Large insurance carriers often function as a conglomerate, a family of companies spun out to protect risk and drive innovation, but this business model causes friction for distribution partners when each business unit has different onboarding processes and producer management philosophies.
Emerging product lines often pose significant risks because carriers can’t be sure of their untried actuarial models. Mergers and acquisitions also mean bringing many businesses under a single parent umbrella. And state-by-state regulations make it apropos to maintain regional presences with some degree of siloing. Yet, for producers, agencies, MGAs/MGUs, and other partners that help distribute products, having 20+ different points of onboarding and relationship maintenance to access what is essentially the same carrier’s products can be a source of extreme frustration.
Producer compliance management has long been a contributing factor to this frustration. Agencies must onboard their producers across several different systems and re-enter their data over and over, even to sell the same family of products. Not only does this cause considerable lag and make for loads of opportunities for manual errors, but things change over time! Producers who move office locations or residences may have a different address on file with multiple business units; more than one angry phone call has started with “I already told you!”
Business unit inefficiencies and risk
Having so many different business units (BUs) can be a great way to silo costs and taxes and limit risk. And each BU serves as a Petri dish, allowing large, legacy carriers to experiment with new solutions and processes in a way that allows for failure and innovation without the risks of having to implement a single controlled solution across a massive organization. Sometimes, a conglomeration of BUs is also merely the unintended downstream consequence of M&As, which can give carriers new, innovative products and technology.
But when that experimentation and innovation is actually just 12 or 42 small businesses wasting money and effort on things like half-baked DIY software or a transformative process that only works for one or two people, it’s like several dozen businesses just pouring money into a pond. It’s the kind of inefficiency that a single consolidated business would recognize immediately as a threat to the bottom line, but, divided amongst subsidiary business units, goes unaddressed for decades.
Another threat to all business units: Some will cultivate passionate relationships and dedicated followings among their distribution partners, only to have them fall apart because of poor onboarding or mishandled administrative errors at sister BUs.
Aligning your business units for producer management
Producer management – appointments, license validation, contract signatures, onboarding, renewals, and offboarding or termination – has historically been a challenge across the industry, and that is multiplied by an X factor for insurance carriers managing X number of associated business units.
The hard part of onboarding isn’t the handshake or the deal-clenching phone call, after all. The hard part is trying to get your warmed-up prospective partner to follow through on what can seem like an endless slog of paperwork and data re-entry – a process that can take months. Perhaps your business units require different data points because of their various associated lines of authority or regulatory jurisdictions – think, a term life insurance product in Minnesota versus a Medicare Advantage plan in New York. Yet, much of the data for a producer or agency will be the same – address, name, National Producer Number, etc.
By working with a producer compliance licensing management system that uses the National Insurance Producer Registry as a source of truth, you can eliminate double (or triple, or beyond)-work across your business units and end the uncertainty and manual error of self-reported data.
1. End re-entry for your partners
Truly the importance of frictionless onboarding can’t be overstated. Even if they’re onboarding for multiple business units over time, producers and downstream agency partners still assume connected carrier units have their information.
With a producer management solution that allows for strong data-permissions controls, you can moderate the appropriate data flow between business units while also ensuring seamless onboarding across your systems and BUs. Consider a solution that pre-populates fields with NIPR data as soon as a producer enters their national producer number, that can ensure data is current and accurate, no retyping necessary.
2. Get actual data validation
Sometimes producers make mistakes when they’re typing (and retyping, and retyping) data across multiple systems. And sometimes, producers selectively mischaracterize or neglect reporting unfavorable information.
Regardless of whether these shenanigans are intentional, this presents a risk to every single business unit that person contracts with. At the very least, having a producer sell out of license can jeopardize their license and any associated pieces of business. At worst, it can net you fines and put every one of your associated businesses under a regulatory microscope.
By working with a producer license verification solution that uses the National Insurance Producer Registry and instantly synchronizes data, you can validate producer information at the point of entry, not weeks down the road. Using NIPR ensures that your records match relevant state records, so there’s no mystery about who a person is, and how, where, and what they are licensed and appointed to do. And working with a solution that applies this data in real-time means you don’t have guesswork.
3. End multiple record inefficiencies
Maintaining effort-intensive records across systems isn’t just inefficient for your team. And it doesn’t just lead to out-of-date (and potentially non-compliant) “zombie” information. It also doesn’t just increase your chances of repeating misinformation accidentally.
Surely, it does all of those things. But it also makes it hard for producers to communicate pertinent changes to their records. When they move, or change names, or need to amend their personal information in any way, if you have multiple record-keeping systems across multiple business units, then that data change becomes a whack-a-mole of where and when they updated records.
As an example, it’s commonplace for carriers to do quarterly reconciliations for compliance. This could mean upward of 50 hours (sometimes per business unit!) every three months, and manual checks mean that data could be out of date as soon as that reconciliation is complete. A license in good order at the beginning of the quarter could lapse, meaning a carrier might issue policies under an expired agent license for as many as three months!
By giving your BU’s a consolidated producer licensing management system, you can also give producers and agencies portals where they can change the necessary information at a single source. With modern integrations and validation with NIPR, this information can be automatically validated and repeated across systems without so much as a confusing phone call.
4. Block construction makes changes less arduous
Let’s face it, a lot of licensing and appointment validation today is very manual. But even BUs that DIY their own systems or work with a standalone or siloed legacy producer licensing management tool may face the reality that small, custom changes take a long time and substantial cost to implement.
Modern insurance infrastructure, however, is built on low-code and no-code solutions that make some of these changes a relatively small lift. Instead of spending hours communicating a need to engineers who will then spend months doing close technical work, low-code and no-code solutions allow insurance licensing solutions teams to quickly change and rearrange both back- and front-end platforms for the unique needs of their customers.
5. Bulk uploads make it so, so easy to manage mergers and acquisitions
Likely, a carrier that manages several BUs is also open to consolidating some of them or acquiring new businesses as they go. This has always been the way of insurance, particularly as lines of authority consolidate or split apart thanks to emerging regulation.
Yet, manual producer management solutions mean that, during mergers or acquisitions, internal teams at each BU will spend hours transferring data for every single producer, even for ones that are already contracted with the organization.
AgentSync, though, uses bulk capabilities to transfer hundreds or thousands of insurance producers and brokers at once, only flagging producers whose information is mismatched to NIPR. Imagine the hours your staff could save across the entire organization. Game, set, match.
6. Integrations allow BUs to continue experimenting with use cases
The best part of carrier business units is when they can be microcosms of innovation, not waste. By using producer management solutions that make use of application programming interfaces (APIs) and easy data integrations, you can set your BUs to innovate in the areas you care about.
Insurance carriers and their business units are at the forefront of determining emerging product lines, actuarial tables, and real-world use cases for insurance. So, freeing all stakeholders up to focus on those kinds of innovations while gaining efficiency through using modern insurance infrastructure is the best of both worlds.
If you’re ready to reduce regulatory risk to your business units while building relationships and continuing to innovate, see how AgentSync can help.