Sure, online quotes and sales in insurance have increased, but insurers can’t ignore the other important distribution channels. Insurance eBusiness and channel strategy executives must work across the enterprise to develop a clear multi-channel distribution strategy with senior management support, according to a new report from Forrester Research. Executives must align culture, organizational design, technology, metrics and processes, and incentives, and they must communicate the value of the new strategy to all stakeholders for successful execution.

Insurance distribution is evolving and becoming more complex as more customers go online and switch channels to research and buy insurance, the report says. However, what happens once they go online? Ipswich, Mass.-based Customer Respect Group found that only 61% of Web sites provide an option for an agent callback and just 37% of sites make it easy to find how to ask for a call back.
This, obviously, can pose a problem for agent-based insurers. eBusiness and channel strategy executives struggle to manage distribution through multiple channels, resulting in channel conflict and poor multi-channel customer experiences.

The Forrester report, “How to Develop an Effective Multichannel Insurance Distribution Strategy,” says agent-based insurers have been slow to develop a comprehensive multi-channel distribution strategy because of channel conflict, major cultural change and steep business transformation costs. But insurance companies cannot ignore the problem indefinitely. Multi-channel experiences remain poor for many insurers. So what happens if insurers don’t develop a multi-channel distribution strategy that evolves with consumer and economic changes? Forrester predicts that insurers without a multi-channel strategy will lose customers, lose agents and struggle with profitability.

Because of this, Forrester says insurers need to align organizational structure, technology, processes, metrics and incentives to implement a successful multi-channel strategy.

Forrester asked multi-channel personal lines insurers how they managed remuneration across the Web, call center and agent channel. The research firm found that insurers can create channel harmony between direct channels and agents by providing agents with new business and renewal commission on Internet and call center sales. The commission value varies by amount, and by what channel generated the sale.

Forrester suggests insurers give agents:

• Full new business commission on Web sales from agent sites
• Zero new business commission for Web sales from corporate Web sites
• Full renewal commission on Web sales from corporate Web sites
• Full cross-sell and up-sell commission on corporate Web sales
• Reduced new business and full renewal commission on call center sales
• Additional monetary incentives and recognition

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