The CAILBA 2019 National Conference & AGM featured presentations on a variety of topics affecting industry stakeholders, ranging from cyber security to regulatory change to an examination of innovation in the industry. In particular, we were struck by three things during my conversations with MGAs and carriers.
An integrated approach to adding-value for advisors
All MGAs seek to acquire and retain more advisors—and they recognize the best way to accomplish that is by addressing advisors’ most pressing needs, like: making more sales, finding more time, and building a more efficient practice. That means that MGAs can add value for advisors by providing the tools that will solve those challenges.
These solutions can be technology or software offerings, like Financial Needs Analysis tools, CRM, or agent portals—but they can also take other forms: such as training or admin support. And, when it comes to providing specific expertise that advisors sometimes need, MGAs can leverage their network to provide access to collateral professionals such as tax experts or even tech support.
The most effective solution for MGAs would be to integrate all of the above approaches into an advisor support system that adds more value to advisor practices than any of their competitors.
eApps change the value proposition for MGAs
As we spoke to the many carriers and MGAs who stopped by our booth, we were struck by how much talk there was about eApp’s for insurance policy submissions. Increased adoption of eApp’s is causing MGAs to ask themselves how they can adapt to the change in policy processing workflows, because when advisors submit a policy using an eApp on the carrier side, the MGA has no processing role in the transaction.
So, if the MGA is not processing new business for the advisor, the question becomes, how does the distributor remain relevant in the marketplace? One idea that is being discussed is the extent to which MGAs become a technology enabler or connectivity layer between the carrier and the advisor. This is a great opportunity at a time when leveraging technology is so critical to all industry stakeholders, and those organizations with a clear vision and expertise in the area can deliver great value to their partners and clients.
The impact of technology on tomorrow’s clients
The third theme was one that Equisoft’s Senior Vice President – Canada, François Levasseur actually spoke about during a panel discussion at this year’s conference. The title of the presentation was, “Understanding Technology and Tomorrow’s Clients,” and he explored:
- What the consumer wants from technology when it comes to dealing with the distribution of financial services products
- How technology can help educate consumers about financial services products.
- How “robo-advice” will evolve over the next few years and the role of MGAs in the direct-to-consumer distribution model
- The major obstacles slowing the adoption of technology
Many carriers and born-digital start-ups are offering online, direct-to-consumer experiences for their customers—which don’t require MGA involvement in policy transactions. For MGAs, this may not represent a big problem—since less than 50% of the market are covered by policies, and most of those are served by advisors who are associated with MGAs. So, the direct-to-consumer model is servicing a new market segment not currently addressed by MGAs.
As a result some MGAs feel direct-to-consumer distribution is not a part of their business and are not looking to enter that market. On the other hand, some MGAs are testing new initiative—feeling out the possibilities the new distribution model may hold. In the future, there may be opportunities for MGAs to be involved in hybrid distribution solutions where advisors play a role in the transaction being fulfilled through a digital offering.
Digital transformation opportunities
It seemed like almost all the discussions we had at CAILBA 2019 revolved around change. Digital transformation was an ever-present motif—both in terms of the challenges it may present and the opportunities it’s affords to those who are most forward-thinking.
At Equisoft, our vision is to help all industry stakeholders—from carriers to distributors to advisors—navigate the changing terrain. Along with our partners, we seek to harness and leverage new ideas and technology to help all players in the insurance eco-system meet their common goal: ensuring the financial security of their clients. We believe technology is a lever that will help us all create world-class experiences for our clients, reinvent our core and front-end systems to increase the speed and effectiveness of new product development and client service, and free up larger volumes of data to enhance all decision making.