This post is part of a series sponsored by AgentSync.
The Hidden Cost of Manual License Verifications
Ensuring insurance producers’ licenses and appointments are compliant is a crucial task for everyone involved in the insurance distribution channel. Unfortunately, many insurance companies struggle each year with inefficiencies in the license and appointment renewal process. When you add distribution partners selling variable insurance products, such as variable annuities and life insurance, these challenges increase significantly.
If an insurance company’s renewal process relies on outdated manual workflows, they may be unable to handle the vast number of renewals, leading to delayed revenue and dissatisfaction among producers and customers alike.
The Producer License Renewal Process for Carriers
License and appointment renewals occur on an annual, biennial, or other schedule, depending on the states in which a producer operates. Fortunately, AgentSync has compiled a list of the 2024 carrier appointment renewal and termination deadlines for your convenience. Note that many termination deadlines for 2024 have already passed, but renewal deadlines are upcoming, and we will provide an updated list for next year soon.
The renewal process is quite traditional. It starts with states compiling a list of producers and organizations each carrier currently appoints. Carriers then review their appointments to decide which producers to keep and which to terminate. To avoid unnecessary appointment fees, carriers must submit terminations by their home state’s deadline.
After the termination deadline, carriers usually have a few days before they can pay appointment renewal invoices. Once invoicing begins, making changes becomes difficult, so carriers need to terminate any inactive producers beforehand to reduce costs.
License Verification: A Critical Step in the Renewal Process
When deciding which downstream partners to reappoint or terminate, carriers must consider several factors. While the basic idea is to terminate producers with invalid licenses, other considerations are also important.
Carriers need to know which of their producers and broker-dealers are licensed to sell insurance and securities, and in which states. Various reasons can render an insurance or securities license invalid, so carriers must ensure their distribution partners remain compliant to avoid losing licenses.
Additionally, renewal is an opportunity for carriers to evaluate which producers are worth the cost of partnership. Paying to appoint numerous producers who aren’t actively bringing in business, or appointing a producer in every state when they only operate in a few, can be a waste of resources.
The Challenges of Manual License and Appointment Renewals
1. Data Collection
License verification involves gathering and comparing a significant amount of data. Insurance carriers often have multiple full-time employees dedicated to checking and verifying information from state DOI websites, producer databases, FINRA records, background checks, and CE credentials.
For carriers with a few producers or broker-dealers, this manual approach may be manageable, but it’s far from ideal. Trying to manage verifications manually at a larger scale is a time-consuming, costly, and frustrating process.
2. Data Validation
Once the necessary data is collected, ensuring its accuracy and currency is a challenge. Manual data tracking and collection often leads to verifying one internal source against another without assurance that either record is correct.
Multiple people manually inputting producer data across different systems increases the risk of human error. Without a single reliable source, the accuracy of data is often compromised.
3. Data Analysis
When producer license and appointment data is in one system, policy data in another, and commissions data elsewhere, consolidating all this information into one view is extremely difficult. Determining the true cost of each producer and their return on investment on a state-by-state basis becomes nearly impossible with data locked in separate systems.
Compiling a list of terminations for each state before deadlines requires extensive manual work, forcing carriers to appoint every interested producer in every state. This results in paying fees for individuals who may never conduct business.
What Manual License Verification and Renewal Costs Carriers
Manual verification and renewal of producer and broker-dealer licenses incur more costs than many organizations realize. Initially, there’s the direct cost of employing multiple full-time staff for data collection and verification. With automation, these employees can focus on revenue-generating activities.
Consider the direct and indirect costs of manual processes:
- Money lost on non-compliant applications
- The cost of appointing non-selling producers
- Lost revenue due to renewal backlogs
- Missed partnership opportunities
At first glance, inefficiencies in the renewal process may seem minor. However, manual workflows add unnecessary costs to your bottom line and hinder your growth potential.
Overcome Renewal Inefficiencies with Automated Solutions
Implementing a modern solution that automates the flow of producer license and compliance data across systems reduces manual efforts and eliminates inefficiencies in renewal and appointment processes. Automation can significantly reduce costs associated with manual management of these workflows. Consider the benefits of automation:
Free Your Team from Manual Data Collection and Analysis
No one enjoys sifting through paperwork or navigating various websites and databases to validate a license or renew an appointment. It’s a frustrating, time-consuming, and inefficient use of talent.
An automated solution provides real-time broker information from the industry’s trusted sources with just a click, eliminating data silos and ensuring access to accurate, up-to-date data when needed.
Reduce Backlogs
Bottlenecks in renewal processes create backlogs, preventing distribution partners from effectively distributing products. This frustrates producers eager to sell a carrier’s products but unable to do so without a valid appointment. When producers can’t sell your products, consumers will find alternatives, causing you to lose business.
Accelerating the renewal process with automation allows producers to navigate the process quickly and with minimal obstacles. Producers prefer partnering with carriers that facilitate faster sales rather than impede their efforts.
Cut Costs
With automated, accurate producer data integrated across systems, generating reports on business activities and location becomes straightforward. This saves carriers significant amounts in appointment fees and enables them to focus resources on their top performers. Imagine how much simpler renewals are with this visibility into the ROI of your distribution partners.
Streamline Appointment Renewals to Keep Your Business Moving Forward
Tracking active producer appointments accurately throughout the year helps carriers make informed business decisions at renewal time and scale effectively. If you want to simplify the appointment renewal process for yourself and your distribution partners, AgentSync can assist.
Our modern distribution channel management solutions provide carriers with accurate producer data when needed, expediting license verification and simplifying appointment renewals to minimize backlogs. If you’re ready to enhance efficiencies in your operations and strengthen partnerships with your distribution network, learn how our solutions can drive your growth or contact an AgentSync expert today.
