3 Ways Automations Drive Operational Efficiency in Appointment Renewals

The Hidden Cost of Manual License Verifications & How Process Automation Drives Cost Reduction

Executive summary:

Keeping insurance producers’ licenses and appointments compliant is a critical responsibility shared by nearly everyone in the insurance distribution channel. However, plenty of insurance carriers get bogged down each year, dragging operational efficiency down in the appointment renewal process. Add distribution partners who sell variable lines of insurance (like variable annuities and variable life insurance) to the mix, and the operational bottlenecks are multiplied. 

If a carrier’s renewal process is full of outdated manual workflows, they may find themselves unable to process hundreds of thousands of renewals, delaying their revenue and stirring up frustration for both producers and customers. 

The producer license renewal process: Understanding your operational bottlenecks

License and appointment renewals occur either annually, biennially, or on some other basis, depending on the state or states a producer operates in. 

The appointment renewal process itself is a tale as old as time. It all starts with the states compiling a list of the producers and organizations each carrier currently appoints with. Next, it’s the carrier’s job to review their appointments and decide which producers they want to continue doing business with and which ones they want to terminate. To avoid paying to appoint producers they no longer wish to do business with, carriers must submit their appointment terminations by their home state’s renewal deadline. 

After the appointment termination deadline passes, carriers typically have a few days before their state’s appointment renewal invoice payments open. Once a state opens the invoice period, making changes isn’t exactly easy, so it’s important that carriers terminate any inactive producers in advance to cut unnecessary costs.

Why license verification is a critical step to operational efficiency

When it comes to deciding which downstream partners to reappoint or terminate, there’s a lot to consider. While the general idea is simple enough – terminate any producer whose license is no longer valid – there are a number of other factors at play. 

For starters, carriers need to know which of their producers and broker-dealers are licensed to sell insurance and securities, and in which states. There are more than a few reasons an insurance or securities license may be invalid, so carriers need to know that their distribution partners haven’t done anything that could cause them to fall out of compliance or lose their license in the time since they last checked. 

Beyond license validation, renewal is a great time for carriers to “trim the fat” so to speak, and terminate any producers who cost more than they’re worth to partner with. Paying to appoint hundreds of producers when only a dozen or so actually write business for you, or paying to appoint a single producer in every state when they only write business in a select few states is just a waste of money. 

The challenges of manual license and appointment renewals

Challenge No. 1: Data collection and operational staffing

As we alluded to, license verification requires collecting and comparing A LOT of data. To accomplish the task, insurance carriers often have multiple full-time employees dedicated to checking and cross-checking state DOI websites, producer databases, FINRA records, background check results, CE credentials, and so much more. 

For carriers with only a handful of producers or broker-dealers, this manual way of doing things may be doable, but it’s still not ideal. And you can forget about trying to manage verifications by hand at scale. That’s pretty much a guaranteed operational bottleneck, time-suck, waste of money, and overall headache inducer.

The ultimate impact of this challenge on Directors of Operations: Multiple full time employees tied up in routine compliance work instead of strategic initiatives.

Challenge No. 2: Data validation and real-time data issues

Once a carrier has collected the necessary data, how can they be sure it’s accurate and up-to-date? Manual data tracking and collection means often organizations find themselves trying to verify one internal data source against another, with no guarantee that either record even has the right information.

Plus, when you have multiple people manually inputting producer data into one or more different systems, there’s a high chance for human error. Without a single source of truth and real data consolidation, it’s pretty much inevitable that your data’s accuracy will be less than perfect.

Challenge No. 3: Data analysis and operational decision-making

When a producer’s license and appointment data is in one spreadsheet or system, their policy data is in another, and their commissions data in yet another disparate location, manually pulling all that data into a single, unified view is…difficult to say the least. It’s nearly impossible to determine the ROI tracking for each individual producer and what the producer delivers in return on a state-by-state basis when the data is locked in manual, siloed systems. 

Generating a list of who to terminate in which states before what regulatory deadlines takes hours and hours of manual work. This leaves carriers no choice but to appoint every producer who raises their hand in every state. As a result, insurers end up paying a bunch of fees for people who might not ever write business for them. 

