Next Generation Producer Onboarding Part 1: Onboarding as a Relationship Barrier

Insurers using a manual process often lose top-performing producers and business to carriers that are using more modern, automated solutions.

(Image credit: Adobe Stock.)

Editor’s Note: This article is the first in a three-part series wherein Roger LaVine will explore the current producer onboarding landscape for carriers using an agency channel, focusing on the industry challenges around producer onboarding, the processes and capabilities that are necessary to the up-to-date carrier, and finally, the solutions landscape of next-generation producer onboarding. This first article addresses the problems inherent in the current system.

The term onboarding means different things to different people; but for the purposes of our discussion, for large carriers it implies collecting the information necessary to set up the producer in various administrative systems and producing the carrier/producer agreements. It’s a complicated process involving verification, contracting, appointments and keeping current on product training. For many insurers, onboarding remains a manual process that crosses multiple departments and often requires management interventions. It can be fraught with inefficiencies, lost time and unnecessary costs.

On the producer side, if a carrier’s onboarding processes are outdated, they can be a barrier to selling. Typically, the manual aspects of the onboarding process can take from one to three weeks, and inaccurate information entered on the forms easily doubles this processing time. Insurers using a manual process often lose top-performing producers and business to carriers that are using more modern, automated solutions.

I’d like to discuss some of the ways that existing manual methods fall short, causing insurers and producers alike to struggle:

Speed of the overall process. Manual efforts replete with human error, organizational bottlenecks, and lack of visibility or transparency all conspire to slow down the onboarding process and make it unpredictable. In the time required for the customary one- to three-week process, a producer can quickly contract with and write business for a competing insurer.

Flexibility. Insurers often want to make adjustments to onboarding business rules—for example, they may decide to have producers pay out-of-state appointment fees under certain conditions. This can add a very cumbersome element to an already inefficient process for insurers with hundreds or thousands of producers—especially those with multiple bonus structures.

The producer experience. Onboarding with an insurer can be a chore. Producers must complete multiple forms manually, gather and submit various rounds of application paperwork, and follow up often during these stages. Time-consuming phone calls might also be a part of this process. Carriers need to make it as easy and seamless as possible to onboard producers, who are their main sales and marketing asset. Therefore, for insurers, a poor producer experience can mean a weak channel.

Need for data availability, quality, accuracy, and consistency. Insurers that rely on manual benefit summaries will face data-related challenges. Similarly carriers that store data in disparate locations, using various formats and systems, lose time and efficiency.

Data entry. Data entry is a time consuming, error-prone manual operation— particularly if handwriting is illegible or the same data is entered into multiple legacy systems. Additional data-entry points such as background checks, license records, and appointments add further opportunities for human error and confusion to take place. If an onboarding application contains omissions, mistakes, or unclear handwriting, the producer must be contacted, adding more time and layers of complexity to the process.

Paper handling. Paperwork requires manual involvement, and hinders insurers’ agility and ability to get a broad view into the onboarding process. With the growing number of producers, and the days and weeks spent in the onboarding funnel, handling paperwork multiplies the required time exponentially.

Communication with producers. Frequent back-and-forth conversations during the onboarding process make it difficult to maintain a consistent workflow, particularly when having to process numerous applications simultaneously.

Exceptions and problem resolution. Often, issues outside routine processing procedures will arise, requiring extensive time, multiple follow-ups, and personalized attention. Manual and legacy systems respond poorly to these workflow disruptions.

Compliance. As mentioned, data entry is already subject to human error; but verifications to ensure regulatory compliance involve additional manual tracking and follow-up. Maintaining audit trails requires extra effort, and more valuable time can be lost in this process.

This gives a fairly comprehensive, albeit succinct overview of the current set of circumstances in most carriers’ onboarding processes. Next time we’ll look into the capabilities, technology and personnel that are necessary to effect change to an easier and more efficient onboarding application process.

Roger LaVine // Roger LaVine is Vice President of Product Development at VUE Software, with over 30 years of consulting experience in the insurance and technology industries. He can be reached at [email protected].

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