Agent/Advisors: Use Technology To Become Relationship Managers

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Heres a hypothetical case study. A customer with a special need contacts a life insurance agent. The customers child has been diagnosed with cystic fibrosis, and she needs to know what kind of coverage is best for the family. How does the agent respond?

The agent would not want to respond immediately with a product recommendation. Rather, he would want to discuss the implications of cystic fibrosis and determine whether some sophisticated planning is needed.

The question, however, is whom should he consult. The agent would need to talk with people who have expertise with disabled children and the accompanying planning. The agent may search out expertise via local connections or through the home office, and hopefully one of these avenues would supply the agent with the necessary advice.

Perhaps the agent will get all the information he needs, but, then again, there are no guarantees. He may need to know how to set up a trust for a life product, for example, and arrange for custodianship of assets and the child. And then what happens after that? Will the agent be able to continually service the customer after the sale, as changes induced by life events alter the needs of the family?

This case illustrates a telling point: In the current manufacturer/distributor roles that agents and carriers play, agents are, by and large, suppliers of advice as either general practitioners or as specialists in one or more areas. As they move from a sales to an advisor role, however, they do not have the tools or access to experts to call on for joint work/team selling. Nor do they have the means to do more diverse things on their own. And that points to a fundamental flaw in the current agent identity: They have not yet become relationship managers.

In the future of online insurance services, agents will need to grow into more sophisticated roles than simply that of the general practitioner. As offerings diversify from standard insurance products to expanded financial services, agents have begun assuming a “buyer advocacy” role in their relationships with customers. This is more of a full-service role, in which agents recommend products and services to customers based on information each customer supplieseither from data garnered via online channels or through traditional mechanisms such as a phone inquiry.

In short, agents have begun recommending the right products and services that better fit their customers needs, in an effort to extend their interactions with their customers to build long-term, loyal relationships.

Technology has initiated the change in the agent identityand complicated it. The Web has made it easier for customers to perform certain mundane tasks, as well as research options available to them.

On the agent-carrier side, carriers have supplied software solutions that make the agents job easier in the process of bringing the carriers products to the customer, as well as in agent/carrier communications. Thus, technology has enabled the agent to spend less time in administering to their customers and more in providing the kinds of buyer advocacy services described above.

However, tell an agent today that technology has made his or her life better, and youll likely get a smirkor worse. The reasons behind this are twofold: First, while self-service channels may help the agent with processing certain forms and automating mundane tasks, there are still low transaction rates among insurance consumers. Also, the agent does not usually have access to the customer information garnered through the self-service channel.

Hence, the Web channel is not forging the kind of profitable relationships that the agents would like to enjoy. Second, while carriers have supplied good software solutions to the agent, they tend to be proprietary. As a consequence, the agent must be proficient in multiple software products that live in their own little worlds (application silos, as we call them in the software industry).

For the agent role to expand, these technology challenges will need to be overcome. The good news is that the climate of financial services convergencethe trend of consolidating banking, investing, and insurance under one roofwill actually help solve the problem.

Next generation integration products such as wealth management applications are pulling together disparate enterprise applications, while also improving the agents ability to leverage customer data.

The upshot of these applications is that they help the agent provide better advisory services to their customers. They help unite the consumer and agent online to build wealth, sell products, and forge long-term loyalty. This is a crucial transition in the role of the agent: With better tools to manage the entire sales cycle, the agent can devote more of his or her time selling products and building collaboration.

Moreover, these applications help expand the relationship with the customer to include financial planning along with traditional insurance services. In short, the agent is transformed into a trusted advisor.

With wealth management, consumers and advisors can collaborate and share information garnered through multiple systems of interaction. The agent can consolidate data on customers in current systems of record, while aggregating data from other systems. This capability allows agents to gain a much wider picture of their customers so that they can better tailor their products and services to meet their customers financial needs.

There are two main components of wealth management that solve many of the business challenges outlined above. The first is on the consumer side. This provides better self-service tools for the consumer that include financial planning, integrated financial management, short- and long-term goal planning services, budgeting, portfolio analysis, product research, and plan review with an agent advisor.

These applications combine data from multiple accounts and allow customers to perform transactions, while working toward their personal financial and insurance goals. These capabilities are value-added services for the consumer, and they encourage collaboration with the agent advisor.

The second component is on the advisor side. These wealth management applications provide the selling environment and tools advisors need to be more productive, allowing them to attract and retain clients and sell more products. The software allows any agent advisor to collaborate online with his or her clients, creating an opportunity for the client to interact with the advisor anytime, anywhere.

In the future, when the parents of a child with a debilitating disease such as cystic fibrosis contact their agent, that agent will make them his or her long-term customer. First, to find the right policy, the agent will turn to his internal advisor management system, and queryvia a bulletin board or chat areathe experts in this field of disability, who will recommend all the options available.

The agent will then contact the customer and jointly work out a plan. For example, the need here would be life insurance and disability insurance on the parents that would provide financial security should something happen to either one of them. The agent and customer might also create a financial plan as well, such as setting up a trust to hold assets for the benefit of the child, and possibly to protect assets of the family and/or siblings.

The relationship, however, does not end with the initial sale of the plan. This customer will have an individual consumer profile set up within the system. Should the customer perform any future self-service transactions or make queries, the agent will be notified via alerts of the change in status. In this way, the agent can better react to the changing life events of the customer.

In the above case, should the agent receive an alert that the father has changed a beneficiary via the Web, the agent can contact the customer to inquire about the change. If, for example, the reason is based on a divorce, the agent can then look into the original plan, inform the customer how this change impacts the entire plan, and make suggestions for other products that will fit the customers needs. In this way, the agent is fully engaged with the customer throughout the entire life cycle of their relationship.

The footnote to this little case study is this: The technology exists today. It is the behavior, the habit, the mindset of the agent that will have to change as the technology becomes more widely available. The change in identity is inevitable. As savvy agents begin to recognize the opportunity to transform their customers into profitable, long-term relationships, every agent will start making the transition to becoming a relationship manager.

is vice president of Global Insurance for S1 Corporation, based in Atlanta.


Reproduced from National Underwriter Life & Health/Financial Services Edition, June 11, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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