Keeping Producers Happy.

Insurance companies need to focus on producer relationship management, so distributors have what they need to be profitable for the company.

While there has been a great deal of talk about customer relationship management, the more immediate profit opportunity for most insurers is to dramatically improve their producer relationship management via online support services. Insurance producers continue to be the primary source for the preponderance of business, despite share gains for direct and online customer sales. The insurers that most effectively use technology-enabled business processes to streamline costs and enhance the value that producers deliver to their customers will win the battle for the best producers and their profitable business production.

Distribution generally represents the largest portion of operating expenses for an insurer, as well as being a critical source of the value being provided for the end customer. Therefore, PRM productivity improvements can significantly lower an insurer's expense ratio and improve profitability. Additionally, enabling producers to more effectively market, sell and process business will provide significant growth opportunities along with the ability to deliver increased value for customers. Finally, when using PRM, it's easier to obtain an attractive return on investment, because it largely requires automating existing business process at a lower cost.

Implementing successful PRM solutions requires sequentially addressing several initiatives:

* use attractive, simple and useful producer interfaces to enhance the producer's user experience;

* incorporate well-designed producer desktop-management tools to allow producers to more easily perform their jobs. Personalization tools, such as Blue Martini, will allow producers to customize their desktops and allow insurers to better target producers with offerings;

* build self-service capabilities that link with a carrier's legacy systems to enable producers to rapidly obtain the information they need and update information;

* establish quality customer-service support for both producers and end customers via integrated contact centers to respond consistently and on a coordinated basis, regardless of the interaction vehicle;

* provide easily accessible databases so producers can determine the available products, services, underwriting criteria and processes, applications and status;

* deliver efficient end-to-end business processing to provide online quotation, underwriting and binding; and

* realign business processes and organizational factors (e.g., performance measures, compensation and training) with the new technologies being implemented to achieve the desired benefits.

One of the key issues with PRM implementation has generally been making use of standards, such as Acord XML, for data transmission and single-entry multiple carrier interface approaches to allow a producer to input a customer's information once and receive multiple quotes. Obviously, most carriers are not interested in promoting further price competition and would rather provide unique access approaches to align producers with their own organization. But standards will better enable agents to become more productive, and allow them to better serve their customers and provide a consistent basis for building producer interfaces.

While insurers with captive agency systems historically have been supporting them via dedicated networks, many also are taking advantage of online technologies to enhance those services. There are many leading insurers that currently are focusing on more effectively supporting their independent producer networks.

American International Group, for example, has established an online broker-destination portal--www/accessaig.com--strictly for serving brokers and agents through an "AIG virtual office" where brokers can transact with all AIG companies. Hartford Insurance Group, which uses multiple agent/broker Web sites for accessing their products and services, created an electronic business center for personal and standard commercial lines agents. It provides access to marketing and product information, while agents with large and specialty accounts can go to @venture.com (https://bswebp1.thebartford.com/).

While Travelers has separate password-protected agent sites for personal, commercial and life and annuity businesses, they also have partnered with Agency Management System's Towerstreet to provide real-time SEMCI capabilities for their agents.

A carrier's approach to pursuing PRM will vary based upon its own circumstances, but it is becoming even more critical to retain and support a quality producer base while increasing profitability.

Steven Landberg is the director of Answerthink Inc.'s insurance group in New York.