In the current economic climate, growth is a top priority for North American life, health and annuity insurers. Focused on this goal, carriers increasingly recognize the need to refresh their distribution strategies. Insurers need the ability to accelerate the quote-to-issue process and share data with their producers and service providers to remain competitive in today’s market.
Some carriers are adopting a data-as-a-service approach when rethinking their distribution channels — in particular, one that provides direct data-as-a-service connectivity to their producers and service providers. Carriers that leverage a centralized distribution approach, such as a data exchange, can trade data from a single, secure touch point in real time with producers and service providers, improving the ease of doing business across their distribution channels and enabling straight-through processing.
Today’s IT system hurdles
A recent survey conducted by Oracle Insurance asked insurers how they could deliver more value if they were not limited by their current IT systems. Both business and IT respondents were very clear in the challenges they currently face. More than 60 percent of business and more than 70 percent of IT respondents said they could provide more efficient, faster service. Additionally, more than 50 percent of business and almost 70 percent of IT respondents said they could provide self-service options (such as Web portals) if they were not limited by their current technology.
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IT constraints include slow application processing, involving multiple Web portals, email, and other connection points which can have a negative impact on new submission turnaround times and placement ratios for new policies. In addition, producers struggle with having to enter data into multiple carrier and back-office systems (such as their own agency management systems), which can further slow time-to-issue and raise error risk.
Insurers are increasingly outsourcing critical business processes and looking to software-as-a-service (SaaS) offerings as an option for gaining highly available, cost effective services. An insurance data exchange combines both of these concepts, and enables carriers to provide faster, more efficient service to existing producers, while attracting new ones through a ready-made channel.
Connecting carriers, producers, and service providers, an insurance data exchange provides a single, secure online service for data distribution, consolidation, and sharing among these primary stakeholders, eliminating the need to create and support multiple distribution connections. By automating manual processing with a data distribution solution, carriers and stakeholders can improve efficiency, reduce errors and accelerate new business submission, resulting in accelerated quote-to-issue, improved placement ratios and greater profitability. Insurers can also reduce overall maintenance costs by using a single solution for multiple data services — including appointment status, new business submissions, service orders and status, pending case status and commission statements — rather than using disparate hardware, applications and connectivity services.
Key considerations for a data exchange
Selecting a data exchange is an important business decision for insurers that will impact core distribution processes. When making this critical decision, carriers should ask the following four questions.
1. Does it improve ease of doing business for producers?
Producers are more likely to do business with carriers who are easier to work with. The use of a data exchange can help eliminate many of the administrative hoops that independent agents must jump through and help make the carriers who use the exchange more attractive. A data exchange should give producers better visibility into their overall book of business, and provide data in the formats producers want, when and how they want it. Plus, by offering a single service from multiple carriers, agents no longer have to maintain or access multiple portals for each of their carriers.