5 Ways Carriers Can Optimize Distribution Channels

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Insurance carriers face a daunting challenge – how do they adapt captive distribution channels to deal with the competitive pressures from direct channels? Carriers must make fundamental shifts in the way they support captive channels in order to drive a strategy that supports continual premium growth, accelerates production and ensures that every sales person can sustain and grow a profitable book of business.

The new model must eliminate manual processes that are primarily driven by individual skill and rely on the agent or representative to determine the best offers for each policyholder or situation. This means captive channels must be supported by nimble technology that empowers agents to sell better and maximize the value of each policyholder relationship.

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5 Ways Carriers Can Optimize Distribution Channels

  1. 1. 5 WAYS CARRIERS CANOPTIMIZE DISTRIBUTIONCHANNELS
  2. 2. Insurance carriers face a daunting challenge – how do they adaptcaptive distribution channels to deal with the competitive pressuresfrom direct channels? Carriers must make fundamental shifts inthe way they support captive channels in order to drive a strategythat supports continual premium growth, accelerates productionand ensures that every sales person can sustain and grow aprofitable book of business.The new model must eliminate manual processes that are primarilydriven by individual skill and rely on the agent or representative todetermine the best offers for each policyholder or situation. Thismeans captive channels must be supported by nimble technologythat empowers agents to sell better and maximize the value of eachpolicyholder relationship.Thomas HarringtonDirector – Industry Principal, InsurancePegasystems
  3. 3. 5 Ways Carriers Can Optimize Distribution Channels There are 5 key steps carriers can take to increase the value of their distribution channels and improve the effectiveness of their captive sales force including: `` Execute the sales process better `` Leverage intelligent insight to drive more sales `` Build profitable, long-term relationships `` Fulfill the policyholders’ needs in real time `` Help the channel force learn from success Productive Insurance Agent3 5 WAYS CARRIERS CAN OPTIMIZE DISTRIBUTION CHANNELS WWW.PEGA.COM SHARE THIS EBOOK:
  4. 4. 1 Execute the Sales Process Better The key to improving the effectiveness of the captive channel is to improve performance one individual at time. It starts by making proven sales processes techniques – the best practices that are the hallmarks of top performers – available to every sales representative. Next, marry these best practices with insight on customer needs or propensity to gain a powerful combination for driving sale success. Intelligent systems, powered by business process management (BPM) technology, can help carriers consolidate data from enterprise sources, present the right information at the right time to the agent and use the information to drive the appropriate next process steps. Embedded rules and process match the carrier’s capabilities to the policyholder’s needs and leverage analytics to refine producer interactions based on customer propensity. Agents Receive New System Interprets Applies Relevant Executes Optimal Manages Sales Leads Information Customer Insight Process Based Interaction to on Insight Completion Review In-force 30 Year Agent Coverage Long-Term Policyholder Add New Driver Assess Covered Drivers Package with Umbrella 2 Year Agent Auto Policyholder New Homeowner Umbrella Cross Sell Assess Jewelry New Hire Coverage New Prospect Just Married Initiate Jewelry Rider Using enterprise data combined with predictive and adaptive analytics, you can rapidly determine your customer’s intent to deliver a treatment appropriate to the individual and the situation.4 5 WAYS CARRIERS CAN OPTIMIZE DISTRIBUTION CHANNELS WWW.PEGA.COM SHARE THIS EBOOK:
  5. 5. 2 Intelligent Insight Drives More Sales Carriers can help producers mitigate the direct challenge – and sell more – by helping them work smarter instead of harder. Using dynamic analytics and real-time data, carriers can: `` Prompt timely action based on customer insight, and provide advice on the sales activities with processes and offers that have the highest likelihood of driving sales conversions. `` Design dynamic sales strategies that can be personalized and adapted to each sales opportunity. `` Continuously optimize interactions by adding context and relevance to recommendations. The result is a dynamic sales platform that improves producer effectiveness by helping execute value added sales activities, customize relevant cross-sell/up-sell/retention offers and adapt strategies to the characteristics of each opportunity. NEW SALES CHANNELS AND 300% INCREASE IN NET PROMOTERS SOLUTION RESULTS In Poland, per capita income has tripled in the last 20 years and the shift in demographics When launched, the Pega Portal displayed all products available to that bank, provided a presented an opportunity for ING Poland and they set out to fill this new market need with standard view of the customer, as related to that bank agent and the capability to execute new products. policy servicing transactions. Bank agents selling new products are now able to bind these products at the point of sale because underwriting, pricing algorithms and compliance ING set out to broaden their distribution network in order to reach the growing and geo- rules are embedded into the application process. graphically dispersed population. A new technology platform was needed to enable their aggressive growth goals. ING needed a platform that was easy to configure, suited to The ING team was able to attain 80 percent reuse with the platform, which enabled them to handle standardization and specialization of rules, and was able to integrate with external rapidly extend the platform, adding an additional banking channel and three new products and internal systems. ING Poland found their technology platform with Pega. Pega created in less than five months. ING had a small team of three to five developers and business a sales and distribution framework that integrated with both internal systems and external resources who developed and architected this new sales and distribution framework, which portals, enabling the roll out of new products through a new bank in less than four months. will be used to add 20+ points of distribution in under one year. “We did something that would have been impossible with antiquated, stack-based solutions: with a small team of developers using Pega technology, we were able to deliver a sales portal to our first banking partner in just three months.” Pawel Brzeski CIO, ING Poland Read more about the case study5 5 WAYS CARRIERS CAN OPTIMIZE DISTRIBUTION CHANNELS WWW.PEGA.COM SHARE THIS EBOOK:
