This post is part of a series sponsored by Actentsync.
For high-growth insurance institutions and operators, acquisitions are a core part of business expansion. However, if you don’t keep your acquisition strategy simplified and efficient, you end up with an inverted revenue model.
The best way to control your costs and achieve target profit margins is to concentrate the core functionality you acquire. This doesn’t mean that all your producers have to wear the same logo – for some businesses, it always makes the most sense to maintain their own culture, flavor, or “local” feel for each downstream business unit. But even if brands and offices remain independent, you should go all out, so does compliance and distribution channel management services.
5 Risks of distributed compliance and distribution partner management strategies
If you don’t concentrate some of the core functions of your business and all of your subsidiaries (e.g., cough, compliance, and producer management), you can snatch the benefits of the acquisition. Of course, new acquisitions will bring profit potential, but if there is no efficiency improvement, the relationship will be shored on the established earning schedule and it will take years to really see the return on the initial investment.
If you do not centralize compliance and distribution partner management, you face five key risks:
Risk 1: Business disruption and change management risks
Each collection is a paperwork fire drill, some of which are inevitable. However, if the producer license, appointment and compliance functions are maintained at the local level of business, your downstream producer will feel “this is the new boss, the same as the old boss.” This experience will feel meaningless and bring you little damage to your sales agents with no return or gain, and the risk or transmission of information they will churn will bring you new errors. This risk of churn or the danger of slowing down the process also presents a very real danger to your bottom line: slowing down producers may be at the same time possible to write profits of the business.
Risk 2: Regulatory Risk
If you do not have the compliance and producer management functions of your business, you assume the risk of each business unit dealing with this problem in a different (usually usually decimal way), in which compliance and license verification are just part of someone’s responsibility. This can lead to sales licensing, inappropriate and unlicensed commission expenses, and wasted the expense of delaying the license. Furthermore, if compliance is distributed, partially responsible, you may face the risk that the person who manages the feature lacks the institutional knowledge that is essential to protecting the producer under its authority. Each of these scenarios has its own regulatory risk, which can easily appear as reputational risk.
Risk 3: Very little transparency
How many agents write business for your insurance company or agent? How much does each insurance manufacturer cost? What is the real ROI for every manufacturer and even every business unit? When the cost of a licensing or appointment is not transparent, when you cannot be associated with revenue, or you cannot judge how much commission paid for the business unit based on a single individual country manufacturer number, then you do not have enough transparency to assess your costs, risks, risks, and health of your business.
Risk 4: The perceived value of new acquisitions is reduced
Part of business risk is the perceived value you bring to the distributors and their individual producers you gain. When you provide centralized services to remove difficult or boring tasks from a partner’s plate, you can bring home the value that the relationship brings. It’s something that has to be done well, or there’s a chance you have a “too big” view of the new acquisition and can’t actually provide what you’re talking about.
Risk 5: Limited acquisition scale
If you can’t handle the core functions of change management, centralize acquisitions and increase efficiency, you’ll lock in growth and only acquire an agent or carrier of a certain size. Otherwise, the huge scale of the power of producers you acquire will overwhelm your infrastructure. For businesses that allow their agents to manage and compliance responsibilities as producers for one-time services, the producer-to-admin ratio tends to be high, meaning your workforce is more dedicated to those responsibilities than you might realize.
Why Actentsync is the preferred partner for senior insurance agencies and operators
ActentSync is built specifically for insurance, leading the range of well-known carriers and agents, using our contextual data and core software as part of its modern infrastructure.
For insurance carriers and institutions that grow primarily through active acquisition strategies, Admentsync proposes a specific value that customers take advantage of:
- Automated Workflow: Automated workflows take teams’ tedious, predictable, and highly manual tasks away, so your human team can use their large brains for high leverage work and more white gloves.
- API-driven, vendor-Unsoft Snostic Integration: By breaking down silos, our standardized data makes it easy for you to integrate data into your technology stack so that people who need to make data-based decisions can need information when and where they need it. Integrate with background check providers and simplify onboarding. Integrate with the commission system and ensure on-time payment and compliance payment. The possibilities are endless.
- Hierarchy Management: When your partnership changes, producers move, or leadership structures split, you can immediately reflect changes in all systems. Stop duplicate data entry by making sure your data is correct and each time in your real source software.
- Scorecard: Is your sales field full of agents that are actually ready to sell? Learn where you are ready and what you should focus on.
- Report: Not only about who gets permission and where. With the most powerful out-of-the-box reports, you can report gaps and opportunities in which regions have been appointed.
- Batch Action: Need to expand to Montana? You can make appointments or license applications on a bureau-by-post basis. Or you can submit records in batches. Montana, check. Who is who?
If you are unsure if a technology upgrade can change your producer to ADMIN ratio, read on and let us convince you. If you are ready to know what Aptentsync can do for you, schedule a custom demo.
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