This post is part of a series sponsored by AgentSync.
The reality of today’s insurance landscape: Speed is king.
One lead-response vendor study said 78 percent of sales go to the first vendor to respond to a lead. And speed has a positive correlation with insurance business sales, customer retention rate, and referrals.
For insurance carriers and agencies, interactions with policyholders depend on your speed to quote, bind, and pay claims for retention. Speed is also vital in the less-visible parts of your business, where producers and other distribution channel partners decide which carriers to represent and quote coverage for.
Yet, insurers and agencies know they can’t move so quick that they cut corners with compliance. So, how do you balance your need for speed with the knowledge that maintaining accuracy is paramount for producers and customers?
The clear and obvious answer is to be proactive in taking a digital, technology-first approach to your producer onboarding, compliance, and distribution channel management processes. But not all tech solutions are the same.
Hierarchy management: A hidden superpower
Most producer compliance and distribution channel management systems have some element of data synchronization with the industry source of truth, some contracting components, and integrations with other systems (although we will certainly still argue that our versions of these things are a cut above the rest). However, most solutions in the market aren’t handling hierarchies well. Why is hierarchy management, of all things, worth the tech investment?
Ultimately, it comes down to pairing speed with trust. Move fast and break things might work fine for Silicon Valley companies, but insurers and insurance agencies can’t afford to break things, whether it’s thanks to regulators or thanks to the sheer reputational risk with their partners and consumers. But the drumbeat of progress demands that insurers and their partners deliver at scale and at speed.
Without robust hierarchy management, moving at speed with your distribution partners poses many risks.
Why hierarchies matter—a nonhypothetical
Before you prematurely dismiss the following risks, know that these aren’t just a thought exercise. One AgentSync partner revealed more than 4,200 unique business entities in their hierarchy. After being able to match up the different partnerships and business relationships in their system, they saw about 20 entities were responsible for more than 60 percent of their business volume.
Without the visibility from mapping producers to their upstream and downstream business relationships, this business could be missing out on where to apply their efforts to best effect.
Risks of running at speed with poor hierarchy management
Siloed data
When different departments manage hierarchy information on spreadsheets or in the “notes” of a digital file, your data ends up siloed. That exacerbates the already-mentioned problems and causes the extra headache of making producers correct and re-correct every new contact at your business. More than that, you can’t accurately assess how your partners are performing. Who’s worth the time and expense you put into your partners, and who’s losing you cash for every year you pay for an appointment fee? If you don’t have visibility into your partners and their relationships, you’re missing the data on who’s critical to your success.
Wasting staff time and opportunity
When your organization doesn’t have your partners categorized appropriately and doesn’t reflect their relationships with you and with each other, then accuracy is a tedious manual process that requires your staff to spend time hunting down information. Regional variations in an organization’s pecking order add up to hours of data reconciliation, and that comes at an opportunity cost for the other higher-leverage work your staff could be doing. If you don’t want to spend time manually fact-checking information, you can always just accept that you’ll have a higher not-in-good-order rate for your license or appointment applications or business or commission processing. Because who doesn’t love a nice high NIGO rate?
Commission mismanagement
If you don’t know how much every producer in your downline is owed and how to split commissions across their upline agents, you may be facing several risks. Your lowest risk is that you’ll mistakenly pay out a commission and then have to claw it back. But you also risk violating state laws about commission mismanagement and triggering a regulatory audit. If you have W-9 employees who sell on your behalf, commission mismanagement could put you up against Department of Labor protections.
Reputational damage
Missed, delayed, or clawed-back commission payment? Slow onboarding process? Every touchpoint with your partners and, by extension, their clients is a moment you’re either impressing or distressing them. When your system doesn’t accurately represent where an agent fits into their business’s hierarchy, it’s like being repeatedly called by someone else’s name over and over.
Regulatory audit
Problematic payments and inaccurate documentation risks drawing the ire of a state regulator. Worse, manual hierarchy management for insurance carriers and agencies may mean turning a simple data inquiry into a full-blown audit and costing hundreds of thousands of hours in the data search.
Change management
Let’s try on a hypothetical: Your downstream agency partner has been owned and operated by the same agent for 50 years. The new owner steps in, and suddenly there’s chaos. You have multiple places to update—decades’ worth of records and hundreds of contracts need to change to reflect this new information. It’s an administrative nightmare for both you and the newcomer to your partnership.
What sets AgentSync Hierarchy Management apart
AgentSync Hierarchy Management stands out from the current market standards because it:
- Goes beyond simple parent/child relationships, and instead visualizes even the most complex hierarchies with the full context of who is licensed where for what contracts and products.
- Flows data seamlessly through the entire AgentSync Manage system, updating a full set of hierarchy-linked records when licensing statuses change or a business adds new contracts.
- Serves as the source of truth for hierarchy and relationship data, ensuring commission calculations in downstream systems are based on up-to-date, correct hierarchy info.
- Streamlines workflows, with approval requests routing automatically to the right stakeholders, dramatically cutting down on the time needed to onboard a producer or restructure a team.
Ultimately, much of what sets AgentSync Hierarchy Management apart is that it’s a solution purpose-built for insurance. Multi-level overrides, effective-dated changes, and required upline approvals? These aren’t some specialized custom work—these industry-specific needs come out of the box.
By using modern, intuitive hierarchy management to power your distribution channel management, you can move at speed and at scale without the business risks inherent to manual and traditional methods of relationship management.
To learn more about how AgentSync Hierarchy Management can speed your onboarding and scale your business efficiently, watch a demo or schedule a personalized consultation.