  6. 6. 3 Build Profitable, Long-Term Relationships Successful agents or financial service representatives have the unique ability to cultivate and grow long-term relationships, which are the foundation for a profitable book of business. Producers always need to think about how they can maintain their customers and determine how to continuously maximize the relationship. Carriers can leverage Next-Best-Action technology that continuously adapts strategies for the agent to use with the particular customer, equipping sales personnel to proactively or reactively add value during every interaction. Because Next-Best-Action dynamically adjusts actions and offers based on the context of the situation, the customer and the objectives of the business, producers become more effective at understanding their customer’s needs and intentions and are better positioned to continue to add value throughout the life cycle of their relationship. Using enterprise data combined with predictive and adaptive analytics, you can rapidly determine your customer’s intent to deliver a treatment appropriate to the individual and the situation.6 5 WAYS CARRIERS CAN OPTIMIZE DISTRIBUTION CHANNELS WWW.PEGA.COM SHARE THIS EBOOK:
  7. 7. 4 Fulfill Customer’s Needs at the Point of Interaction As the old maxim goes – time kills all deals. This saying is particular pertinent to the fulfillment challenges sales personnel face trying to convert a new prospect or execute a successful cross-sell or up-sell opportunity. The ability to execute the right sales activity, in real time, increases the likelihood of a successful sales conversion. Most often, the issue that prevents real-time execution is the gap between the front office and the back office. Carriers can bridge this gap by integrating the necessary support tools directly into the producer desktop. By unifying the desktop, the front and back office become linked in real time, enabling sales personnel to leverage needed tools, like case management, to expedite work requests across operational silos and systems and drive work towards speedy resolution. A unified desktop Support Sales Interaction provides all the tools in Real-Time needed to perform sales activities at the point of interaction - increasing the likelihood of success. Accelerate Resolution and Agent Opportunity Fulfillment of Request Unify the Desktop Fulfillment Forward to Point of Interaction Automate Cases & Processes Accelerate Resolution Across Operations Dynamically Integrate With Back Office Built-in Connectivity Underwriting* Policy Admin * Billing * Claims Marketing * Sales Force Mgmt * Compliance7 5 WAYS CARRIERS CAN OPTIMIZE DISTRIBUTION CHANNELS WWW.PEGA.COM SHARE THIS EBOOK:
  8. 8. 5 Help the Entire Captive Force Learn From Success To support next generation of insurance agents and financial representatives, carriers need to make the collective wisdom of the channel available to all insurance producers. When this wisdom is combined with real time data and adaptive analytics, sales personnel can far more easily optimize their book of business potential. Intelligent tools that enable business users to simulate and test the potential impact of sales strategies before putting them into production can leverage knowledge about previous interactions to determine the Next-Best-Action for the policyholder. Combined with the ability to monitor performance in real-time, carriers can successfully leverage collective wisdom to optimize production. Pega’s Visual Business Director allows you to simulate impacts on your It also enables a global view across propositions, providing visual business and graphically view its impact on SLAs, revenues, volume, insight into the revenues generated by a new offer as well as its profitability targets or any other desired benchmark. positive or negative effects on other propositions.8 5 WAYS CARRIERS CAN OPTIMIZE DISTRIBUTION CHANNELS WWW.PEGA.COM SHARE THIS EBOOK:
  9. 9. How Pega Enables Next Generation Captive Channel Designed to suit the specific needs of captive channels, Pega Distribution Management for Insurance bridges enterprise silos to provide producers with real-time data on policyholder value, needs and propensity. The Pega solution helps every agent or financial representative execute like a top performer –regardless of skill or tenure. The captive force can leverage predictive and adaptive analytics to personalize each sales interaction and dynamically match the carrier’s capabilities to each policyholder’s unique needs. Pega optimizes each sales interaction and seamlessly integrates the front and back office to help every agent fulfill sales activities in real time. With Pega, carriers can attain an agile, intelligent sales platform that can accelerate sales production and maximize book of business potential for generations to come. 1 Optimize Sales 2 Mitigate Price 3 Monitor, Control and Strategies with Pressure By Helping Adapt Strategies Based Next-Best-Action Every Agent/ on Performance Representative be a Trusted Advisor Measure Simulate Learn9 5 WAYS CARRIERS CAN OPTIMIZE DISTRIBUTION CHANNELS WWW.PEGA.COM SHARE THIS EBOOK:
  10. 10. About the AuthorTom Harrington is Director - Industry Principal Insurance atPegasystems Inc. Tom supports Pega’s global strategy for theinsurance market and has more than 15 years of insurance industryexperience. Prior to joining Pega, Tom led product development,distribution strategy and technology initiatives at Liberty Mutual, andwas a commercial lines insurance broker at Aon.Contact him at Thomas.Harrington@pega.comAbout PegasystemsPegasystems, the leader in business process management andsoftware for customer centricity, helps organizations enhancecustomer loyalty, generate new business, and improve productivity.Our patented Build for Change® technology speeds the delivery ofcritical business solutions by directly capturing business objectivesand eliminating manual programming. Pegasystems enablesclients to quickly adapt to changing business conditions in order tooutperform the competition.For more information, please visit us at www.pega.com/insurance.SHARE THIS EBOOK:© Copyright 2013 Pegasystems Inc. All rights reserved.All trademarks are the property of their respective owners.

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