TRANSFORMING THE AGENCY CHANNEL - Empowering hybrid digital insurance sales and driving better productivity post-COVID-19
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TRANSFORMING THE AGENCY CHANNEL Empowering hybrid digital insurance sales and driving better productivity post-COVID-19 Ajit Rochlani Shashwat Sharma Leonard Li Beverly Fernandes Malti Gupta
Transforming the agency channel
INTRODUCTION
Mainstream distribution channel partners for life insurance sales have traditionally relied
on high-touch physical client interactions for generating leads and closing sales. But due to
coronavirus (COVID-19) insurance distribution is also undergoing significant changes, driven by
virtual engagement encouraging further adoption of digital with distributors willing to adapt
to new ways of working. This is part one of a series of perspectives on how to drive distribution
effectiveness in times of COVID-19, and focuses on best practices for insurers to drive sales force
effectiveness in the agency channel.
Over the last decade, agency channel has lost share to bancassurance in most markets
across Asia. But it still remains significant, and has the opportunity to reinvent itself in a post-
COVID-19 world.
Exhibit 1. Agency channel significant across Asia despite losing share
Agency market share for Life (estimates)
% of NBP
80
68
62 63
60 60
56
48 48 49
42 42 42
37
34Transforming the agency channel
IMPACT OF COVID-19 ON LIFE INSURANCE BUSINESS
The underlying real economy has been significantly impacted, but some sectors like telecom,
health care, and e-commerce have had a boost. For the life insurance sector, new business
sales have been hit by the pandemic, but there are multiple opportunities to overcome and
drive growth. The latent demand for life and health insurance is picking up and based on past
regional experiences. Pandemics have generally provided tailwinds to certain life insurance and
health insurance products and many insurers across the region are rapidly course correcting to
capitalize on the opportunity.
THE TRUTH ABOUT AGENCY CHANNEL IN TIMES
OF COVID-19
Our primary customer and agent research suggest that advisors are unsure if customers want
to engage in the current climate and are reluctant to reach out. Some customers may not want to
meet physically and are overwhelmed and anxious about their financial futures, but they do want
to engage about their financial future, including insurance.
There is increased awareness and interest about life and health insurance from customers.
What’s also clear is that customers as well as agents are expecting more from their insurers
than before:
Voice of the customer — Customers want their insurance companies to help them with
access to virtual healthcare, and provide benefits and services that will help them take care of
themselves. A good example of this is Ping An’s online health service application “Good Doctor”,
which has seen a near 10-fold increase in registrations for health consultations since the start
of the outbreak.
Voice of the agents — Agents are looking for more support from their insurer in the form
of leads, product solutions, tools, and trainings.
Changing behavior has been a major challenge for most insurers, but with COVID-19 both
customers and agents are willing to adopt to new ways of working. Overall, there is a bigger
role that insurers can play in extending their support and turning the crisis into an opportunity.
© Oliver Wyman 3Transforming the agency channel
WHAT SHOULD INSURERS DO?
With customers and agents wanting more from their insurers, it’s a good time to redefine the
value propositions that they offer to their customers, agents, and employees. We have developed
a framework with three core elements for insurers to think about for driving better sales force
effectiveness in the agency channel.
Exhibit 2. Oliver Wyman framework for agency effectiveness in times of COVID-19
Critical to redefine value propositions and strategic choices, focus on right execution
levers accordingly
Re-define value propositions
For the customers For the agents For the employees
Be clear on strategic choice (Examples)
Target products Segmentation Trade offs
(E.g. Health, Protection, (E.g. selective focus on top (E.g. Tele-medicals vs. physical
ULIPs with non par combos, agents and sales managers medical exams, infrastructure
Protection, Retirement etc.) vs. entire channel, target trade offs — more cloud space
geographic segments etc.) vs. physical space etc.)
Double down on core execution levers
Restructure sales management Embed more digital Enhance processes
• Re-define SMP1 with focus on • Embed more tech/digital tools • Redesign support processes
input metrics and activity levels and enablers across journeys — u/w, ops, agent support etc.
(e.g. leads/meetings, etc.) (recruitment to fulfilment)
• Strengthen infra and tech
• New engagement and skilling • Embed more data & analytics support
program that is all virtual across, incl. lead gen./mgmt.
• Drive adoption and make it
(focusing on virtual sales skills)
• Digital dashboard that is easy to use (e.g. combine
• Re-structure KPIs, incentives single source of truth and multiple apps)
and R&R in line with the supports processes across
strategy entire hierarchy
1. Sales Management Practices
Source: Oliver Wyman analysis
© Oliver Wyman 4Transforming the agency channel
Redefine value propositions
As the expectations of consumer and agents from insurers are changing, insurers need to
redefine and communicate value propositions to set the new direction. For customers, this would
mean enhanced protection promise, value added services to help them take care of themselves,
trusted relationships, safer avenue for investments, education, and continuous value.
