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August 06 2021 | Mark Breading

How far along are commercial lines carriers in delivering digital solutions to their agents and other distribution partners? Answering that question depends on whether you are a glass half-empty or glass half-full type of person. The pessimist might say: Despite huge investments in technology over the past few decades, there is still a great deal of manual processing, the time for the rate-quote-bind process is too long, and the goal of truly making it easy for the agent to do business with the carrier is still elusive. The optimist would cite enormous industry progress, as many companies have increased straight-through processing to a significant percentage of the business, digital self-service capabilities for both sale and service are widespread, and agent-carrier connectivity, in general, enables astounding volumes of electronic business flow.

MBBlog080621350x233SMA recently surveyed carriers focused on the small commercial market to assess the current state of digital capabilities offered to distribution partners, the barriers to implementation and adoption, and the future plans for enhancing or delivering new digital capabilities. What we discovered is that rather than taking a glass half empty or full approach, the better analogy is a road trip, with the kid in the back seat regularly asking, “Are we there yet?” It turns out that this is not such an easy question to answer. Once you get by the lofty goals of STP and easy of doing business (EODB), there are a variety of specific functional capabilities that are important. By the way, STP and EODB are still the top two reasons that carriers invest in tech solutions for distribution, and they do provide a north star for plans in this space.

SMA’s research tracked 14 different digital sales-oriented capabilities and 17 servicing capabilities, starting with a carrier’s satisfaction with the state of the offerings to their distribution partners. Suffice it to say that while some are satisfied with their offerings, many are not. For example, only about a third are satisfied with their quoting capabilities. Satisfaction levels on the servicing side are higher, but there are still many companies that are dissatisfied or do not offer the digital capability. In terms of plans and projects, there is lots of investment and activity in addressing the areas where companies believe they are weak. For example, data pre-fill is the top project area for sales capabilities as it is a critical starting point for achieving STP.

It is important to note that there are both business and technology roadblocks to success in the distribution technology area. For example, few will be surprised to learn that limited IT resources are the number one barrier on the technology side. In short, this is a very critical but complex area of the insurance business, and the industry as a whole is moving forward to enhance the digital capability provided to distribution partners. It is an ongoing journey, but like that proverbial kid in the back seat, many executives will continue to ask, “Are we there yet?”

For more information on commercial lines distribution expansion strategies, see our recent research report, “Distribution Technologies for Small Commercial: Carrier Progress and Plans.” SMA is also introducing a new research series with perspectives from the distributor viewpoint. A regular series of research reports will be published based on surveys and interviews of agencies, brokers, MGAs, and others in the distribution channel, including insights from ReSource Pro’s large footprint of distribution clients. Contact the author for more information on this new research and advisor services offering for distribution.


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To learn more, please contact:
Mark Breading
Partner
Strategy Meets Action
614.562.8310