Lack of digital tools drives wedge between insurers, advisors

Failure to leverage digital tools to streamline business processes is tainting an otherwise high financial advisor satisfaction score for U.S. life insurance and annuity companies, according to new research from consumer insights firm J.D. Power.

“If you ask the agent or the advisor why they work with a company, the number one answer is not compensation — it’s how effective and easy you are to work with,” Craig Martin, senior director of customer solutions for the insurance group at J.D. Power, said.

He explained that ease of interaction and user-friendliness can suffer when the digital tools both agents and clients expect today aren’t adequately leveraged, noting that busy professionals “don’t want to spend a bunch of time calling the call center or faxing stuff in.”

“If you’re old-school and you’re not easy to work with, you’re probably not competing very effectively. Those are the big-picture storylines we saw that were not really shocking, but it does reinforce that to be successful here, you must think about taking care of your partners and enabling them to be successful,” Martin said.

Agent satisfaction high overall

J.D. Power’s inaugural Life & Annuity Distribution Partner Experience Study found a high overall satisfaction rate for life insurance and annuity distribution partners.

“Generally, the metrics that we looked at showed there’s a pretty high bar set here by the industry, and it’s well-executed. It’s a strong storyline for the industry; generally speaking, we see pretty good marks,” Martin said.

However, scores tanked when it came to ease of interaction. Less than 40% of financial professionals found their life insurance and annuity partners very easy to work with. Just above 30% of professionals described the balance between self-service and live support needed to work with partners as “sub-optimal,” and 20% said their annuity providers need to “provide better self-service capabilities.”

Although this indicates room for improvement, the study also demonstrated a clear return on investment if those adjustments are made. Among the professionals who said their L/A partners are “very easy to work with,” brand loyalty rates were at 78% for life insurance brands and 71% for annuity brands. A comparable 71% of respondents said most L/A partners offer well-designed portals.

The digital missing puzzle piece

According to Martin, the low scores in ease of interaction directly relate to challenges with digital engagement. Further, he noted that the three biggest aspects of advisor satisfaction identified in the study all track back to these same issues:

1. Compensation structures
2. Ease of doing business
3. Client support

“The digital falls into a lot of different places in a lot of different ways, but I think it’s important both from the ease of doing business piece, but also from a compensation piece and then the end client piece. All those three key pillars do translate in a lot of different ways to digital,” Martin said.

For compensation, he said it’s about digital tools that help a professional understand what they are selling, what’s closed, where they are in payout, what potential bonuses are coming and other sales aids.

Ease of business is related to how easily a professional can get a customer from the initial application all the way through to underwriting, quoting approval and getting them the policy.

And, finally, digital tools also mattered for enabling agents to take care of their clients — empowering customers with self-service options and helping them easily and quickly complete mundane tasks that improve customer service, such as updating an account or changing an address.

“It’s about efficiency, but it’s also about enablement, especially on the annuity side, understanding that product, being able to access information, whether it’s sales materials or guides or even tracking a competition,” Martin said.

He emphasized that speed and efficiency are crucial for improving the digital aspect, along with minimizing effort and helping agents take a load off the customer.

Shortcomings reveal opportunities to improve

Although the study results were positive overall, there’s no denying the lower-marked areas indicate room for improvement on the digital front.

“I think there’s an opportunity, and I think there are two parts to it. One is capability, and you can’t ignore capability; it’s moving from traditional paper to online submission. The other is just basic design and flow and usability,” he said.

His advice is for life insurance and annuity partners to lift best practices from those who scored high satisfaction ratings on the consumer side.

“The ones who are best in class on digital design tend to be more consumer-centric,” Martin noted. “Lifting some of those best practices and applying those here to make it more user-friendly, especially for that next generation of financial professional who is growing up in digital and has expectations that are probably different than someone who’s been in the business for 25 years. The digital front is probably one where they can take a page out of more of that consumer-centric front.”

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Rayne Morgan is a journalist, copywriter, and editor with over 10 years' combined experience in digital content and print media. You can reach her at [email protected].