Industry experts estimate that carriers spendsomewhere between 5 and 10 percent of the total IT budgets ontechnologies related to distribution. If the experts are right,then approximately $5.6 billion will be spent in this area in 2014.It's probably safe to say that a significant portion is spent onapplications and portals that support quoting and policyprocessing. It's also safe to say more carriers are doing more tomake it easier to generate sales and deliver service toclients.

With all of the recent advances in technology, where shouldcarriers focus when considering distribution-channel priorities?Obviously, they need to keep the lights on. However, technologiessuch as mobile networking, real-time predictive analytics, and bigdata potentially offer game changing opportunities and should notbe ignored.

The most successful strategic initiatives always consider theimplications of those most impacted. As I began writing thisarticle, I decided to talk with a few agents and with Kevin Dorgan,who runs a consulting business dedicated to helping agents expandtheir internet presence.

What I learned shouldn't come as a surprise; carriers need toinvest in areas that make it easier for agents to do what they dobest—sell—and provide service to their clients. Carriers also needto invest in technology that fosters collaboration andcommunication among and with agents.

Ways Carriers Can Help Agencies

1. Help Agents Leverage Social Media to Deepen CustomerRelationships

In 2012, LIMRA found that almost 80 percent of carriers engagein social media. According to Pew's 2012 research, 67 percent ofonline American adults are Facebook users. Although many agencieshave established Facebook pages, carriers probably have investedmore than most agents in understanding what works and what doesn'tin the social media world. Larger carriers often have access tosocial media best practices which may not be easily available andaccessible to producers.

The exponential growth of mobile devices and social media makesit imperative that carriers help their producers learn ways toeffectively use these technologies to reach each customer.Otherwise, they risk alienating customers and marginalizing theefforts of their producers. Carriers should also realize that mostproducers will look to other sources if they aren't able to getwhat they need or want. If carriers want to deliver a consistentbrand experience to their customers, they need to make sure theirproducers are also equipped with the tools and information to doso.

On a separate, but related, note, carriers should also considersharing what they have learned about using online recruiting.Agents often have a lot of turnaround in their offices and wouldbenefit from the knowledge their carriers have acquired from usingsocial media such as LinkedIn.

2. Improve Multi-Channel Experience

It was only natural for most producers to initially resist theemergence of Internet sales and service. After all, some saw it asa direct threat to their existence. However, as we've seen with thetravel industry, there should always be a place for agents to servethose who prefer having a dedicated professional available tohandle their needs. The fact that many carriers have implementedweb-based portals similar to what is available to direct carriershas also helped mitigate producer concerns.

As carriers expand their distribution capabilities, they need torecognize the importance of providing consistent, coordinated andseamless experiences to customers across all channels. Carriersneed to realize that their producers play a critical role in howcustomers experience their brand. Customers don't view theircarriers by channel; they view the distribution channel as anextension of the company.

Customers increasingly expect that everyone with whom theyinteract has access to the same information regardless of how theinformation came in the door. When agents are kept out of the loop,it makes it difficult for them to deliver on the carrier's brandpromise. It also causes frustration, which is time consuming andultimately makes it harder for them to want to sell the carrier'sproducts.

3. Implement Intranets and Private SocialNetworks

Many larger companies have implemented corporate intranets andprivate social networks using social media sites such as Yammer andFacebook. These sites authorize members to have easy access toinformation and enable them to keep abreast with change, regardlessof geographical proximity. These networks facilitatecross-functional, two-way conversations with those who share commoninterests. By using these types of technologies, carriers couldsolicit producer input in real-time environments to moreeffectively gauge the impact of the changes they areconsidering.

Another thing these networks can do is help agents address andresolve technical issues they are having in their offices. Agentscould easily find out how others are dealing with similar issues.Carriers could use real-time analytics to develop knowledge basesand online troubleshooters to help agents resolve more of thesetypes of issues on their own.

These types of technologies also provide cost-efficient ways tostore useful information that can be accessed 24/7. In addition toproviding online help, carriers could also provide agents withaccess to other types of value adding resources. For example,carriers could give agents access to vendor relationships thatoffer discounts. Not only would this help agencies save money,carriers would have more leverage in establishing volume ­purchasediscounts with their vendors. Efforts like this can also go a longway in deepening relationships agencies have with theircarriers.

