Industry experts estimate that carriers spend somewhere between5 and 10 percent of the total IT budgets on technologies related todistribution. If the experts are right, then approximately$5.6 billion will be spent in this area in 2014. It'sprobably 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 doingmore to make it easier to generate sales and deliver service toclients.

With all of the recent advances in technology, whereshould carriers focus when considering distribution-channelpriorities? Obviously, they need to keep the lights on. However, technologies such as mobile networking, real-timepredictive analytics, and big data potentially offer game changingopportunities and should not be ignored.

The most successful strategic initiatives always consider theimplications of those most impacted. As I began to writingthis article, I decided to talk with a few agents and with KevinDorgan, who runs a consulting business dedicated to helping agentsexpand their 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 need to invest in technology that fosterscollaboration and communication among and withagents.

Ways Carriers Can Help Agencies

1) Help Agents Leverage Social Media to Deepen CustomerRelationships

In 2012, LIMRA found that almost 80 percent of carriersengage in social media. According to Pew's 2012 research, 67percent of online American adults are Facebook users. Although many agencies have established Facebook pages, carriersprobably have invested more than most agents in understanding whatworks and what doesn't in the social media world. Largercarriers often have access to social media best practices which maynot be easily available and accessible to producers.

The exponential growth of mobile devices and social mediamakes it imperative that carriers help their producers learn waysto effectively use these technologies to reach each customer. Otherwise, they risk alienating customers and marginalizing theefforts of their producers. Carriers should also realize thatmost producers will look to other sources if they aren't able toget what they need or want. If carriers want to deliver aconsistent brand experience to their customers, they need to makesure their producers are also equipped with the tools andinformation to do so.

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-ChannelExperience

It was only natural for most producers to initially resist theemergence of Internet sales and service. After all, some sawit as a direct threat to their existence. However, as we'veseen with the travel industry, there should always be a place foragents to serve those who prefer having a dedicated professionalavailable to handle their needs. The fact that many carriershave implemented web-based portals similar to what is available todirect carriers has also helped mitigate producerconcerns.

As carriers expand their distribution capabilities, they need torecognize the importance of providing consistent, coordinated andseamless experiences to customers across all channels. Carriers need to realize that their producers play a critical rolein how customers experience their brand. Customers don't viewtheir carriers 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 theloop, it makes it difficult for them to deliver on the carrier'sbrand promise. It also causes frustration, which is timeconsuming and ultimately makes it harder for them to want to sellthe carrier's products.

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 accessto information and enable them to keep abreast with change,regardless of geographical proximity. These networksfacilitate cross-functional, two-way conversations with those whoshare common interests. By using these types of technologies,carriers could solicit producer input in real-time environments tomore effectively 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. Agents could easily find out how others are dealing with similarissues. Carriers could use real-time analytics to developknowledge bases and online troubleshooters to help agents resolvemore of these types of issues on their own.

These types of technologies also provide cost-efficient ways tostore useful information that can be accessed 24/7. Inaddition to providing online help, carriers could also provideagents with access to other types of value addingresources. For example, carriers could give agentsaccess to vendor relationships that offer discounts. Not onlywould this help agencies save money, carriers would have moreleverage in establishing volume purchase discounts with theirvendors. Efforts like this can also go a long way in deepeningrelationships agencies have with their carriers.

4) Expand the Use of Mobile Applications and 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 awayfrom the prime hours of the day. An alternative approach iscarriers to deliver more mobile applications or web-based training,available in modules that could be taken anytime andanywhere. Not only would these offerings reduce carriercosts, they, this type of approach would help to ensure consistenttraining with new employees.

5) Simplify Billing Communications 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 havestruggled for decades to make communications easier tounderstand. What they may not realize is that customers alsocall their agents—often in desperation to get answers to theirquestions.

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 LeverageNew Technologies

Most carriers invest in R&D to find ways that emergingtechnologies can improve business performance. What'sthe harm in sharing some of the insights gleaned from research withtheir producers, many of whom are also interested in knowing waysemerging technology can drive improved results. For example,most carriers are using some form of predictive analysis. They are finally able to predict the lifetime value of thecustomers they serve and are also able to anticipate when customersare most likely to shop for other carriers and when they are mostlikely to buy additional products. What if this type ofanalysis was applied to the agent's portfolio? They could usethis information to prioritize prospecting efforts and deepencustomer relationship by focusing on what the customer needs whenthey 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 coulddesign mobile gaming applications for agents and customers thatmotivate and reward behavior that is aligned with the carriers'goals and objectives.

7) Continue to Invest in Innovation that DirectlyBenefits Customers

The convergence of information and communicationtechnologies has been far reaching and will be for many years tocome. As consumers become increasingly reliant on theirsmartphones to conduct their business, they will search out serviceproviders who can do the same. Just because consumers arerelying more on technology doesn't mean they don't want access tosomeone they know and trust to help them with their insuranceneeds. What it does mean is that they may want access to atrusted advisor in a way that is totally different from businessmodels 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-timeanalytics from data that comes from multiple sources on the web andcombine it with the data that comes from the historicalrepositories carriers maintain. As they do, they need toconsider the implications from their research on all of theirdistribution channels.

Carriers who can manage the customer experience across allchannels and technology will be successful, particularly if theyimplement innovative ways to do business the way customerswant. As they do, agents can have a competitive advantagebecause the products and services will be easier to market andsell.

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. Carriers need to think more about the competencies and skillsneeded by the people they want to sell the products and servicesthey offer. Most successful agents are passionate about helpingcustomers protect the things that matter most—their families andthe assets they have worked so hard to get.

Great agents listen to what their customers say and targetproducts and services to what they need. They're not alwaysthe best 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 upwith all the technology changes that have occurred over the lastseveral years.

But most of them are willing to try. As carriers thinkabout where to spend their distribution technology resources, Ihope that they'll focus on the investments that make it easier foragents to do what they do best: sell and deliver personalizedservice to their customers.