Wholesaling: Finding The Opportunity In The Disruption

Wholesaling is a critical part of the distribution chain, and many forces that will impact its future are converging. Wholesaling models must adapt to the changing environment in order to remain relevant and valuable.

Advisors will continue to value external wholesalers for their product expertise and sales and marketing support but, going forward, they expect more value-added services. Wholesalers and advisors strongly agree that wholesalers need to bring more to the table. The global pandemic, rapidly evolving technology and disruptors yet to be envisioned will reshape how advisors and wholesalers meet at that proverbial table.

Redefining Face-To-Face

Face-to-face communication is foundational to wholesaling relationships. Prior to the global pandemic, this meant sitting down in person. Technology changed the way advisors and wholesalers communicated but we never anticipated it to accelerate so quickly. Pre-COVID-19, seven in 10 advisors said they expected wholesalers to be able to communicate virtually when needed.

Seven in 10 external wholesalers said they expected there would be more frequent videoconferencing in the next 3-5 years. When asked about their most valued relationships, both advisors and wholesalers who were using videoconferencing indicated they would be using it more in the future. Videoconferencing has transformed how we communicate, and face-to-face communication no longer implies being in the same location. The question is, will we keep what we’ve learned and experienced or go back to business as it was?

Technology Is Changing Expectations

Technologies, a significant investment for insurance carriers, promise to build efficiencies, which ultimately increase productivity. Delivering technology that advisors will value is critical to the carrier achieving a return on their investment. Pre-pandemic, more than half of advisors said that the way they work with wholesalers would change because of technology; 50% of external wholesalers agreed.

Carriers also should consider their wholesalers’ perspectives and what their wholesalers will value. It’s important to note wholesalers and advisors don’t necessarily agree on which technology advancements are most valued by advisors. For example, 55% of external wholesalers say simplification of the ticketing and submissions process is the top technological advancement to bring value to advisors, but only 23% of advisors agree.

The current environment, however, has accelerated submission of business, with many companies now offering e-app, accelerated underwriting, e-signatures, e-delivery and even e-claim. The ability to do business through a virtual environment has created not only new expectations but also opportunities. Technology that simplifies the process of doing business has transitioned from a competitive advantage to table stakes. The challenge for carriers is to retain the fundamental attributes that remain most valuable to advisors and wholesalers while simultaneously adapting to address technology advancements. Carriers who cultivate solutions and nurture new opportunities will foster future success.

Technology is the thread providing business continuity throughout this unprecedented reality. This industry remains a relationship business, and the global pandemic redefined not only how business is processed but also how everyone relates to and interacts with each other. Carriers who had invested in technology and laid the groundwork were able to pivot quickly, and the change thought likely to occur in 3-5 years is actually in place now.

The ability to adapt, create, innovate and thrive using new delivery systems, greater efficiencies and focused resourcefulness will be the keys to success. In the end, some adaptations may be only temporary, but some may be the beginnings of something new and possibly even better.

Laura A. Murach, ACS, ALMI, LLIF, is associate research director, distribution research, LIMRA. Laura may be contacted at [email protected].