When it comes to building a profitable book of business, independent insurance agents are not motivated by commissions alone. In many cases, agents will follow the path of least resistance and focus on selling insurance products from carriers that provide the easiest way of doing business, particularly technology that is easy to use and intuitive and helps them to increase sales and manage their businesses better.
Further, the technology must be flexible enough to support agents in both a disconnected and connected, real-time mode of work at their discretion. Leveraging the ACORD industry standards will aid in seamless data exchange and connections.
Quite simply, agents don’t want to spend time figuring out how to work technology when they should be out selling to customers. Instead, they want simple and easy-to-learn-and-use tools to handle administration, access pricing information, check the status of a customer’s policy, and be alerted to any customer activity after the sale is completed. And they want this technology to be available in one place and delivered through the tools they already use, such as a laptop, personal digital assistant (PDA) or cellphone.
Most insurance companies recognize the reality of the situation and are enhancing existing technology and tools to better support agents. Where insurance companies falter, however, is in their tendency to develop agent technology without a clear understanding of agents’ needs or any involvement from agents themselves.
Moreover, some insurance companies are developing technology without first looking for ways to make the sales process as easy as possible. However, simply creating new tools will not be enough to meet agent needs if existing sales processes are cumbersome and time consuming. In many cases, it makes sense to revamp and streamline those business processes (new business, rating and quoting, underwriting) and then use technology as the engine to enable those changes and drive sales. For example, companies can reduce their information requirements by creating a cohesive channel strategy across all distribution channels. This, in turn, can reduce cycle time by creating straight-through processing of non-exception business and automated data collection.
Understanding agent needs
Once an insurance company is ready to develop appropriate sales tools, it can use surveys and focus groups to ask a broad cross-section of agents what they need to increase their book of business. Some insurers have formed agent steering committees and advisory groups, often made up of top performing agents.
While these groups can be helpful, they are unlikely to tell the whole story. After all, many top performers will excel no matter what the circumstances, while less experienced agents may stand to gain a much larger boost in productivity with the right supporting tools. It is also a good idea for representatives of the insurance company to spend time in the field with agents to learn how they operate and interact and sell to customers.
But not all agents have the same needs. Different parts of the agent population are likely to require different tools based on the realities of their client base. It would be a mistake for insurance companies to think that one size will fit all. This is the lesson an insurer may learn the hard way if it invests heavily in a leading edge sales technology for its entire population of independent agents. Agents may not use the technology because it is too complex and the agents have to spend too much time learning about it. Indeed, such a situation could actually increase the administrative burden on agents more than it aided the sales process.
To address this problem, the company might attempt to segment its agents. This usually involves identifying 4 or 5 clear segments based on certain key characteristics, such as size of business, profitability, client base and the agent’s personal goals.
Develop and test appropriate technology
With agent needs in mind, companies can move toward developing tools that meet those needs. An insurance company may find that its sales are suffering–even though both the agents and their customers love the company’s products–because of the length and complexity of the paperwork required to price and purchase those products.
To deal with this problem, the company could develop an online application tool with the full agent involvement. The company could streamline the application process by developing 5 initial questions for the online application. The rest of the application can then be customized based on the answers to those questions so that customers and agents only have to provide essential information. Then, once the application is submitted, the risks are clearly delineated so that underwriting can assess the risk and issue a quick decision. Throughout the application process, the agent can easily track the progress of the application and any action taken.
Once this type of technology has been developed, insurance companies should roll it out to a select number of agents in a pilot program to see how well the technology works in the environment for which it was designed. In addition to giving the company the opportunity address any problems before a widespread rollout, a pilot rollout also allows users to get used to the technology. Once the tool is ready for a full rollout, the insurance company can create incentives, such as higher commissions, for agents who use the online tools.
Of course, this process does not stop once the technology is in place. Insurance companies need to keep their technology fresh and current through continuous improvement. Therefore, it is a good idea to continue to hold focus groups with agents, say twice a year, to gather insight into how well the technology is working and meeting the needs of agents and their clients.
While technology is important in the insurance sales process today, it will become even more important in the future. The next generation of insurance buyers and sellers has grown up in the age of technology and has become quite comfortable handling business online, using technologies like instant messaging to make their customer experience easier. Technological change has arrived and will continue into the foreseeable future.