Agents, on the other hand, are looking for more support to be more effective as they face
income pressures and struggle to get used to virtual sales. As COVID-19 has led to an increase
in the number of employees working remotely, insurers need to ensure employees have access
to the technology and collaboration tools which will enable them to operate effectively. This is
particularly important in a world where customers and agents expect to conduct business online
in a seamless manner. Insurers also need to reduce the administrative time for employees using
digital tools and institute upskilling programs to continue working efficiently.
Be clear on strategic choices
While the exact the strategic choices may vary across insurers and markets depending on their
starting position, the pandemic has thrown many strategic choices that need to be made. For
example, certain products like protection, health, and combo products are more likely to be
favored, so insurers need to be clear about these upfront. They should also focus on designing
product propositions that are more targeted in the current environment, and will help agents be
more effective with sales conversion — for example, combos that have guaranteed protection for
part of the capital.
A lot of trade-offs may need to be made. For example, customers will not be keen to do physical
medical examinations, and as a result tele-medical and other under-writing limits will need to
be re-evaluated. This also means that agreements with reinsurers on such limits will have to
be reworked. Being prepared about such strategic choices and trade-offs will ensure better
readiness for the channel.
As COVID-19 has led to an increase in the number of employees
working remotely, insurers need to ensure employees have access
to the technology and collaboration tools which will enable them to
operate effectively. This is particularly important in a world where
customers and agents expect to conduct business online in
a seamless manner.
© Oliver Wyman 5Transforming the agency channel
Double down on core execution levers
Rethinking through core execution levers to enable a business model that focuses on protecting
business activity in the short term while setting up for long term success.
• Restructure sales management — As a response to COVID-19, some insurers have already
started reorienting sales pitches to emphasize on target products, customer education, digital
onboarding, refreshing training modules (virtual selling skills, digital tools) and engagement
activities for virtual environment.
In the short-term, insurers should tweak daily sales management practices across three
key areas:
– Focus on input metrics — such as number of leads, number of meetings to maintain
agent activity and pipeline during this time
– Embed a more frequent feedback loop — to get inputs on efficacy of digital tools, new
processes, training etc. and complement this with customer feedback
– Closely track distribution of high performing agents and sales managers — to segment
sales management efforts and resources accordingly
In the longer term, insurers need to develop a structured engagement program in the
virtual world that serves as a platform to drive strategic initiatives — agents want to be
connected to their insurer, their peers and get up-skilled. At the same time, insurers also
want a platform where they can bring all agents together, a virtual engagement program
that is well supported with digital infrastructure to drive up-skilling of agents with live as
well as pre-recorded learning sessions, promote peer engagement and right behavior is
a win-win for agents as well as insurers.
• Embed more digital for sales managers and agency staff — For traditional insurers, that
have largely been dependent on traditional processes and physical interactions with minimal
digital engagement, it is time to accelerate end-to-end digitalization of agency channel by
embedding digital tools and enablers throughout agent journey (such as recruitment,
pre-sales and sales, sales support and management, and post-sales).
With data, digital and tech advancements, there is nothing that cannot be done digitally from
a technology point of view. However, adopting the enablers strategically across the channel
and making it more efficient is key. Many insurers are on the journey of developing end-to-
end agency channel, but the timing for the futuristic agency channel has been cut short and
insurers have to deliver now.
The exhibit below shows key digital enablers across the journey:
© Oliver Wyman 6Transforming the agency channel
Exhibit 3. The timing for Futuristic end-to-end digital agency channel has been cut short
and has to be delivered now
Agents are more willing to adopt and tech/digital enablers make it easier than before
• Digital lead generation and • e-KYC
references • Digital prep for exam (e-modules,
• Virtual career pitches (More efficient) test preps etc.)
Recruitment
• Analytics driven assessment • Online examination
and scoring •…
Deep dive on next exhibit
• Leads (Social, propensity, • Documentation (e-KYC)
servicing, referrals etc.) • UW and Ops (FAQ, chatbot)
• Proposal (Fin. planning, • Verification (Offline recording)
Pre-sales Product pitches and triggers) •…
and Sales • Login (e-Authentication)
• Live sales support with chatbots • Analytics driven R&R (Rewards
• Joint calls with managers/trainers & Recognition) promoting right
Sales support virtually behavior
& management •…
• Renewals • Cross sell/up sell (Gap analysis)
• Self service • Referrals
• Agent tools empowered to service • Customer relationship /servicing
Post-sales
•…
• Activity tracking and management
• Virtual Skilling (e-modules on desktop and app, online tests and assessment) and Engagement
• Dashboarding (reviews using a common dashboard) that is supported with Digital & Data
Source: Oliver Wyman analysis
COVID-19 has enforced digital journeys for sales process and across Asia, with insurers
launching “Virtual Face-to-Face” agency sales platforms and enhanced processes. The new
sales process requires no physical meeting or wet signatures, and there is also significant
attention paid to customer engagement, privacy consent, and security using digital tools and
enablers. Virtual servicing capabilities create opportunities for deeper engagement, whereas
digital enablers equip agents with the necessary information at their fingertips. (for example,
agents have instant access to a chat-bot to clarify any questions and a library of audio and
visual content for quick tutorials and sharing with customers). The digital sales journey is lot
more efficient and can be seamless in very few steps, as shown below in Exhibit 4.
