News channels and insurance distribution have something in common. Both have undergone two decades of disruptive change. Both have had to reconsider their role in the customer's life. Both face the dilemma of how to reach customers in the face of information overload. And … it may be that both find their way back to the customer's mind through new technology, data and analysis and a personal touch that is promoted with digital means.
Over the past two decades, we have seen a dramatic decline in the newspaper. Most of us have a laid back attitude when it comes to painting a picture about ourselves. If we read a newspaper, it has fallen sharply. We collect our news via online sources. Of course, much of the support from newspapers – ads – has been pushed into the online area, where someone who sells their car instead of three lines for $ 20 can view pictures, location and as many lines of text as they want for free until they sell. Craigslist and the Facebook Marketplace and a thousand other sites have accelerated the pressing of news to digital models. Although many of us think about the heyday of the magazine, the average reader probably feels less guilt over the paper they consume … and they do not lack all of these advertising pages.
This is where every insurer must start. We need to examine the insurer's relationship with distributors in the light of the customer's attitude. What changes with the customer and how they take in information? How do insurers and distributors adapt?
As customers, we do not want ads. We want access to information about products. We do not want to sell insurance. We want access to the insurance products we need with tailored expertise across a wider set of channels.
Insurance companies must work to use distributors to their advantage through the customer's lens. In the right way, this means a better experience for the distributor, the insurer and the customer. Insurers need to help customers with an experience that will be enhanced by synchronized and seamless distributors / digital channels. People and companies that interact with their agents feel more comfortable with their insurance products when they understand their insurance products. This is why the broker / agent channel does not risk interfering, but instead is ripe for digital development.
I-Touch with agents / I-Touch with customers
Insurance companies interested in serving customers will keep track of what customers need and which agencies need to serve them. In August 2021
The insurer / distributor round-policyholder self-service
In most "retail", the customer's digital activation is just about "giving them what they want". When it comes to insurance, however, total access can mean that the customer loses business wisdom when he makes big decisions and the agent can lose out on the customer's business by not keeping in touch. We were curious: Which transactions do not threaten the agent / customer relationship? What transactions frees the agent from the work he or she would rather not do? There is a fine line. (See Fig. 1) in maintaining an existing contract, they would prefer to retain control of activities associated with changing the policy or signaling a potential change (eg requesting loss runs). Part of their concern is about the potential for disintermediation. [i]
The quotes from agents reflect that they also struggle with a desire to provide customers with good self-service, but still keep them from some of the stressful situations that can arise when they are allowed to make certain moves without the agent knowing. Here are examples from two different agents.
“I prefer that the customer can not log in and make changes to their covers without us… .It puts us in an E&O place. You get this change – where did this come from? Who requested it? "
" It is their information, so I personally have no problem with it. I would have problems with the loss runs. It's a red flag they're trading, and we want to be ahead of it. A copy of their policy? CSR24 all the way. But let us know if there is any activity that makes changes. " [ii]
The Insurer Imperative – See Digital Service Through Two Lenses
When insurers decide what they must do to facilitate business through independent agents, it would be good for them to visualize the customer and the agent at a virtual table, with the insurer present, acting for both. What does the customer want in the way of communication and self-access? What does the agent need to place the business, maintain it and report on it, etc.? What is needed to facilitate communication between the two?
The answer to what is needed can be determined by the tools that the insurer brings to the table. There is a great variety in the possibilities. In general, agents are happy with their primary insurers (see our latest insurer / distributor bond blog), but they also expect insurers to "increase their game" with relevant technical improvements across a wide range of features. Celent's data from a separate study indicated that 76% of agents agreed to send more business to the carriers that catered to them by improving the technology that would make it easier to work with the insurer. [iii]
This means that insurers must think about technology improvement from both the agency's and the client's perspective. How will improved processes fill agency communications and transaction gaps in ways that streamline and enhance the end customer experience? Almost all answers to this question end in the need to change transport systems.
Two perspectives with a common response to modernization
The only way to improve broad and detailed functions and rewrite customer engagement processes is to design and implement a system where innovation and flexibility naturally occur in a " built-in ”environment. Both the agent and the end customer share the need for personalization, relationship development and data-driven policy management. This requires carriers to prepare for digitized automation and features that go far beyond transactions. There are implications for the major differences you are currently seeing between carriers.
“There is great variation in the insurer's ability to deliver an agent. For many, only critical business processes have been automated … even many of the "modern systems" that are commercially available today are not as open or flexible as needed. Even those who have updated their core systems often have old systems in place for distribution management. Many people still use spreadsheets to manage bonuses, and many insurers only provide PDF files with production reports and commissions.
“Contrast this with the insurance companies at the other end of the capacity scale. These insurance companies are highly automated and use predictive analytics and AI in their workflow automation. A robust integration layer means that orchestration of third-party data and additional digital processes can become part of the delivery of customer-centric services. A high level of routine operations is handled without touch … Some insurance companies use analytics to manage the distribution channel at a very detailed level. Policies, receivables and commission data have been well organized in a logical and physical model, which has made it easier to use extremely complex segmentation and compensation programs and manage agents in a more sophisticated way. "[iv]
Investment Along Two Lines
Everyone realizes that technology is not an end in itself, but must be supported by the processes and methods that match. Real innovation and progress takes place when the organization can approach both from a high level and integrate technical design and new processes. The obstacle, of course, is usually the traditional processes used by insurance companies. Old implementation methods will also stand in the way of real innovation. Celent adds that
“Old methods of creating products that deliver transaction efficiency, maximize features and deliver scale will not deliver digital customer experiences. Step-by-step implementations take too long and are too rigid. Sending requirements books to a code factory and receiving deliveries at some point in the distant future does not allow for responsive, iterative adjustments. To move forward on this path, insurance companies must invest in two major workflows simultaneously — designing their future information technology architecture and shifting their implementation methods. "
“Select high-quality business functions and rebuild them using an API and micro-service architecture. If you are unable to rebuild, you may want to consider packaging your existing technology with a digital platform as the basis for creating the core business agent experience. Include agency management functions such as access to Commission statements, production reports, marketing information, training and other functions to support an agent's full needs.
Many agencies adapt as quickly as they can to digital needs, and they make the kinds of changes they need to make in order to provide digital services with a personal touch. But in order for them to truly grow and adapt, they need carrier partners who are willing to develop their own technology agendas in a way that supports agents in their efforts to reach customers and manage their businesses.
“Agents choose their chosen operator based on their adaptation to key features that support them in selling business quickly…. In order to compete and grow, insurance companies must enable future clear distribution models that support multi-channel commitment. embrace platform technologies including clouds and APIs to support enhanced real-time integration; use advanced digital and data analytics to rethink distribution optimization; embrace ecosystems for access to data, distribution channels and digital functions from a growing number of partners; and implement digital experience platforms to build the next generation of customer and distributor experiences.
Is your organization ready to adapt and improve the agent and customer experience? Are you preparing for the next generation of agent-led customers who are both digitally savvy and interested in a deeper understanding of their insurance coverage? For greater insight into the distributor / insurance relationship and how it relates to today's technology decisions, be sure to watch Majesco's latest webinar, Seismographic and Technological Shifts Transforming the Distributor-Carrier Relationship and Downloading Transforming the Distributor's Insurance Relationship: A Survey of Independent Insurance Agents
[i] Carnaforma, Carnaforma, Carnaforma, Carnaforma Distributor's Insurance Relationship: A Survey of Independent Insurance Agents, p. 20, September 10, 2021
[ii] Ibid., P.22
[iii] Optimization of Independent Agency Experience, Celent, July 2021
[iv] Ibid., P.23
The after insurance distribution Targets for digital service with a personal touch were first shown at Majesco.