The financial impact: What manual license verification and appointment renewal processes cost carriers

Manual producer and broker-dealer license verification and appointment renewal processes cost organizations more than they may realize. To start, there’s the obvious and direct cost reduction opportunity of retaining multiple full-time employees for data collection and verification. With an automated solution, these employees can be redirected to more revenue-generating work.

But that’s just the beginning. Consider the following direct and indirect costs of doing things by hand:

• Revenue loss on NIGO applications – Applications stuck in incomplete stages
• The cost of appointing producers who aren’t actually selling – Unnecessary appointment fees
• Lost revenue opportunities due to renewal backlogs – Distribution partners unable to sell
• Missed partnership opportunities – Inability to identify high-performing producers quickly

Breaking down operational costs

At first glance, it’s easy to overlook just how much inefficiencies in your renewal cycle are actually costing you. But, when you break it out, it’s clear that relying on manual workflows for critical aspects of your distribution channel management adds unnecessary costs to your bottom line and negatively impacts your ability to grow. 

The solution: Process automation for operational excellence 

Overcoming appointment renewal inefficiencies with automated solutions

Adopting a modern solution that automates the flow of producer license and compliance management data across all of your systems, reduces the manual effort on your team and eliminates inefficiencies in the renewal and appointment processes. Best of all, doing so will eliminate many of the costs associated with managing these workflows by hand. Consider the benefits of using automation to:

Benefit No. 1: Staffing optimization, aka freeing your team from manual work

Nobody wants to spend their time buried in heaps of paperwork or scrambling through state web pages, internal spreadsheets, and external databases just to validate a license or renew an appointment. Not only is it frustrating and time-consuming, but it’s also a pretty poor use of talent. 

An automated distribution channel management solution can provide carriers with real-time data directly from the industry’s source of truth at the click of a button, eliminating data silos and ensuring you have access to accurate information whenever you need it. This enables staffing optimization by redirecting your team to higher-value activities.

For many Director of Operations roles, the impact can mean reclaiming dozens of full-time employee hours per week for strategic work.

Benefit No. 2: Workflow optimization, aka reducing operational backlogs

Bottlenecks in your renewal processes cause operational backlogs that prevent your distribution partners from, well, distributing. This causes frustration for producers who want to sell a carrier’s products but are unable to do so without a valid appointment. If a producer is unable to sell your products, consumers will look elsewhere for their policy needs, causing you to lose out on key business. 

Speeding up the renewal process with an automated solution allows you to move producers through the process quickly and with little to no roadblocks. When it comes to choosing who to partner with, producers will prioritize carriers that enable them to sell faster, not ones that block them from doing their job. 

The impact on a Director of Operations: Eliminate renewal backlogs and accelerate time-to-revenue for new producer relationships.

Benefit No. 3: Direct cost reduction through better data insights

With an automated solution that weaves accurate, up-to-date producer data throughout your systems, generating a report of who writes business and in which states is as simple as pressing a few buttons. This saves carriers with large distribution forces thousands of dollars in appointment fees and allows you to focus your time, money, and resources on your highest performers.

Just think how much easier renewal time is for carriers with that level of ROI tracking and visibility into the return on investment of their downstream distributors. Process automation enables true scalability without proportional cost increases.

A Director of Operations gets immediate and quantifiable cost savings on appointment fees, as well as improved visibility into their producer profitability.

Streamline appointment renewals to keep your business moving forward

Make strategic decisions through operational visibility

Accurately tracking active producer appointments throughout the year allows carriers to make better business decisions come renewal time and scale their business effectively. If you want to make the appointment renewal cycle easier on yourself and your downstream distribution partners, AgentSync can help. 

What automation enables for your operations

With AgentSync’s automated workflows, carriers can:

• Integrate their commissions management system data and run a report in a matter of minutes that will tell them which producers haven’t produced in any given state
• Bulk schedule terminations for those producers to avoid paying appointment renewal fees
• Identify top performers and negotiate contracts accordingly to retain the appointments that pay off
• Have confidence that the state appointment renewal list reflects your actual business instead of being an exercise of producer discovery

Our modern distribution channel management solutions give carriers access to accurate producer data when and where they need it, speeding up the license verification process and simplifying appointment renewals to reduce operational backlogs.

If you’re ready to unlock greater operational efficiency in your daily operations, achieve meaningful cost reduction, and become a better partner to your downstream distribution partners, learn how our solutions help carriers power their growth or contact an AgentSync expert today.