A Cloud-based Platform: The Answer to Your Insurance Distribution Challenges

30 Jun 2017

Insurance Distribution

A prospect just called in for a quote, and you told them you’d get back to them in 5 minutes. When you call back, they’ve moved on. They got a quote already and went with another agent.

How did this happen? You were fast — 5 minutes isn’t that long a wait. And yet, it was.

It’s frustrating, isn’t it?

Unfortunately, you lost the sale before the prospect even picked up the phone. Your systems are old and out of date-- your quotation system, policy application process, and lifecycle management are… well, they stink.

Employee morale (and performance) is down. Your system is costing too much money, both from a business perspective and a legal one. There’s a lot of redundancy in your systems, which creates duplicate entries. Your workflow is complex, fragmented, and difficult to understand.

The technology you do have is antiquated. It takes forever to update and is expensive to maintain. And, you find yourself constantly having to adjust your workflow to the system instead of having the system adjust to your needs.

Online brokers are “stealing” your sales, making you look dumb, and they don’t even have to work that hard to do it.

But the thing is… you’re not dumb. You work hard and spend a lot of time learning your product line.

It just doesn’t show.

And your competition knows it, because they’ve got something you don’t have: a cloud-based platform.

The Mobility Factor

How do you run quotes now? Probably sitting at your desk, right?

This is not how cloud-connected agencies do it.

Their agents take their tablets or mobile phones out of the office, grab a latte at Starbucks, and then go talk to a prospect or customer on the street, on a park bench, or even in line while they’re waiting for their coffee.

They can give quotations and manage a customer’s policy, right then and there.

But it’s not just the agents. Customers can also log in from wherever they are, via an online portal, and make their own changes or just see policy information. They can do cool stuff like file claims and pay bills, switch banks for premium drafts, and a lot more that they can’t do the old-fashioned way.

“Always On” Technology

One of the nice things about the cloud is that it’s “always on.” The way a lot of agencies are run now is that when the employees go home for the night, the agency is effectively closed for business. This is not good, and more and more insurance businesses are finally seeing the light, moving their systems into the cloud and making it easier for agents to access business files at any time.

New Insights Into Old Customers

You know what consumers hate more than being sold to? Being called by a salesperson.

Consumers don’t open up and swallow everything a company tells them, anymore. They go online, read Yelp, chat with people in forums, hop on Facebook and “dig” for dirt. In other words, there’s a natural resistance to being sold to. They want to buy, but they want to feel like they made the best (educated) decision possible.

And, when agents call up out of the blue with a tired sales pitch, they’re only shooting themselves in the foot.

This is why the newer cloud-based systems make more sense than the old way. They allow for real-time data access and better analytics. For example, an agent can call up a customer and cross-sell them new products based on information they have in their database. Information like when the customer was born, their marital status, if the customer moved recently, if he had a child, if he bought a new motorcycle, and more, which are all key components that help agents piece together the customer’s life.

Actionable insights that show key metrics, a customer’s current product portfolio, and a profitability analysis allow agents to make better sales calls that don’t waste the customer’s time (and don’t make them angry). Plus, there’s also the fact that being able to predict what your customer needs before he needs it, makes you look like an insurance god.

Infinite Scalability

The cloud lets agencies do something they could never do before with information silos: easily expand their lines of insurance. Let’s say your agency primarily sells homeowner’s insurance right now, but you want to expand that to all forms of property insurance, professional indemnity, life insurance, liability, and maybe even medical lines.

Cloud platforms make this much easier because you don’t have to overhaul your entire system (bringing it offline for weeks or possibly months during the upgrade). Instead, the software provider can add upgrades server-side and… presto! Your agency is upgraded. The “secret” is in the cloud architecture.

Because cloud computing consists of multiple computers hosting copies of your system’s critical data, your service provider doesn’t need to overhaul the existing application. It simply adds to the “skeleton” that already exists and then integrates the new software into the existing one. In some cases, it doesn’t even need to take your existing applications offline. It can work “in the background” and then transition everything over when the upgrade is finished.

Automated Policy Renewals

Agents live and die by their retention numbers. Low retention rates are inherently bad for business, which is why automated renewals are good — something that’s much easier to pull off with cloud-based platforms.

For example, agencies that don’t use automated systems will end up with policies that lapse on the anniversary unless a new policy is written. When a customer is set up on an “auto-renewal,” they don’t have to call up the broker to ask for a new policy quote on their policy anniversary. Likewise, the agent doesn't have to confirm that the customer wants to stay on as a policyholder.

But even when systems are automated, there tends to be the problem that policies renew at a higher premium over time. A cloud-based platform can lessen the annoyance of “premium creep” by allowing both the agent and the customer to see policy renewal details before they happen. New quotes can be quickly generated, and necessary changes to policies initiated, without a lot of hassle.

Customer Profitability

Sadly, most agencies don’t have a clue how much time gets spent on one customer. They don’t have the systems in place to track that kind of stuff.  So, they simply don’t do it.

New cloud-based platforms, however, do have the ability to track resource investment per client. They can track:

  • Actual time spent on taking policy applications
  • Managing and maintaining policies
  • Filing claims
  • Managing leads

And many times they can do all this in real-time.

The result?

Customer profitability can be tracked through agent productivity and efficiency metrics such as:

  • Cost per customer
  • Cost per lead
  • Time spent per customer

Knowing how much time is spent on a customer and how much profit each customer brings the agency is valuable data — data that can drive future marketing decisions.

What You Can Learn From Cloud-Based Digital Agencies

The cloud isn’t going away. In fact, it’s becoming ubiquitous. What it brings you isn’t a new business, but rather a more efficient one. The mobility, the automation, and the scalability aren’t gimmicks. They’re the next evolution in the insurance industry. Agencies that resist that kind of change will go the way of the dinosaur. Those that adapt will become tomorrow’s leaders.

 

insurance-distribution-technology

Posted by Sharone Volk

A founding partner at Novidea and currently VP of Product, Sharone’s years of executive-level experience in insurance operations help guide Novidea’s global product strategy, innovation roadmap, product management and product marketing. Prior to joining Novidea, Sharone served as CTO at the Phoenix Insurance Company and as a VP of Technology at Migdal Insurance.
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