How Can Carriers Keep Up with Evolving Selling Models?
To focus on profitable growth, insurance carriers must re-examine their Marketing, Sales and Fulfillment functions.
The insurance sector is marked with volatility today, especially within the property and casualty and financial sub-sectors. Contributing to this environment are variables like inflation, lackluster investment performance, and regional factors like weather-related events and natural disasters.
Despite this unpredictability, insurance carriers should remain optimistic about the opportunity for premium growth and profitability, but such an opportunity will require a concerted effort across several business functions. To focus on profitable growth, insurance carriers must re-examine their Marketing, Sales and Fulfillment functions.
Across all industries, we’re seeing that Marketing is evolving alongside ever-changing customer expectations and preferences. Alexander Group’s recent research suggests that carriers must develop comprehensive online and mobile strategies, as that is where more and more customers (30% based on our research) start the quoting process. Beyond having a mere presence online, carriers must offer valuable online functionality for their customers, including self-service capabilities, even for more complex lines like property and life. Any online engagement must seamlessly and cost-effectively mesh with existing sales channels, so carriers must price-in online activities to their current commission schedules. Carriers must fully integrate their digital strategy into the rest of the organization.
When it comes to the Sales function, insurance carriers should optimize or right-size the traditional channels they rely on. Employ sellers, usually in call centers, and hired directly, allows their carriers to pivot faster in alignment with growth strategies. On the other hand, employ-seller fixed costs are high. Base salaries alone account for 70-90% percent of total compensation. External seller costs, on the other hand, vary directly with premium growth and these sellers take on the risk of managing a sales team. Based on our research, carriers prefer the independent agent model, but it comes with higher commission and uncertain loyalty. Carriers must increase support for their best sales agents with competitive incentives and strategic coaching, as well as bonus programs (on top of traditional commissions) that target strategic behaviors. While independent agent channels continue to grow, employ-based call centers are under pressure and need to be cost-competitive.
Carriers can steer toward profitable growth through fulfillment channels by embracing both advanced technology and third-party specialists to significantly optimize their bind and post-bind processes. Technology like artificial intelligence (AI) can augment decision-making and up-level customer engagement. Conversational AI tools can seamlessly offer cross-sell and upsell opportunities during routine policyholder interactions by sharing relevant resources when certain keywords are mentioned. Third-party specialists, meanwhile, can reduce administrative costs and minimize losses through proactive claims management. Insurance carriers can hone every phase of the fulfillment process to improve their engagement and efficiency while driving profitable growth.
Industry shifts happen much more frequently than they used to, and adaptability will be key for insurance carriers looking to remain competitive. By focusing on their Marketing, Sales and Fulfillment functions, carriers can meet evolving customer needs, support their salesforce, and optimize their bind processes—all in the name of profitable growth.
If you’re an insurance carrier looking to navigate the volatile market and achieve profitable growth, it’s time to re-examine your Marketing, Sales and Fulfillment functions. Alexander Group’s research suggests that developing comprehensive online and mobile strategies is crucial, as more and more customers are starting the quoting process online. Additionally, optimizing traditional sales channels and embracing advanced technology and third-party specialists in fulfillment can significantly improve engagement and efficiency.