How to Optimize Digitalization for Life Insurance Distributors

How to Optimize Digitalization for Life Insurance Distributors

By Equisoft - 15 May 2024

Why digital transformation is critical for distributors

The days of manual management of agency assets and operations are over. Digitalization promises to
increase distributors’ potential for revenue growth and improved margins. Digital solutions that
automate everything from reporting to advisor activity management are revolutionizing how we run our

  • Automation of commission accounting increase accuracy and speeds payments
  • Case managers can more effectively track and manage activity
  • Issuance of guaranteed approval almost immediately
  • Sales and service happen in real time because client data is automatically presented in real time

Two things many distributors ignore‒that derail transformation

Digital transformation is about more than just technology implementation and access to data, however.

Make speed limit signs a thing of the past

Most life insurance organizations were not ‘born’ digital. Almost all distributors are in some sort of middle stage between the old, manual ways of running their businesses and the new, fluid digital approach. Which is to be expected, and not at all a problem, since every step taken towards full digitalization increases efficiency and adds growth potential to the business.

But what some distributors don’t consider is that:

“No matter where you fall on the digital transformation spectrum, you will always be only as digital as your least digital partner. And you are only as automated as your most manual process.”

Take, for example, a BGA or MGA that has implemented new solutions like a digital agency management system (AMS) and integrated advisor tools, but still doesn’t have carrier feeds from each of the insurers they work with—and still process policy applications that arrive via fax. They have shiny new tools they can be very proud of, but a significant part of their business will still be not much faster, no less costly than it was twenty years ago.
When digital processes encounter manual steps the workflow reverts to manual, even paper-based speeds.

The data flow is effectively dammed. Approvals and claims timelines stretch back out to historical levels. data slows. The growth that was hoped for in the wake of digital transformation investment is not realized.

On the other hand, an MGA or BGA who implements those same solutions but then adopts a strategy of working only with partners who can also work with them digitally, will find that speed limit signs become a thing of the past. In this case, applications are completed and submitted electronically.  Data flows where it is needed, from carriers to distributors to advisors and ultimately clients. Communication of application or claim status is greatly improved. Activity required to manage issues is automatically flagged and tracked. New business submission is streamlined, and the agency’s growth potential is sharply increased.


What is your agency’s digital strategy?

Technology was not the differentiator between those two agencies. It was strategy. And the importance of strategy is magnified during periods of change. It’s not enough to have implemented the covergirl technologies that most associate with digital transformation. It’s more about how you choose to conduct operations, who you choose to partner with and how you make decisions that create competitive advantage in changeable conditions.

“If you’re looking for revolutionary growth—your moonshot—then you need to amplify tools, technology and data with strategies for maximizing their benefits. That means disposing of old legacy thinking at the same time you discard your legacy technology. Maximum growth potential comes from embracing a new way of working based on what your new system capabilities make possible.”

Some of the most advanced agencies have already embraced this idea and are seeing remarkable levels of automation. And it’s happened in a very short space of time. These digital strategists are far more efficient than their competitors. They enjoy better margins, faster new business processing and great agent satisfaction. Their operations are more scalable and set them up for rapid growth in the coming years.

The unexpected way to realize the potential of digital sales solutions

Greater emphasis has been placed on digital sales solutions over the past 18 months than ever before. But the results reveal that the short-term growth potential of these efforts likely lies in an unexpected direction.

Customer expectation trends show that consumers are increasingly:

  • Comfortable interacting remotely (true even before the pandemic—but critical during and post)
  • Willing to self-educate
  • Independent when making a purchase

As a result, carriers are creating more and more simplified products that can be offered with guaranteed acceptance. When delivered through Direct to Consumer (D2C) digital portals, they speed underwriting, improve customer experience and lower barriers to entry for consumers reluctant to engage with agents.

The idea makes all the sense in the world. For most, these new direct channels held the promise of new digital growth opportunities.

Unfortunately, the reality is D2C hasn’t yet delivered on its revolutionary promise.

In isolation, a D2C portal is just one more channel, one more tool, for finding a customer. It may even just replace sales that would have happened anyway with an advisor. Yes, the costs may be lower, but no one is seeing their top-line revenue explode after introducing D2C offerings.

But that shortcoming reveals a more genuine opportunity for distributors.

If agencies are able to think about growth strategically and define how these digital offerings should be integrated with all other existing channels, then a new potential for profound change and growth is created.

Channel integration will enable distributors to look beyond easy fulfillment of simple client needs and focus on the greater value of the entire customer journey.

Having all channels working together will enhance the total customer experience in every interaction along the way. Data shared between digital portals, the agency management system, carriers and advisors can generate vastly improved, highly granular and useful customer profiles.

These profiles and the experiences that can be created around them can significantly increase lifetime customer value.

Data-driven profiles can generate leads that were previously unknown. Automated marketing systems can follow-up on those leads, and agency management systems can guide advisors to more
opportunities than they have ever had. Customer journeys can be tailored so that consumers are engaged in whatever manner they wish (portal, agent, support staff, automated communication) whenever they need. Marketing, sales, service can be integrated and hyper-personalized to a degree never before possible.

Differentiators for digital agencies

Within the channel, competition has already shifted to the arena of digital competence. But, today’s ‘modern’ technologies will quickly become table-stakes. The biggest growth will be seen by those
agencies that see beyond their tools and fully adopt a digital-first mindset and strategy. Those who are best able to integrate and leverage the data from all channels will have the best insight into their clients, giving them the best platform for growth.

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