This post is part of a series sponsored by Actentsync.
Not long ago, the insurance industry had matured the opportunity area for digital transformation. Today, from electronic signature tools to AI customer service chatbots to full-size distribution channel management solutions, insufficient technology tools can help insurers improve efficiency, improve their processes and reduce risks.
However, the area of insurance allocation that has been struggling in the past is hierarchical management. Without solutions to organizational structure and commission expenses, carriers and agencies will spend unnecessary time and money chasing the most accurate data. With modern hierarchical management solutions, insurance companies can even manage the most complex producer hierarchies confidently and simply, ensuring scale, accuracy, accuracy and efficiency as they expand.
The current solution for hierarchical management still has many shortcomings
When we think of past hierarchical management solutions, we think of traditional technologies such as mainframes, electronic programs, spreadsheets and digital change logs. At present, no progress has been made to go beyond these methods, and many vehicles and institutions still use isolated, highly manual methods to represent their organizational structure.
Among modern digital solutions that do exist right now, finding a way to illustrate the specific needs of the insurance industry can be a challenge. No solution that claims to be modernized hierarchy management of insurance organizations will have a real impact without addressing insurance specific use cases such as effective date tracking, change request and approval logging, and multi-level committee management.
Three ways of traditional hierarchical structure management are flat
1. Poor data visibility
The network of relationships that form distribution channels and ultimately connect underwriters to policyholders can be multi-layered and complex. Some businesses have hierarchies that span over 30 levels, with thousands of producers, hundreds of products and dozens of commission structures. From a visibility perspective, using spreadsheets and changing logs on mainframes is not a very effective way to manage these complexities. However, this is an effective way to create data silos in the process, which affects your ability to make informed decisions about your distribution channels. How do you accurately assess your partner’s performance without fully understanding your organizational structure and commission spending? How do you know which distribution partners are crucial to your success and which distribution partners spend your annual appointment more than they are worth?
2. Inefficient and unmanaged at scale
Imagine: You are an insurance company with multiple downstream agent partners. The structure of one of your long-term partners has changed and now your responsibility is updating the value of records and hundreds of contracts to accurately reflect the changes in the system. Because you are using a manual approach for hierarchy management, you need your management time to track any inconsistencies and make the necessary changes. They may spend on other high-value jobs. Inefficiencies like this increase costs and stall innovations, making it nearly impossible to operate effectively on a large scale.
3. Risk of compliance increases
The manual nature of traditional hierarchical management puts insurance companies and institutions at risk of error in their records. In the documentation of your organization’s structure, there is only one inaccuracy that can lead to incorrect, missed, delayed, or withheld. Poor commission management will not only affect the trust your distribution partners have in you, which may cause some producers to feel the need to spend their time calculating their spending to ensure they are properly compensated – but it can also trigger regulatory audits. And, since we checked last time, manual hierarchy management is not very effective in generating automatic reports of timestamps when clicking a button, and this audit will take you hundreds of hours of data tracking and verification.
The future of hierarchical management is automation, integration and intuitive
As insurance technology innovations exceed past inefficiencies, highly manual legacy tools, finding modern hierarchical management solutions should not be an afterthought. The right solution will blend modern automation capabilities with easy-to-use workflows, cloud-on-native infrastructure, and API-driven data to transform hierarchical management from bottlenecks to growth drivers.
Any solution to insurance hierarchy management should overcome the challenges of traditional approaches and be granted to carriers and agencies:
Full visibility into its hierarchy and commission structure: Not only is it going online and offline immediately. We are talking about who in your distribution network has licensed for which states and products. And, with the growing insurance industry experience with the rate of change, effective dating and historical data retrieval capabilities are to enable your team to access accurate snapshots of your organization and to access accurate snapshots of your organization both currently and historically.
Agile workflows improve efficiency: A small change in the organizational structure or license status of any of your distribution partners can affect thousands of records. Seeing these changes automatically reflect how much of a transformation it would be in your system, rather than manually recording them? Modern hierarchical management should leverage API-enabled automation to eliminate the management nightmare of manual change management. That way, whether your hierarchy includes a handful of distribution partners and payment structures or includes thousands of downlines and dozens of commission levels.
Reliable time and cost savings: Then how do you go back… about time becoming money? Most importantly, modern hierarchical management solutions can save your insurance business at the same time. Here are just some examples:
- Comprehensive historical tracking with effective dating enables accurate reporting of current and historical data of national audits to be fast, painless and efficient.
- Intuitive approval workflows make hierarchical modifications, saving you and your distribution partners time, otherwise you will spend sifting the right information through email threads and paperwork to get the right information and awaiting approved changes.
- More visibility into commission levels and expenditures means fewer commissions and regulatory fines for committees.
Reputation as a modern, compliant organization: No business wants to work with past efforts, distrust or get stuck. By powering your distribution channel management with modern, intuitive, hierarchical management, you can secure your place in the 21st century and delight your distribution partners with a more modern, seamless experience. If manual hierarchical management can be a patience course, modern solutions can provide an intuitive approval workflow that directs requests directly to necessary stakeholders, speeding up the process and eliminating frustration. And forget about outdated mainframes and spreadsheets. Any solution today will be built on cloud-native infrastructure and leverages API-driven integration to deliver modern, technologically advanced user experiences.
Manage your organization’s digital transformation with an Apsentsync hierarchy
Actentsync hierarchy management brings the core functionality of modern hierarchy management solutions to life. Aptentsync hierarchy management is built on a modern, cloud-based platform that utilizes API integration to flow partner data seamlessly through your existing technology infrastructure, eliminating the need to maintain parallel large-scale unit systems. With the help of proxy hierarchy management, even the most complex organizational structures can:
- Handle insurance-specific hierarchies such as multi-layer coverage, effective appointments and the need for easy approval
- Ensure the correct commission payment by aligning expenses with an always accurate real-time hierarchy
- Onboard producers make faster by automatically routing approval requests to the appropriate stakeholders and reducing the time to complete slow, manual workflows
- Maintain unified producer data in its distribution channel management workflow, from licensing to integration contracts with API support
To learn about how agency hierarchy management can turn this critical aspect of distribution channel management workflows from inefficient, time-consuming to agile, seamless and modern, contact one of today’s experts.
