Some states put producer licensing responsibilities squarely on the shoulders of the producers. Others make it clear it’s the carrier’s duty to ensure the licensure of anyone selling their products. A bunch of states vaguely imply it’s on everyone; others fail to designate anyone in particular as being especially responsible. Consequently, the industry default today is for everyone in the distribution chain to push any responsibility for verifying producer licensing upstream to carriers.
Yet, as technology makes it increasingly easy to verify and ensure producer licensing, it’s less likely that states will continue to give any insurance stakeholders a mulligan. But, even if MGAs, agencies, and any other downstream insurance channels aren’t nose-to-the-book about compliance, there are several other ways not keeping tabs on who sells your product can cost your business.
10 reasons you should track your individual producers
1. Know who matters
You’ve probably heard of the 80-20 rule, the idea that 80 percent of your business originates with 20 percent of your producers. So, do you know who those 20 percent are? Retaining who matters can be crucial to your success. If one of your distributing agencies relies primarily on a handful of insurance producers and those producers are recruited away, it isn’t just that agency that will suffer: Your business could be rocked, too.
2. Who else are your producers working with?
If you don’t know who is downstream, you might be missing many other opportunities. Things like other carriers you could be appointed with to capture more business from downstream agents, or understanding paths of least resistance for growth opportunities – this data is easily accessible for those tracking producer licenses with AgentSync.
3. Understand the competition
Converse to understanding natural allies, you can also get better insights into your competition when you know who else your producers work with.
- Know your avatar
4. Know your avatar
The idea of an “avatar” customer is heavy in marketing. Being able to answer “Who is successful at selling my product?” and “Do they have commonalities?” can help you attract other people with those attributes. Particularly in niche lines of insurance such as those MGAs/MGUs offer, it’s not crazy to think niche insurance is most successful with niche salespeople.
5. Replicate success
Insights into your downstream producers and getting to know how they do business can help you find ways to make that success a repeatable, predictable sequence for other producers instead of a singular phenomenon.
6. Provide better service
Service is the buzzword that drives the American economy. If you don’t know who is selling your product, then how can you possibly hope to serve them? If you don’t understand their challenges, how can you help them succeed? And make no mistake, your success is very directly tied to the success of the producers in your channel.
7. Your organizational value
MGAs and MGUs are still seeing hot activity in mergers and acquisitions. In this business, it’s easy to think your valuation is going to be based strictly on a factor of the business you write. But a lot of “soft” data goes into an actual M&A deal – having insight into your producers, their compliance, and the strength of your downstream business can go a long way toward a favorable valuation.
8. Trimming deadweight
Let’s circle back to the 80 percent of that 80-20 rule; the 80 percent who write less than 20 percent of your business. If you can figure out who is successful, it also means you can figure out who isn’t. Some agencies spend a lot of resources on agents who aren’t contributing in any meaningful way. If that spend is just on the agency level, then great – their monkeys, their circus. But, without insights into producer-level data, how can you know whether your resources are being poured into producers who contribute to your success?
9. Outright risks
Do you have producers that are consistently submitting clients who get rejected by underwriters? Anyone who has a history of selling outside of licensure? Knowing who poses a bigger risk than they do any kind of reward can reduce your headline risk with little effort.
10. Easy assessment of expansion
Seeing where people in your existing producer funnel are licensed can also show you where you could most easily expand into a new region. Or, if you have an adjacent line of business that your agents already hold, you can see a path of least resistance to pivot into new markets.
Through an integration with the National Insurance Producer Registry (NIPR), AgentSync Manage pulls in a lot of basic information about appointments and state licenses, all kept up-to-date on a daily basis. But beyond the value of keeping up with compliance data, our easy integrations with up- and downstream software can provide an even more complete data picture.
If you’re interested in getting insight into who you’re working with and owning your role in the insurance distribution chain, check out what AgentSync can do for your MGA or MGU.