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Distribution Is Crucial Element In How Disability Companies Can Differentiate

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Amelia Island, Fla.

With the disability insurance industry under a variety of pressures, the compelling question facing companies is how they can differentiate themselves and get their quality message across.

According to two speakers here, the solution, in a word, is “distribution.”

In a session entitled “Anyone can sell low rate How to help sales reps sell value and relationship,” two executives from Sun Life Financial spoke about creating a company- and industry-enhancing value proposition in the distribution of disability insurance.

Speaking here at the JHA Dynamics of Disability Seminar, Michael Shunney, vice president, group insurance, at Sun Life Financial, said “one of the biggest threats to our success as companies is spreadsheetstheres no face and no relationship on a spreadsheet.”

Distribution is “a companys face to the market,” he continued, adding, “What are we trying to do with this big investment we make in distribution?”

There are many things that make companies different, Shunney said, and these include ratings, track record, customer service, scale, product offerings and financial strength, among others.

But what really makes companies different, he said, is people. “If our talent on the street is better than other companies then well do better.”

Its “a simple truth in a complicated business,” he said, “but most group companies distribute product with people. People differentiate companies. Talent differentiates people. Talented people forge the most enduring relationships. Its a relationship business–talent wins.”

Yet when it comes to how the business traditionally measures distribution talent, the criteria generally lack something, said Drew Niziak, vice president, group distribution, at Sun Life Financial. These traditional measures include how many reps a company has, the production per rep and whether they are hitting their sales targets, he said.

But when one looks at how “we should measure distribution talent” a different set of questions is in order, he explained, and they tend to be more qualitative than quantitative. For instance, he asked, “How disability proficient are your sales reps? Are they an asset to the industry? Do they know their own contract? How well are they positioned in their markets? Do they understand the issues we face? How persistent and profitable is their business?”

If an insurers mission is to “succeed with people,” or to get to the point of having sales reps with concerns such as these, Niziak said there are a number of things a company can do.

First comes a willingness to invest in distribution talent, he said. This starts with recruitment, which in Sun Lifes case is very selective. Niziak said the company gets 2,000 resumes annually and hires 18 reps.

Next the company has to make a commitment to training, he said, but the focus has got to be “on learning the craft first and then on the sale.”

Then comes a compensation plan in which the best performers make the most money, Niziak said. The plan needs “to spoil the doers,” he added.

Another facet of a companys succeeding through people, according to Niziak, is understanding and working with brokers on common goals and challenges.

Among the common goals he enumerated were providing solutions for customers, having resources available for them and being recommended to new customers. Among the challenges that companies and brokers face in common are maintaining customer loyalty, the race for low rates, service shortfalls and the fact that health care costs are taking over the benefits budget.

Another common challenge, he added, is “the sharks in the water.”

From Shunney came additional suggestions for success, which had to do with bringing together all segments of a company with the goal of supporting quality distribution. “Unleash the creativity of your underwriters and leverage the expertise of your claims organization,” he said.

“Great underwriters,” he said, “are in tune with the marketplace, they provide creative alternatives and they provide the field with a story to tell.”

Niziak made the same point about account management and service personnel. “They are an integral part of distribution,” he said, “not a fringe player. They are relationship managers, problem solvers, allies of the customer.”

The point is, Shunney said, that there are whole communities of people in the home office “that can help distribution sell value.”

Its necessary “to strengthen the partnership between the field and the home office,” he added, “which means a shared mission, a shared cultural vision and shared priorities.”

The bottom line, Shunney concluded, is that “if we want to change the results we are getting [as an industry], we have to do something different than were doing now.”

Reproduced from National Underwriter Edition, March 17, 2003. Copyright 2003 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.