Transforming The Agency Channel

This article was first published on July 20, 2020.

Traditionally, the mainstream distribution channel partners for life insurance sales, have relied on high-touch physical client interactions for generating leads and closing sales. However, due to COVID-19, insurance distribution is also undergoing significant changes as the forced reality of virtual engagement is encouraging further adoption of digital, and distributors are willing to adopt to new ways of working. Our point of view in this report is focused on best practices for insurers to drive Sales Force Effectiveness in Agency channel.

Our primary customer and agent research suggests that advisors are not sure if customers want to engage in such times and hence are reluctant to reach out. Some customers don’t want to meet physically, are overwhelmed and anxious about their financial futures, but do want to engage about their financial future including insurance. There is increased awareness and interest about Life and Health Insurance from customers. What’s also clear is that customers as well as agents are expecting more from their insurers than before.

We have come up with a framework with three core elements for insurers to think about for driving better sales force effectiveness in the agency channel.

Redefine value propositions: As the expectations of consumer and agents from insurers are changing, insurers would need to redefine and communicate value propositions to set the new direction

Be clear on strategic choices: While the exact the strategic choices may vary across insurers and markets depending on their starting position, the pandemic has thrown many strategic choices that need to be made, There may also be lot of trade-offs, that need to be made – for e.g. customers will not be keen to do physical medical examinations, and hence tele-medical and other under-writing limits will need to be re-evaluated, this also means that agreements with reinsurers on such limits will have to be reworked. Being prepared about such strategic choices and trade-offs will ensure better readiness for the channel.

Double down on core execution levers: Rethinking through three core execution levers to enable a business model that focuses on protecting business activity in the short term while setting up for long term success

Digital advancement is at its peak and adoption is no longer an option. While the current focus is on protecting business downside, the timing is right for insurers to drive the digital agency model at scale to enable agents to be more effective and productive than ever before and transform the channel.