34 ID Trends NAILBA
Business Strategies from page 33
3 recommendations to win
So how can Life and Annuity insurance carriers and distributors adapt and win ? I have three recommendations to start –
Develop a platform-led distribution strategy
Every distributor should now be thinking about how this emerging context will impact product sales , distribution relationships and the market-facing business model . There are several long-term strategic questions to be debated . Here are just a few :
Business origination : What will be the impact on new business origination ? And where will it come from over the next 5 years ?
The wholesaling operating model : What is the future model of wholesaling ? How will wholesalers engage and service the channel ?
Channel sales strategy : Where will my target customers be , and how will I reach them ?
These are fundamental questions that need to inform distribution strategy over the next decade .
“ Get on ” the dominant platforms early
It is simply not possible to compete with $ 44 billion in Fintech platform investment . If you are a national distributor or BGA , choose wisely what platforms you elect to “ buy ”.
An emerging dynamic of the platform economy is the ecosystem . It is critical to buy the flexibility to thrive in an ecosystem . The leading Fintech and Insurtech platforms bring connectivity and pre-built integrations to the table .
There is another central reason to adopt the dominant emerging platforms early , and ahead of your competition . You can ride the opportunity of a “ network effect ”. A network effect refers to a situation in which the value of a product , service , or platform grows based on the number of buyers , sellers , or users who leverage it .
Leading distribution platforms will be rapidly growing the number of customers you can reach – through one efficient digital channel . ( Of note , it becomes increasingly painful and inefficient to do business outside of a platform network as well .)
Smart counsel today is to adopt and use new “ best of breed ” third party platforms early on .
Play to win and embrace the change
The Life and Annuity sector today falls into two camps : early adopters ( change embracers ) and late adopters ( change laggards ). Waiting to adopt emerging technology used to be wise counsel . But in the era of Moore ’ s Law , this is no longer a recipe for winning .
Digital innovation “ lead time ” or “ cycle time ” is becoming an increasingly deciding factor in the emerging winners and losers . And the stakes are higher than ever . One might say that embracing digital platforms has “ compounding returns ”. Competitive advantage can double , or quadruple based on an organization ’ s digital fitness .
Benefits of early adoption
Understanding the dynamic of new distribution technology platforms – and how to win with these platforms – takes time . BGAs who adopt first , stand to benefit from those compounding returns and will be well positioned for market-leading growth and profitability in the decade ahead .