An age-old industry with age-old problems

Niji Sabharwal, AgentSync

Inertia is a powerful force. For an industry that’s been around as long as insurance has, this law of physics may help explain why insurance agencies often stick with “the way it’s always been done,” even when those methods aren’t serving their best interests anymore. 

Think about the processes you and your agency staff go through each day. 

For example:

  • Identifying potential clients
  • Conducting outreach to leads
  • Gathering application materials
  • Quoting new policies for prospects
  • Reviewing existing policies and upcoming renewals 
  • Shopping current policies to different carriers
  • Communicating rate changes to clients
  • Managing insurance carrier billing

When you think about your day-to-day, how many of these tasks look exactly like they did five, 10, or 20 years ago? Chances are, at least some of your processes are more modern and automated than they once were. 

Your agency likely uses email, and maybe even SMS messages, to perform the majority of your client communications. You probably have a rating system to get quotes from different carriers without entering the same information multiple times. Maybe you replaced paper files with an agency management system to track each policy you quote and write. If you’re really sophisticated, you may even have a customer relationship management system (CRM) to automate and track contact with your clients across their policy lifecycles. 

Give yourself a pat on the back for the ways your agency has modernized and overcome the overwhelming urge to avoid change! After all, doing so is human nature as well as an unbendable law of the universe. 

It should be obvious how these new methods have made life and business better. No one would argue in 2022 that sending a client’s insurance application to multiple carriers by postal mail to receive quotes is a good practice, even if it was commonplace in the 1970s. If your agency did that today, you’d lose business 100 percent of the time to the agency next door that uses an electronic rating system to give clients instant quotes from multiple carriers.

Despite these steps toward digitization, we’ve found that many agencies haven’t yet departed from their historic practices when it comes to producer licensing and compliance management. And that’s a big problem! 

Producers are the key to agency growth

As an independent insurance agency, you don’t get anywhere without licensed insurance agents selling policies. You can have the best customer service representatives, the best carrier relationships, and access to the best rates, but if you don’t have producers licensed, appointed, and ready to sell, you won’t have revenue. 

If you’re one of the many agencies in high-growth mode, you’re likely trying to recruit and onboard producers efficiently and get them selling as fast as possible. If you’re still doing this manually – the producer onboarding equivalent of the postal service – then your agency is spending more time, effort, and money than necessary. 

You’re also creating more compliance risk than you have to be. Not least of all, you’re providing producers and staff such as your compliance and operations teams with less-than-stellar experiences. With the insurance industry’s talent crisis, no agency can afford to give its team a reason to start looking at moving somewhere that offers tools to make the job easier and more efficient. Not only can technology help keep your current team happier, but it can also be a selling point as your agency tries to recruit the next generation of insurance producers and other staff. 

Your agency has invested in other solutions and tools to digitize, automate, and streamline daily operations like quoting rates and sending invoices. Now it’s time to consider how updating the way you manage producer onboarding, carrier appointments, license renewals, continuing education tracking, and more can improve everything from employee experience to your financial bottom line.

How does a cloud-based compliance management system save time?

With the help of software integrations and automation, a cloud-based producer compliance management system can remove weeks from the process of onboarding producers and getting them ready to sell. 

Getting your insurance license for the first time can be a daunting task. You have to consider your state of residence and its requirements, along with the requirements coming at you from any other states you plan to sell or solicit insurance in. There’s a long list of ways a producer can lose their license, and license renewal is a whole other (complicated) thing.

If it sounds overwhelming for one producer, how about insurance agencies that manage dozens, or even hundreds, of licensed agents? 

In many cases, dedicated teams spend their time:

  • Trying to collect necessary information from producers
  • Logging into multiple systems to verify information
  • Cross referencing information from one source to another
  • Trying (again) to get information from producers

We’ve encountered independent agencies whose staff have to log into five or even eight different systems to complete the job of getting a new producer ready to sell. This process can easily take a month, often longer. 

On the other end of the spectrum are the agencies using a fullstack compliance management solution. These agencies can have new producers selling as quickly as the same day they’re contracted. And they can do it without sacrificing absolute compliance with all state and federal regulations that impact each producer, both in resident and nonresident states. 

How is this possible? The best insurance compliance software solutions offer real-time integrations with a single source of truth, like the National Insurance Producer Registry (NIPR), for example. A cloud-based compliance management solution also should give producers a quick and easy way to enter all necessary information as they onboard, eliminating the paper chase for their documentation. 

These efficiencies, among many other time-saving features, are how switching to a modern compliance solution can give staff time back in their day to focus on things they’d rather be doing – not repetitive data entry or triple-checking to avoid errors.

How does a cloud-based compliance management system save money?

From a staffing perspective, a tech solution helps your agency run more efficiently, doing more with the same number of people. This ties directly back to time savings, but again, if your people aren’t tied up with repetitive busy work, they’re free to focus on revenue-generating activities. That combination can actually save money and increase earnings all in one fell swoop. 

But that’s not the only potential cost savings an insurance agency can realize by implementing a compliance management solution. Other ways of saving money include: 

  • Eliminating duplicate work that currently happens when you’ve got data and workflow silos in your organization
  • Avoiding lost revenue and churn when there’s a long lag between hiring a producer and them being ready to sell
  • Reducing recruiting costs when your agency enjoys lower employee turnover thanks to a digital experience
  • Avoiding E&O claims from human error by eliminating repetitive tasks that are better left to software integration 
  • Virtually eliminating the risk of regulatory penalties, fees, and fines associated with producer non-compliance

How does a cloud-based compliance management system create the producer experience and employee experience you need?

The ripple effect of the time savings and cost savings we’ve mentioned above combine to produce an exceptional experience for everyone involved in your producer licensing and compliance process. 

From individual producers, who can now get onboarded and ready to sell within days, to your compliance staff, who have exactly one place to go for any information they need (goodbye multiple logins and cross-referencing) – the experience is impressive. 

When you eliminate friction and frustration and let technology do the heavy lifting, your people are just happier. Of course, technology isn’t the only ingredient you need to drive highly satisfied employees who want to stick with the industry long term. But it’s a great start. 

If you’re an independent insurance agency owner, an agency licensing and compliance manager, or even an individual producer, maybe these points have left you thinking it’s time to overcome the licensing compliance inertia at your organization. If so, we hope you’ll go deeper down the rabbit hole and check out our AgentSync blog, where you’ll find information on changing regulations, digital innovation, and more resources on the benefits of adopting a modern producer licensing solution.

Thanks for reading this guest post by Niji Sabharwal from AgentSync! Any above reference to a specific company, method, or product is meant for educational purposes only and is not specifically endorsed by Pie.