Existing approaches to distribution quality management mean many UK life insurers are missing out on potential value within a core business process. Despite significant amounts of customer, sales, experience, and third-party data, life insurers face key data gaps and the inability to aggregate data for multi-dimensional analysis.
These limitations prevent life insurers from visualising distribution drivers, quality measures, and agent performance in a way which allows them to manage distribution quality effectively. What insurers need is better data, analytics, and technology to bridge the crucial internal data gaps and develop multi-dimensional analysis of their distribution.
When it comes to distribution quality management, you don’t know what you don’t know
In order for life insurers to achieve better results from their distribution channels and IFA’s, they must improve data granularity as it relates to distribution quality management.
The starting point is to identify the attributes that define what ‘good business’ looks like and apply that across the distribution group to benchmark each distributor.
By having a granular understanding of the performance of each distributor measured against a set of benchmarks, both insurers and distributors have transparency against which to set commission, pricing and other variables to optimise distribution.
From the distributors perspective, this will give good visibility of how their client profiles, and attributes fit within the benchmarking and help facilitate the commercial arrangements .
To achieve this with their distributors, life insurers must hone their existing approach to get a deep or granular enough understanding of:
- The quality of the business they’re writing (underwriting and disclosures, lapses, claims)
- The drivers behind IFAs’ performances (product features, service levels, price, commission)
- How they’re competing against the market
- How to write more business profitably
- Which agents they should be targeting
These are substantial gaps, and hold insurers back from meaningfully understanding and improving distribution performance and agent sales. Lack of granularity also prohibits insurers from properly measuring themselves against their objectives and their peers in terms of what they define as good quality business.
Luckily for life insurers, improving distribution quality management doesn’t have to be an arduous process.
Life insurers improved data and analytical tools can optimise distribution quality management
To move the needle on their distribution goals, insurers must find the intersection between customer segmentation, advisor segmentation, and the associated financial performance and experience, as well as what it all means for price and commission. Access to granular, accessible, real-time data, and tools which deliver actionable insights, enables UK life insurers to gain a clear view of agent performance from a profit and sales/revenue perspective.
With this multidimensional view of distribution quality, insurers’ improve their understanding of both their agents and the quality of the business they’re writing. This clears the way for insurers to improve their distribution quality, agent performance, and their ability to target the agents and channels which will deliver the strategic results they’re looking for.