Growth and retention continue to be the top business goals affecting IT investments
In our current hypercompetitive marketplace, with continued pressure on rates, many carriers are focusing on improving their distribution practices to drive growth. Carriers are expanding channels, adding distributors, moving into new territories, and working to optimize their existing channel in order to improve customer acquisition and retention. Designing, developing, maintaining, and managing productive channel relationships can create a sustainable competitive advantage.
New York, NY (Mar. 20, 2017) – Celent has released a new report, Distribution Management System Vendors: North America Insurance 2017, by Karlyn Carnahan, a Research Director with Celent’s Insurance practice.
Growth and retention continue to be the top business goals affecting IT investments. With continued pressure on rates, many carriers are focusing on improving their distribution practices to drive growth.
Carriers are expanding channels, adding distributors, moving into new territories, and working to optimize their existing channel in order to improve customer acquisition and retention. Designing, developing, maintaining, and managing productive channel relationships can create a sustainable competitive advantage. Some carriers are placing their priority on servicing distribution channels and improving service to distributors, increasingly using producer service excellence as a way to retain and grow business. Others are focused on managing the compliance aspects of distribution management — assuring the distributors have the right licenses, and that state appointments are made in a timely manner. Many carriers are focusing on using compensation tools and techniques to more effectively stimulate production.
Data is a hot topic. Most carriers are looking at more effectively using data to manage carriers strategically rather than tactically. In addition, carriers are adding channels including wholesalers, GAs and MGAs and partnerships with other carriers. On the life side carriers work with exclusive agents, independent marketing firms, financial planners, banks and a wide variety of other channels. These multiple channels are effective at targeting different aspects of the market, but add complexity when it comes to channel management.
“A wide variety of issues cause difficulties for carriers when it comes to effectively managing the distribution channel. In the current low-growth economy, the impact of such an unintegrated approach is more severe. It is critical to increase production within existing distributors (keep them happy), necessary to expand into new producers (bring them onboard quickly and with minimal hassle), and essential to monitor performance of all sales activities (know who is doing what and take action appropriately). Distribution management systems provide the tools and technologies to help carriers more effectively manage their channel relationships,” Carnahan commented.
“As a group, vendors continue to make significant investments in portal systems. The solutions are delivering more functionality, improving configuration tools, and being more connected, with SOA and web services becoming the de facto standard. Although these trends are all very good news for insurers, they do make the competition facing vendors that much more daunting,” she added.
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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies (NYSE: MMC).