Traditionally, success in the middle-market and large commercial segments relied on deep expertise regarding customer risks and deep relationships with a network of distributors with access to those markets. Those capabilities are still fundamental to success, but lately the carriers’ digital capabilities have become increasingly essential in these markets.
Distribution partners – whether retail agencies, brokers, wholesalers or MGAs – want to do business with carriers that reduce the friction, shorten the quote-to-bind time and provide a good appetite match for the business they want to submit. Naturally, distributors are also interested in product fit and commission structure, but business tends to gravitate to carriers that feature ease of doing business. And all of these things are taken into account as carriers’ channel strategies evolve in the mid/large commercial segment.
See also: Tomorrow’s Insurance Is Connected
A recent SMA Research report, “Channel Strategies and Plans for P&C Commercial Lines: A View of Small and Mid/Large Commercial Segments,” highlights the aggressive stance that many carriers are taking in expanding their distribution networks over the next few years. To gain a deeper understanding of the digital technology capabilities that will support the existing and expanding channel strategies, SMA recently surveyed carriers focused on the mid/large commercial market. The research assessed the current state of digital capabilities offered to distribution partners, barriers to implementation and adoption and plans for enhancing or delivering new digital capabilities in the future.
SMA’s research tracked 14 digital sales-oriented capabilities and 17 servicing capabilities, starting with a carrier’s satisfaction with the state of their tech offerings to their distribution partners. In terms of digital sales capabilities, the overarching theme is that anything that improves the ease of doing business and provides more self-service capabilities is a focus. On the servicing side, both agent and policyholder self-service portals top the list of digital projects. New or enhanced capabilities related to policy, billing and claims are also in the mix.
It is important to note that there are both business and technology roadblocks to success with distribution technology. For example, few will be surprised to learn that limited IT resources are the #1 barrier on the technology side. However, from a business viewpoint, understanding customer needs and creating the right value propositions can prove to be a challenge.
All the new channel strategies and digital project activities reinforce the notion that there is a real revolution going on in the distribution space. For most insurers, standing still will not be an option. Winning strategies will include strengthening capabilities and relationships with current partners and extending distribution networks into new spaces.
For more information on commercial lines distribution expansion strategies, see our recent research report, “Distribution Technologies for Mid/Large Commercial: Carrier Progress and Plans.” SMA is also introducing a new research series with perspectives from the distributor’s point of view. A regular series of research reports will be published based on surveys and interviews withs agencies, brokers, MGAs and others in the distribution channel, including insights from ReSource Pro’s large footprint of distribution clients.
