Well, wishing all you bloggers out there a happy new year.

I was reading Jacques Kemp, and here he has written about Agent Productivity and Retention. Some excerpts here.

A 2006 Limra report, Agent Production and Survival Asia Region, tells us that of newly hired agents in 2004 in Asia, 72% stayed in their function after one year. Of the ones that were hired in 2003, 58% did not leave the company. Agents hired in 2002 and 2001 stayed in their function in 70%, respectively 81% of the cases. The four-year retention rate average was 20%.

Insurance agents need considerable training and the insurance company that can improve retention rates would thus be able to significantly reduce costs of recruiting, hiring and learning. That is also more or less Limra’s conclusion in the report on what to do: hire, train, compensate and help agents better in doing their job.

The ending observation is also interesting

By rolling out online hiring tools with pre-filtering profiles, embedding efficient e-Learning in the agents training program, providing agents with tools (mobile or desktop based), and many more such activities, ING and competitors in one way or the other, are trying to push the break-even moment sooner.

Paradoxically enough, this will not entirely solve the issue because retention after the break-even moment becomes an even more urgent matter that cannot be addressed anymore with a first aid kit of training and hiring.

If I got this right, these are the challenges with Sales agents.

1. Long learning curves for new agents. There are so many products to learn about
2. High attrition rates
3. High cost of training. It takes months/years for agents to become productive, and even longer for the company to break even
4. Decision making by the sales agent is manual, and Needs expertise

Approaches like improved training are at best short gap measures. Now, how about something like this.

1. Creative decisions that agents take, like say, suggesting college tuition payments for children, what if your Agent portal can suggest this possibility to the agent, if given the customer details
2. What if the system can suggest the best product match for a prospect, and suggested benefits.
3. What if the system can make appropriate up-selling, cross-selling recommendations?
4. What if the system can suggest what information to collect from a customer/prospect?
5. What if the time and cost spent on training, can be used to build a intelligent product recommendation/agent assist service that will take the decisions that an agent is expected to take.

I would venture out to say, that such a solution is not wholly unimaginable. Business Rules Management Systems, provide for such a solution.

Now let us see, how we can think of a solution.

1. Capture all the product eligibility, underwriting guidelines, rate sheets as Business Rules using a Business Rules Management System
2. Capture the customer/product match logic that is now available with the company, with experienced agents as business rules (recommendation rules)
3. Supply applicant information to the Rule engine, and the rule engine takes provides the appropriate recommendation

Now, depending upon the extent to which the rules have been captured you can do any of the following

1. Provide an online, fully automated Web Agent that will guide customers/prospects using a Rule driven user interface through out their interaction
2. Provide an Agent portal that will provide recommendation assistance to Sales agents on the field.

So, what are the benefits that I see with this approach?

1. I am not sure you can do without agents, as many customers require a personal touch
2. But, the time & money spent in training agents on all the company’s products can be brought down greatly by deciding to automate the business decisions that agents are expected to take. Remove the expertise factor, essentially!
3. Get rid of agents for low margin products, and use a Web agent exclusively

Well, what do you say to that?