DISTRIBUTION MANAGEMENT DRIVES PROFITABLE GROWTH

No doubt, the insurance marketplace is under tremendous financial pressure to grow the top line while improving profits.

To meet the challenge, carriers and MGA's must step back and evaluate key business issues that are often the root cause that challenge profitable growth:

• Distribution strategies
• Understand the current and future needs of customers
• Segment customers based on profitability
• Focus acquisition costs towards profitable growth products
• Increase retention ratios of profitable business
• Leverage information and technology to drive growth

The heart and sole of any carrier or MGA is their distribution. Over the past 10 years, the pendulum has continued to swing around the merits of multiple distribution and/or channel strategies are essential for a firm's growth. Regardless of your distribution strategy(s) one thing is certain, profitable growth starts with a critical eye on distribution management.

At InStrategy Group, we work with clients to evaluate sales and distribution management profit performance. We take an enterprise-wide view of the customer base and break it down into a series of profit segments. Ultimately this leads us towards identifying and implementing a robust set of key indicators that help to proactively identify underperformance on a go-forward basis. Conversely, a customer profile begins to emerge that enables clients to fully understand the distribution DNA that can more readily support profitable product and service growth strategies.

The heavy lifting is to first understand what you have, labeling what is profitable and what is not and implement the fix(s). Only then can you focus on the growth options.

Profitable growth comes through three primary efforts at this stage:

1. Identify the prospective target distribution that supports your profitable growth strategy (Source the DNA)

2. Understand their needs and requirements (Profile DNA)

3. Leverage technology to reach the target distribution in the most profitable and cost efficient manner possible (Touch the Client)

As with anything in business, success is achieved through execution. Top Tier underwriting firms continually tell us that they have learned that profit performance is equally balanced between account underwriting and distribution management. Both done with focused discipline and rigor enables sustainable and profitable long-term growth regardless of market cycle.

For more information on distribution management, visit us at instrategygroup.com or call us at 704.843.3207.