Insurance Distribution-mix & Target Market

Insurers that have embarked upon a digital transformation, a revamped model that supports high-volume sales for simpler individual life products is needed, and traditional channels are often no longer the primary method for engaging with customers. Companies that transform must look at the overall sales strategy of both direct vs indirect marketing and selling. They must make investments that can achieve target returns, whether through distribution/brokerage centers, the captive agency market, or independent agents while offering appropriate incentive programs to inspire the workforce (e.g., partial commissions for doing little work around sales and servicing but being available when a customer needs them). 

Companies must align their product and distribution strategies to achieve optimal business transformation. If departments are implementing their own individual objectives without alignment to enterprise transformation goals, this can lead to critical gaps across the value chain for the customer.

Priorities within the distribution 'house' are constantly shifting, and new spaces are always developing. Carriers need to frequently look across the insurance value chain at their priorities, and as they realign there are several issues and opportunities which companies will need to consider:

• Competitive compensation, retaining top producers while incentivizing the right mix of products
• Growth through affiliate channels and other less traditional channels
• Optimizing brand experience across sales channels
• Empowerment for exclusive/captive agents: developing a wide range of trust and mutual benefit with the customer, utilizing CRM tools and features to build upon customer relationships
• Achieving exclusiveness across the value chain through ease of technology, simplicity, and speed to market, providing the ability for carriers to differentiate themselves within the market, and establish brand uniqueness while delivering quality, reliability, compliance, features, etc. 
• Implementing mechanisms for prospect management
• Lines of communication: engagement between front and back office (within the distribution 'house') for those channels in which agents need to communicate with underwriting, billing, claims, IT, etc., including defined processes and procedures
• Management of agent's book of business through CRM optimization (or other tools, such as a distribution management platform), along with a focus on front-office capabilities and skills training
• Tiering benefits to reward or support valued agents, to help the company achieve overall market growth and objectives
• Up-sell/cross-sell across the value chain to build the sales pipeline

Successful distribution will require striking the right balance: relying solely on a systems transformation or a digital transformation will not be enough. The physical and virtual worlds must feel seamlessly linked for agents and customers/prospects. 

Insurers must consider how a customer and agent (including those in a call center) will need to engage with the insurance carrier and design their agent and customer journeys accordingly. Employing an omnichannel approach is table stakes, providing customers the right mix of traditional and digital channels and providing agents the right mix of support and self-service.