How to Win the Battle for Life & Annuity Distribution Channel Mindshare

Life insurers and annuity marketers need to forge strong bonds with their agents, competing for their attention and loyalty in order to generate and sustain growth.

(Photo credit: Monkey Business Images.)

In recent years, the media discussion surrounding life insurance sales channels has emphasized direct internet sales and tapping into the middle market. Yet, CEB TowerGroup reported in its Distribution Management L&A: 2013 Technology Adoption Investment Survey Results that 51% of life insurers and annuity providers plan to increase their investments in distribution management software for agencies.

I believe the reason for this increased investment is fairly straightforward – insurers and consumers still value agencies. As the Affordable Care Act pushes more responsibility to the consumer for benefit decisions, many consumers will be looking to agents to help them with their insurance and retirement planning needs.

Unfortunately, the insurer’s growing need for larger distribution channels is facing a highly competitive period of agency change. And with this change comes the need for life insurers to reevaluate the pros and cons of a captive versus an independent sales force. Some insurers are also looking at their product portfolio and developing products that will make them more attractive to independent distributors.

Whatever approach a life insurer is taking; it has become clear that they are in a battle to gain distribution channel mindshare. To win the battle, life insurers need to forge strong bonds with their agents, competing for their attention and loyalty in order to generate and sustain growth. To win over the competition, life insurers need to find a way to stand out.

Giving Agents What they Want

If the primary goal is generating distribution growth, then the priority must be placed on pleasing agents and making their lives easier. Standing out as the life insurer of choice means giving agents the right products and the right tools with which to sell. Insurers need to simplify life application submissions and ease the payment process for agents. They also need to make it easy for agents to view and understand their commissions and to track where their applications are in the underwriting process.

Application status view is normally a facet of a modern underwriting system, but underwriting systems often lack agency management tools such as agent appointment, commissions, policy details and business intelligence information specifically for agents.

If an agent can log on to a portal that is easy to use and view real-time information on life policy data and commissions, then they will be more likely to feel comfortable with that insurer and thus more likely to push that insurer’s products.

Commission tracking has always been an issue. If an agent feels that a commission is in error or they simply want a commission summary, many life insurers still require a phone-based dispute process. Modern technology can provide transparency into the process, giving agents and the home office a complete breakdown of the calculations that go into commissions. Its availability through a portal is a bonus, saving insurers from numerous agent service calls over easily-illustrated math.

The life insurer’s next line of agency service includes mobility and even gamification. Mobility solutions allow the insurer to forge new ties with agents by placing their services, literally, in the agents’ hands. Mobile agency management tools can do all that a standard portal will allow and more.

The agent who is traveling can efficiently service clients by getting a reminder to e-mail a client on her birthday, receiving a notification that a new product is available, or viewing common sales reports. A mobile application that includes a game component can work as an educational tool by helping the agent familiarize themselves with the life insurer and its products while making the insurer more pleasant to do business with. Mobile and gamification tools may even assist an insurer in attracting the next generation of agents to build a strong distribution base for the future.

Growing Agency Relationships at the Home Office

If technology and modern agency management software are creating growth with their outward facing functions, their inward processing functions are crucial as well. After all, if a life insurer’s marketing department is adept at promoting all of the reasons agencies should sign up, the home office needs to be adept at getting agencies through the actual on boarding process — one that can be complex and highly manual.

Fortunately, newer agency management technologies often do much of the paper chasing for insurers by tracking agents’ licensing information and streamlining the appointment process. Notifications keep agencies and back office staff informed on pending issues. Automated background checks can ease the compliance process and online appointment forms can simply walk an agent through the process.

Agency management software can also help life insurers measure producer and channel performance, bringing clarity to areas of agency growth and painting a picture of individual agency viability. This gives the business a better handle on what makes a healthy agency and how marketing may be having an impact on channel growth. Imagine being able to see field force performance on a daily or real-time basis and being able to track and measure sales goals regularly.

Cultivating a healthy group of life insurance agents today will give an insurer a firmer base for tomorrow’s product sales. Insurers can start by envisioning an improved agency service model enhanced with modern technology capabilities.

Erik Stockwell // Erik Stockwell is a Senior Executive with deep experience in the individual and group life and annuity market. He has over 20 years of industry experience working for large insurance carriers including, The Hartford, Nationwide, and Transamerica. Stockwell has a unique set of viewpoints developed through working within insurance carriers, managing vendor technology teams and operating in a global environment. He has run lines of business and sales, finance and product development teams, where he established a record of achievement, innovation, and building growth organizations. He can be reached at [email protected].

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