By Cyril Tuohy
Insurance carriers working on the next generation of producer technology platforms are focused on smoothing out the “pain points” with brokerage general agencies (BGAs), according to a report by a noted insurance technology analyst.
BGAs remain an important distribution channel for carriers selling life insurance products. Yet, sales have been hampered by inefficiencies surrounding producer recruitment and certification, and paper-based remuneration and incentive payments.
“It is still standard practice to send bulk, nonitemized commission payments to producers and their brokerage general agencies ... forcing the BGA to reconcile the accuracy of its producers’ commission and incentive payments in a very manual, inefficient way,” said Aite Group analyst Todd Eyler.
“It’s common for producers to deal with 10 carriers and they all have different workflows and different systems,” Eyler told InsuranceNewsNet.
For independent agents selling life insurance with products having little differentiation, the inefficiencies remain cumbersome, irritating and labor intensive, said Eyler, author of a report titled, “Next-Generation Insurance Producer Management: The Race is On.”
The good news, he said, is that the new distribution technology platforms from companies such as Surance Bay and Vue Software — some of which have been founded by former agents and producers — are designed to address producer certification and remuneration.
In addition to more efficient “onboarding” of, and payments to, agents and producers, the new software platforms integrate new sources of data to help agents target life insurance and annuities, the report said.
New data sources include neighborhood-level demographic information revealing where an annuity might have a high penetration rate.
The technology platforms integrate social media data (giving agents clues to life events) and consumer lifestyle data (predicting health and mortality risk for life insurance) to yield clues to agents and underwriters, Eyler said.
Carriers' adoption of these new platforms will make the agent's job of selling insurance easier, and will help differentiate carriers as many life insurance products evolve into a commodity under the relentless assault of technology, Eyler said.
Annualized premiums, face amounts, and the total number of overall individual life policies shrank by 4 percent, 5 percent and 3 percent respectively in the first half of this year, compared with the year-ago period, according to LIMRA.
Overall individual life sales are made up of universal, variable universal, term and whole life.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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