The Importance of Big Data in the Life Insurance Industry

The future of the independent insurance distribution channel

We've had many great discussions with executives from different MGAs—all of whom are looking at what the independent distribution channel may be evolving into.

In one of our discussions, with a senior executive at CAILBA, he commented on the future of MGAs, saying that, “If your value proposition is predicated on helping advisors process apps to get policies issued you’ll have a hard time competing going forward.”

As the channel evolves and more advisors process policies using eApps that don’t require MGA intervention, their need for MGAs will be redefined. Instead of processing, advisors are seeking more help from their MGAs in developing a clear business strategy and providing the tools and processes to achieve that strategy.

What many MGAs are finding is that the traditional wholesaler role and the approach they take to developing advisor relationships is transforming. While networking and sharing product knowledge are still necessary, advisors are choosing to work more selectively with fewer wholesalers—making themselves available to those who offer the most value to them and their clients and act as partners in the advisor’s practice.

To support both wholesalers and advisors in this new environment MGAs are increasingly providing technology solutions that enhance advisor support for their clients, improve their marketing effectiveness and make more sales to both existing and new clients.

This type of MGA support helps advisors build true value in their practice and deepens the relationship between distributor and the advisor.

Carriers: Accelerating and freeing the flow of data

The carriers we spoke with recognize they will continue to play a role in supporting product knowledge, and they also want to find ways to partner with distributors to help provide better technology solutions to advisors—including CRM systems, Financial Needs Analysis, and Illustrations. And, perhaps, most importantly, they are interested in continuing to improve the flow of data between all parties in the industry.

There’s an old (in tech terms) adage that says, “Information wants to be free.” It’s never been more true than in the case of the insurance ecosystem. Consider how data currently flows between entities: carriers send data feeds to MGA back offices, and from there it is sometimes passed to advisors.

A newer, better process that we discussed with several participants at the conference was to, instead, push data to an MGA engine. From that engine the data can be pushed to both the MGA back office and the advisor.

This new model gives the MGA more control of their data and enables them to leverage it to the advantage of their business, their advisors and the clients. Making more data available throughout the value chain, enhances the MGAs ability to perform analysis.

When it is shared with advisors, it makes compliance easier to achieve and maintain, makes marketing far more targeted (which increases conversion), and, when client needs are more fully understood, it makes the sales process go much more smoothly.

The coming transformation

The overall tenor of the conversations we've had are very positive. Everyone is confident about the future of the independent distribution channel, though we all recognize it’s going to continue to evolve.

At Equisoft we work with our partners to help all industry stakeholders fulfill our shared aim of helping clients reach their financial goals. We continue to innovate and develop new solutions that help carriers and MGAs add value for advisors. And we strive to streamline workflows and accelerate the movement of data so that everyone in the eco-system can continue to increase speed-to-market, easily maintain compliance and deliver world-class customer experiences.

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