HANDLING SUCCESS

How Market Access Providers can respond to growth and other unique challenges

By John McKay

Insurtech continues to disrupt the insurance business by driving industry capabilities—and shopper expectations—higher and higher. These changes are exciting, but the disruptions are being felt far and wide. Many agents are turning to wholesalers, affiliates and network alliances, and franchises to provide roadmaps for navigating the dynamics.

While these organizations represent varied and nuanced business models, the one thing they most prominently have in common is that they provide access to additional carrier markets—ones that would otherwise be unavailable to the member agent. For the fastest growing of these Market Access Providers (MAPs), success is presenting its own set of challenges.

The growing value of MAPs

For new agencies, MAPs provide immediate access and introductions to markets. These organizations also represent repeatable best practices, winning strategies, and the ability to scale quickly. Member agencies gain the stability and the security of being a part of a large, established brand.

Established agencies tend to be attracted to MAPs for greater commissions and contingency. Not only do these organizations hold the promise of more profits, but they also establish a roadmap for the perpetuation of the agency.

New and established alike, agencies benefit from access to particular lines of business or specialty markets, as well as access to expertise in these areas.

MAPs are enjoying phenomenal, sustained growth. With this success, their focus is understandably shifting toward scalability and the business decisions they must face in this evolving market.

Member agencies also count on leveraging the technology investments of the larger organization, they enjoy the benefits of sales and marketing support, and they make use of shared back office operations.

Keys to success

Because these organizations are growing in size, profitability, and popularity, they are increasingly in competition with one another for members. Those that succeed will be the ones who can most quickly scale to meet the changing needs of these members. Success also will hinge on the speed and quality of underwriting, along with the timely and robust flow of actionable data with members.

One challenge facing MAPs today is the flow of policy downloads and commission statements to members. How can an agent take ownership of his book of business if he doesn’t have true, timely access to that book?

To grow their books of business effectively, agencies must navigate the (sometimes competing) dynamics of insureds’ risk profiles and carrier appetites. MAPs are ideally positioned to bridge between member agents and carriers, providing worldly guidance for sustainable and scalable growth. But these conversations will only be as meaningful as the information available for study between them.

The insurance industry is currently running a race toward customer centricity. Now, more than ever, independent agencies are reaching out for help along the course.

Additional challenges

The larger MAPs grow, the more difficult they become to manage. Every aspect of their business and its relationships—both with members and carriers—must be able to scale. And make no mistake, this thinking is constantly on the minds of the CEOs establishing themselves for long-term growth in this space.

Because MAPs are comprised of independent insurance agents, myriad disparate software systems can be found in use across their memberships. There is a long list of agency management systems, marketing tools, commission and accounting tools, website platforms and customer portals, licensing and E&O compliance tools, custom rating calculators, carrier and comparative raters for standard and personal lines, and “magic spreadsheets” to manage ancillary operational activities.

These disparate systems bring with them an equally long list of quirks and inconsistencies, making the already daunting task of managing members and carriers even more so. Larger MAPs can be comprised of thousands of member agencies, so standardizing around a software implementation model will be a key factor for MAPs to scale.

In a word, it’s about data.

Business intelligence

Business growth is about developing powerful strategies and then executing on them. The soundest strategies are derived from meaningful, actionable data. As MAPs grow, the data demand becomes less about their own corporate-level information and more about the collective data of their swelling membership ranks.

MAPs need actionable data to make important decisions about the direction they will take their businesses, and they require continual data flows to monitor the success of those decisions once implemented. Success will depend on an organization’s ability to analyze production across members’ books of business in real time, and that can’t happen without a method to easily, consistently and repeatably aggregate data across the entirety of the MAP.

Some systems today can offer a top-line view of their business, with a focus on new business premium, gross revenues, overall expenses, and how these Key Performance Indicators (KPIs) line up with internal growth targets.

Business growth is about developing powerful strategies and then executing on them. The soundest strategies are derived from meaningful, actionable data.

But what these organizations increasingly require is a deep, bottom-line analysis, with financial insights at the member level, including net income, close ratios, expenses, and agency retention.

Armed with this information, MAPs will not only gain a fresh perspective on their overall business and its outlook for the future, but they will also find themselves in a much better position to serve and drive the success of their members. With this robust, real-time trend analysis, coaching and mentoring will no longer be narrowed to best practices—the new standard will become best results.

Earlier this year, EZLynx announced a new product—”EZLynx for MAPs.” This agency management system, tailored specifically to MAPs, establishes the framework for unprecedented interconnectivity between the MAP and its member agencies. Harnessing the power of EZLynx ONE PLATFORM, EZLynx for MAPs addresses the three pillars of MAP success: carrier management, member management, and commissions processing.

Specific needs for this fast-growing, disruptive segment include:

• Regular, actionable communication between MAPs and their members
• Seamless integration with the member agency’s management system
• The aggregation of carrier data, including policy downloads and commission allocation
• The ability to manage reporting, productivity and success for both the individual agencies and the MAP overall.

Success for years to come

MAPs are enjoying phenomenal, sustained growth. With this success, their focus is understandably shifting toward scalability and the business decisions they must face in this evolving market.

Their futures will depend—in equal measure—on how well they can increase the effectiveness of their member agents and how quickly they can ramp the efficiency of their operations. To facilitate this, they need a solution purpose-built for them.

The author

John McKay is director of sales operations at EZLynx. For more information, visit ezlynx.com.