© Oliver Wyman 7Transforming the agency channel
Exhibit 4. Digital agency sales journey (Customer Journey Mapping)
Complete digitization of the agency sales journey is very much a reality, bringing with it
massive e
fficiency gains
Cust.
Journey Awareness Initial Need Financial Product Pre- Purchase Post-
outreach analysis planning pitch purchase purchase
review
Mobile
/digital 1 3 4 D 5 7 8
Virtual 2 6
Paper
based C
In-person A B E F G H
Digital agency Traditional agency
1 Customers typically research online or A
take references — can be digital as well as
physical. Digital agency helps gen. leads
through social media / digital channels
2 Advisor’s take virtual appointment B Advisors take appt. and meet In-person,
— easy to get experts / trainers / sales only limited joint calls are possible
managers to also join as required
3 Tool based, or simple send a link to the
customer — advantage is customer can C
also see the results and the process is
transparent
D Customer’s are usually asked to fill up a
form, or advisors ask few questions, the
4 analysis is typically using digital tools but
customer’s do not get to see results /
recommendations
5 Using interactive digital tools, videos, live E Explained in person, typically using
simulations etc. for better engagement simulation sheets and brochures
and more effective for conversion
6 Advisor emails quotes and details for F Follow up meetings for review,
confirmation, sets up VC if needed confirmation, documentation and physical
dispatch post issuance
7 Digital documentation, signature/ G
confirmation, KYC and policy shared
through e-mail/e-wallet post issuance
(no physical interaction)
8 H
Source: Oliver Wyman analysis
© Oliver Wyman 8Transforming the agency channel
• Optimize support processes: Insurers need to strengthen the infrastructure and technology
support within the firm to streamline processes and facilitate a faster turnaround time.
Simplifying mobile and web applications, utilizing chatbots and creating dedicated lines for
query resolution will result in increased customer satisfaction. Implementing integrated end-
to-end digital processes right from lead generation to query resolution to the final submission
process will have two-fold benefits — increased productivity within the firm and a more
frictionless experience for the customer.
As a key enabler to improve effectiveness, insurers also need to come up with a new
integrated dashboard that serves as single source of truth. This will enable access to all the
key sales metrics and adoption metrics of tools they need to effectively manage and guide
the sales activities.
As insurers empower more and more agents for digital selling, it has to be complemented
by efficient and simplified back-end process for an enhanced overall experience — such as
lower turnaround times, more Straight Through Processing (STP), one-time resolutions, and
live support.
THE WAY FORWARD
Digital agency is more efficient, cost effective and delivers a superior customer and agent
experience. It also enables real time connection, activity tracking and better sales support. Rapid
information capture will help identify traits of successful agents, support recruitment of high
potential agents, and can be used to replicate high performing agent characteristics by being
more targeted through targeted sales management processes, skilling and support systems.
Customers will continue to engage with advisors and insurers need to focus on setting up in
a way to maximize the effectiveness of the agency channel. In the short-term, measures to
consider include designing a new agent engagement program, re-designing sales management
practices to keep the channel engaged, and increase activity. This should go hand-in-hand with
re-designing the back-end processes for simplicity and implementing longer-term structural
levers for end-to-end digital agency.
In conclusion, digital advancement is at its peak and adoption is no longer an option. While
the current focus is on protecting business downside, the timing is right for insurers to drive
the digital agency model at scale to enable agents to be more effective and productive than
ever before.
© Oliver Wyman 9Oliver Wyman is a global leader in management consulting that combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. For more information, please contact the marketing department by phone at one of the following locations: Americas EMEA Asia Pacific +1 212 541 8100 +44 20 7333 8333 +65 6510 9700 AUTHORS Ajit Rochlani Engagement Manager, Financial Services Shashwat Sharma Partner, Financial Services Leonard Li Partner, Financial Services Beverly Fernandes Consultant Malti Gupta Consultant Angat Sandhu and Steven Chen also contributed to this report. Copyright © 2020 Oliver Wyman All rights reserved. This report may not be reproduced or redistributed, in whole or in part, without the written permission of Oliver Wyman and Oliver Wyman accepts no liability whatsoever for the actions of third parties in this respect. The information and opinions in this report were prepared by Oliver Wyman. This report is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accountants, tax, legal or financial advisors. Oliver Wyman has made every effort to use reliable, up-to-date and comprehensive information and analysis, but all information is provided without warranty of any kind, express or implied. Oliver Wyman disclaims any responsibility to update the information or conclusions in this report. Oliver Wyman accepts no liability for any loss arising from any action taken or refrained from as a result of information contained in this report or any reports or sources of information referred to herein, or for any consequential, special or similar damages even if advised of the possibility of such damages. The report is not an offer to buy or sell securities or a solicitation of an offer to buy or sell securities. This report may not be sold without the written consent of Oliver Wyman. Oliver Wyman – A Marsh & McLennan Company www.oliverwyman.com
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