Agents and advisors can expect life insurance carriers to begin to tweak and adjust technology systems to comply with the Department of Labor’s new fiduciary rule by the end of the summer or early in the fall, a consultant said.
The DOL’s Conflict of Interest rule, which is designed to hold agents and advisors managing retirement money to a fiduciary standard of care, is likely to affect technology in two areas — illustrations and compliance — said Tom Benton, vice president of research and consulting at Novarica in Boston.
Carriers will also have to look carefully at how the rule affects agent compensation systems, distribution management and how their technology infrastructures process insurance product information, Benton also said.
But wholesale changes to commission compensation and distribution management are not expected, at least for the time being.
“We’ve not heard much about people replacing systems for that purpose,” said Benton, who co-authored a report out this month on the latest business and technology trends affecting carriers in the individual life insurance segment.
The report, which examines industry trends beyond the DOL regulation, finds that agent-facing portals remain a hot topic among insurance carrier information officers. That topic is followed by customer-facing portals and distribution management.
Issues related to customer-facing portals — agent location, educational material and planning tools and online account reviewing — matter to carriers because customer-facing portals allows them to market to specific demographic segments.
Customer-facing portals allow carriers to reach Asian or Hispanic customers through microsites, or to target segments interested in financial planning or retirement solutions.
Challenges related to distribution management including data integration, licensing, commission management, producer self-serve and contact management, follow closely behind issues related to agent-facing portals, the report found.
Carriers with recent developments to their agent portals include Principal Financial Group, Lincoln Financial Group, the Portuguese Fraternal Society of America, Security Mutual Life Insurance and Gleaner Life Insurance Society, the report said.
Benton said more life insurers are moving toward a subscription-based, software-as-a-service model in which carriers aren’t committed to large capital investments in technology infrastructures.
After years of focusing on product innovation, life insurance carriers are spending more time improving the customer experience.
Carriers have also shown more interest in collecting data through wearable technology, for example, to underwrite a life insurance risk, the report found.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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