Even if you are only dabbling in the IT black box....
Insurance companies today are starting to think more strategically
about how to successfully manage their distribution channels.
However when management considers distribution, its thinking is
often still limited by the conventional wisdom that to succeed they
need to develop a different set of products for each individual
distribution channel.
Deloitte believes that the most effective strategy for winning the
"battle for
distribution" is one that involves a two-step approach:
• Identifying, prioritizing and understanding the characteristics of the
channels
that are critical to the success of an insurance company's business
• Attracting producers by designing a powerful 'motivation mix' of four
key
components, tailored specifically to the characteristics of each
priority channel
The key components of the mix are:
• Product - developing a small number of 'best of breed' products that
are tax
efficient and competitive across all of an insurance company's channels
• Price - disciplined underwriting that allows competitive pricing
without having
to sacrifice resources from other components of the mix
• Compensation - adopting flexible and imaginative strategies that go
beyond
simply competitive commission rates
• Support - employing new technologies that reduce producer
administrative
burdens and increase customer face-time
"Essentially we can create a matrix that offers companies a way to
analyze the
four components as they relate to each channel," says Kroll. "The goal
is to offer
the optimal mix of incentives to motivate producers to sell a company's
policies to
their clients."
Key Motivators
Captive Producers ➤ Product Flexibility
Independent Producers ➤ Product has decreasing influence
Institutional Producers ➤ Offering specialized products
Internet access to lead management, quote generation,
application capture, application status tracking, service
requests, and product information for broker/producers
• Correspondence generation, claims history review, rateups,
rejects and counters, apply riders/exclusions,
approve/reject applications, and service requests for
underwriters
• Verify payment information, initiate fulfillment process
(ID cards and schedule of benefits packet generation) for
customer service representatives.
Product Pricing
Key Motivators
Captive Producers ➤ Price has little influence
Independent Producers ➤ Price must be reasonable
Institutional Producers ➤ Price is critical
Compenstaion
Key Motivators
Captive Producers ➤ Compensation must be reasonable
Independent Producers ➤ Compensation is critical
Institutional Producers ➤ Compensation has little influence
