instance does not mean that the information has to be updated every second," he said. "Many of the producer's own systems only update every night, or twice a day. We get it updated in 15 minutes."

Another key part of the strategy was changing the compensation structure. "We changed the compensation structure to better fit our business," McKenzie reported. "The reality is that an insurance company has to pay commissions to get the advisor to put the product in front of the client." Transamerica has traditionally been one of the highest compensators in the Canadian marketplace, he added. "We increased the efficiency of the system so we can pay weekly."

Lastly, since Transamerica traditionally has grown by acquisition, McKenzie said, the distribution system had to be built to be able to quickly accommodate large numbers of new advisors, something that it is capable of doing.

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio