Agent Relationship Management: The Magic Bullet That’s Insurance’s Answer to CRM

Agency relationship management (ARM) represents an insurance-centric solution that addresses distribution management needs and consolidates them into a single platform.

(Image credit: Dollar Photo Club.)

Managing an insurance distribution force—whether it is focused on life and annuities, property and casualty, or health insurance—requires an approach designed to make agents better at what they do. Ideally, a management solution will keep agents and carriers better aligned to key objectives, and ultimately enable profitable growth for carriers and for agents. Insurers have tried to do this with customer relationship management (CRM) systems, but these applications have struggled with distribution channel management requirements. Agency relationship management (ARM) represents an insurance-centric solution that addresses distribution management needs and consolidates them into a single platform.

While CRM-like tools are still necessary, they need to be delivered in a format that has been refashioned to fit with how insurance companies do business. Retrofitting an off-the-shelf CRM system for the exigencies of the field organization is expensive and costly to maintain. With the ARM approach, a field marketing manager has all the capabilities needed to identify potential agencies, much as a retail agent would identify potential customers.

Managing Disparate Functions

But ARM isn’t just a cosmetic makeover of a sales-contact management or CRM system. A key difference is that the ARM application is designed to meet the needs of the insurance industry and to enable field directed campaigns not only for a field organization to contract with higher volume agencies, but to help those agencies grow their books of business. A second key difference is that when using such a system, you are not creating another silo of data that only sales can consume. A modern distribution-management system is much more than simply keeping track of a sales pipeline. It is designed to manage many of the disparate functions and responsibilities that field representatives must manage.

Let’s take the example of a field marketing organization tasked by management to move into two new states and contract with 100 agencies in those two states. The process is no different from what any salesperson would face: set up a marketing campaign, obtain a list of agencies, begin contacting agency principals, set meetings, travel to various prospects, initiate sales presentations, negotiate contract terms and conditions, build the relationship, and ultimately obtain a contract. In the absence of an agency relationship management approach, a CRM system that addresses all the field organization’s needs would need to be considerably enhanced.

(Related: How Millennials Will Shape the Future of Insurance)

One of the unique aspects of insurance distribution is that agencies and agents have to go through an annual contract renewal. Just as insurance policies renew, so do agency agreements. Perhaps one of most powerful aspects of this new approach is the ability of the field organization to have a view of which agencies need to be contacted and when they need to have that task completed. Task management, such as form-renewal management, provides a highly effective system that keeps field management and field representatives aware of the status of contract renewals.

Many insurance carriers provide assistance to help independent agencies bring on new agents. Often, carriers offer a financial incentive or growth incentive to agencies that they must meet to continue to receive financial support. With an ARM system, checkpoints are established—and those checkpoints are automatically calendared so the field organization is aware of them. With hundreds of incentive/growth plans in place, automating these tasks ensures improved communication while easing the workload of the field representative.

Top- and Bottom-Line Growth

Carriers must manage many other incentive and financial programs—plans for growth in policy count, premium, cross-selling, financial attainment of milestones, client growth, contingent commissions, sales contests, and ranking, as well as basic sales compensation—that are the responsibility of the field organization. With myriad plans and programs that must be managed, it is easy to see where CRM is unable to meet these needs, and why a new approach that focuses on agency/agent relationships is a tool that will foster improved communication as well as top line and bottom line growth.

Insurance carriers are beginning to realize that distribution is multifaceted and is much more than simply finding an agent to sell products. The uniqueness of insurance distribution requires technology designed to meet the fundamental business requirements of growth, while supporting the entire value chain, not least of which is the field organization. Like the Swiss Army Knife that can remove a Phillips-head screw in an emergency, you wouldn’t want to have the typical off-the-shelf CRM system as your only screwdriver. ARM, on the other hand, is the exact tool to enable a field organization to deliver results and deliver quality service. Providing the field organization with the capability to enhance the carrier-agent relationship is the cornerstone of agent satisfaction.

Editor’s Note: To download the full white paper on which this article is based, please go to CRM Might be the Swiss Army Knife of Sales Technology, but ARM is the Magic Bullet.

John Sarich // As Vice President of Strategy at VUE Software, John Sarich serves a senior solutions architect, strategic consultant and business advisor with over 25 years of insurance industry experience. He uses his extensive knowledge of insurance operations, information technology (IT) systems, sales and marketing to develop and define operational strategies for the company’s sales and marketing initiatives.

Leave a Comment