Industry experts estimate that carriers spend somewhere between 5 and 10 percent of the total IT budgets on technologies 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 on applications and portals that support quoting and policy processing. It's also safe to say more carriers are doing more to make it easier to generate sales and deliver service to clients.

With all of the recent advances in technology, where should carriers focus when considering distribution-channel priorities? Obviously, they need to keep the lights on. However, technologies such as mobile networking, real-time predictive analytics, and big data potentially offer game changing opportunities and should not be ignored.

The most successful strategic initiatives always consider the implications of those most impacted. As I began to writing this article, I decided to talk with a few agents and with Kevin Dorgan, who runs a consulting business dedicated to helping agents expand their internet presence.

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

Ways Carriers Can Help Agencies

1) Help Agents Leverage Social Media to Deepen Customer Relationships

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

The exponential growth of mobile devices and social media makes it imperative that carriers help their producers learn ways to effectively use these technologies to reach each customer. Otherwise, they risk alienating customers and marginalizing the efforts of their producers. Carriers should also realize that most producers will look to other sources if they aren't able to get what they need or want. If carriers want to deliver a consistent brand experience to their customers, they need to make sure their producers are also equipped with the tools and information to do so.

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

2) Improve Multi-Channel Experience

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

As carriers expand their distribution capabilities, they need to recognize the importance of providing consistent, coordinated and seamless experiences to customers across all channels. Carriers need to realize that their producers play a critical role in how customers experience their brand. Customers don't view their carriers by channel; they view the distribution channel as an extension of the company.

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

3) Implement Intranets and Private Social Networks

Many larger companies have implemented corporate intranets and private social networks using social media sites such as Yammer and Facebook. These sites authorize members to have easy access to information and enable them to keep abreast with change, regardless of geographical proximity. These networks facilitate cross-functional, two-way conversations with those who share common interests. By using these types of technologies, carriers could solicit producer input in real-time environments to more effectively gauge the impact of the changes they are considering.

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

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

4) Expand the Use of Mobile Applications and Webinars for Training & Communication

Most carriers take into account the importance of training agents and their staffs when implementing new systems. They often develop and conduct training courses that are relatively easy for the agencies to attend. Although the in-person approach is appreciated, it's outdated, expensive and extremely difficult to replicate. And perhaps more important, it takes time away from the prime hours of the day. An alternative approach is carriers to deliver more mobile applications or web-based training, available in modules that could be taken anytime and anywhere. Not only would these offerings reduce carrier costs, they, this type of approach would help to ensure consistent training with new employees.

5) Simplify Billing Communications with Customers and Agents

For several years, billing and policy related issues have accounted for approximately 20 percent of the complaints filed with insurance regulators. Not a surprise. Carriers have struggled for decades to make communications easier to understand. What they may not realize is that customers also call their agents—often in desperation to get answers to their questions.

Although carriers have made significant improvements in this area, there is still a lot more to do. One simple step, but a starting point, is to show what the old premium was, show the amounts and reasons for each of the changes, and then show what the new premium totals are. Carriers should also consider using predictive analytic tools to anticipate which customers are most likely to complain and then equip the agent with the right information needed to explore other options.

6) Consider How Agencies Can Leverage New Technologies

Most carriers invest in R&D to find ways that emerging technologies can improve business performance. What's the harm in sharing some of the insights gleaned from research with their producers, many of whom are also interested in knowing ways emerging 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 the customers they serve and are also able to anticipate when customers are most likely to shop for other carriers and when they are most likely to buy additional products. What if this type of analysis was applied to the agent's portfolio? They could use this information to prioritize prospecting efforts and deepen customer relationship by focusing on what the customer needs when they need it.

As telematics information become more prevalent, agencies could use technology to help educate customers on ways to reduce premiums by changing certain behaviors. For example, carriers could design mobile gaming applications for agents and customers that motivate and reward behavior that is aligned with the carriers' goals and objectives.

7) Continue to Invest in Innovation that Directly Benefits Customers

The convergence of information and communication technologies has been far reaching and will be for many years to come. As consumers become increasingly reliant on their smartphones to conduct their business, they will search out service providers who can do the same. Just because consumers are relying more on technology doesn't mean they don't want access to someone they know and trust to help them with their insurance needs. What it does mean is that they may want access to a trusted advisor in a way that 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 marketing research. Carriers will need to invest more in real-time analytics from data that comes from multiple sources on the web and combine it with the data that comes from the historical repositories carriers maintain. As they do, they need to consider the implications from their research on all of their distribution channels.

Carriers who can manage the customer experience across all channels and technology will be successful, particularly if they implement innovative ways to do business the way customers want. As they do, agents can have a competitive advantage because the products and services will be easier to market and sell.

Producer Skills

There's one last idea I have that doesn't have anything to do with technology or maybe it has everything to do with it. Carriers need to think more about the competencies and skills needed by the people they want to sell the products and services they offer. Most successful agents are passionate about helping customers protect the things that matter most—their families and the assets they have worked so hard to get.

Great agents listen to what their customers say and target products and services to what they need. They're not always the best underwriters, because they don't always have all the information available to achieve the level of accuracy carriers require. And they don't always have the ability to keep up with all the technology changes that have occurred over the last several years.

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

Special Reports /

Agencies Seek Technology Support from Carriers

Related Stories

Recommended For You