4. Expand the Use of Mobile Applications & Webinarsfor Training & Communication

Most carriers take into account the importance of trainingagents and their staffs when implementing new systems. They oftendevelop and conduct training courses that are relatively easy forthe agencies to attend. Although the in-person approach isappreciated, it's outdated, expensive and extremely difficult toreplicate. And perhaps more important, it takes time away from theprime hours of the day. An alternative approach is for carriers todeliver more mobile applications or web-based training, availablein modules that could be taken anytime and anywhere. Not only wouldthese offerings reduce carrier costs, they, this type of approachwould help to ensure consistent training with new employees.

5. Simplify Billing Communication with Customers andAgents

For several years, billing and policy related issues haveaccounted for approximately 20 percent of the complaints filed withinsurance regulators. Not a surprise. Carriers have struggled fordecades to make communications easier to understand. What they maynot realize is that customers also call their agents—often indesperation to get answers to their questions.

Although carriers have made significant improvements in thisarea, there is still a lot more to do. One simple step, but astarting point, is to show what the old premium was, show theamounts and reasons for each of the changes, and then show what thenew premium totals are. Carriers should also consider usingpredictive analytic tools to anticipate which customers are mostlikely to complain and then equip the agent with the rightinformation needed to explore other options.

6. Consider How Agencies Can Leverage NewTechnologies

Most carriers invest in R&D to find ways that emergingtechnologies can improve business performance. What's the harm insharing some of the insights gleaned from research with theirproducers, many of whom are also interested in knowing waysemerging technology can drive improved results. For example, mostcarriers are using some form of predictive analysis. They arefinally able to predict the lifetime value of the customers theyserve and are also able to anticipate when customers are mostlikely to shop for other carriers and when they are most likely tobuy additional products. What if this type of analysis was appliedto the agent's portfolio? They could use this information toprioritize prospecting efforts and deepen customer relationship byfocusing on what the customer needs when they need it.

As telematics information become more prevalent, agencies coulduse technology to help educate customers on ways to reduce premiumsby changing certain behaviors. For example, carriers could designmobile gaming applications for agents and customers that motivateand reward behavior that is aligned with the carriers' goals andobjectives.

7. Continue to Invest in Innovation that DirectlyBenefits Customers

The convergence of information and communication technologieshas been far reaching and will be for many years to come. Asconsumers become increasingly reliant on their smartphones toconduct their business, they will search out service providers whocan do the same. Just because consumers are relying more ontechnology doesn't mean they don't want access to someone they knowand trust to help them with their insurance needs. What it doesmean is that they may want access to a trusted advisor in a waythat is totally different from business models of the past.

To truly understand changing consumer patterns and trends,carriers will need to redefine their approaches to marketingresearch. Carriers will need to invest more in real-time analyticsfrom data that comes from multiple sources on the web and combineit with the data that comes from the historical repositoriescarriers maintain. As they do, they need to consider theimplications from their research on all of their distributionchannels.

Carriers who manage the customer experience across all channelsand technology will be successful, particularly if they implementinnovative ways to do business the way customers want. As they do,agents develop a competitive advantage because the products andservices will be easier to market and sell.

Producer Skills

There's one last idea I have that doesn't have anything to dowith technology; or maybe it has everything to do with it. Carriersneed to think more about the competencies and skills needed by thepeople they want to sell the products and services they offer. Mostsuccessful agents are passionate about helping customers protectthe things that matter most—their families and the assets they haveworked so hard to obtain.

Great agents listen to what their customers say and targetproducts and services to what they need. They're not always thebest underwriters, because they don't always have all theinformation available to achieve the level of accuracy carriersrequire. And they don't always have the ability to keep up with allthe technology changes that have occurred over the last severalyears.

But most of them are willing to try. As carriers think aboutwhere to spend their distribution technology resources, I hope thatthey'll focus on the investments that make it easier for agents todo what they do best: sell and deliver personalized service totheir customers.