By Jacob Spitzley, Director, Product Management, RegEd
About the Author: Jacob joined RegEd in 2005 and has held progressive roles in Support Services, Implementation and Relationship Management and Product Management. In his role as Director of Product Management, Jacob is responsible for overseeing the Xchange solution suite and works closely with our clients to identify enhancements that will address their evolving requirements and continue to move Xchange forward on the innovation curve. By working closely with and supporting Xchange clients over the last 15+ years, Jacob has gained deep knowledge across a broad range of client configurations and strong insight into best practices for licensing and registration work processes.
In today’s highly competitive insurance landscape, arming your organization with the right technology to drive efficiency and avoid risk is crucial for business success. Producer data reconciliation is one area where insurance companies are currently seeking to optimize the way they do business, pursuing best practice methods and tools for maintaining producer data. Technology and Operations leaders are spearheading initiatives whose primary goals are to ensure the uninterrupted placement of business, avoid not-in-good-order (NIGO) transactions and reduce costs related to unproductive licenses and appointments. Ensuring accurate and up-to-date producer information is essential, but building an internal solution for this task may not always be the best choice. In this blog post, we will explore the top five reasons why leading insurance companies have chosen RegEd’s Xchange solution rather than building a producer data reconciliation solution internally.
Top Five Risks of Building Your Own Producer Data Reconciliation Solution
As firms weigh their options for ensuring a seamless transition for their producer data management process, there are a wide range of criteria to consider in making the decision to build a solution internally, or rely on a for-purpose solution from a commercial provider. In our discussions with clients and other firms in the industry, the following are the top five risks to consider when evaluating that decision.
1. An Internal Build is Often More Expensive and Less Capable
When contemplating an internal build, it’s essential to consider both the cost and capabilities of the solution. RegEd’s experience with large insurance companies reveals that internal builds can be costly, with estimates ranging from $250,000 to $600,000, depending on whether business rules are incorporated. The less expensive option may seem tempting, but it often requires consistent manual intervention, reducing efficiency and potentially introducing errors. On the other hand, building a more robust solution with business rules incurs higher costs, longer development times, and a much higher maintenance burden.
2. Miss Out on the Opportunity to Gain Valuable Competitive Intelligence
Distribution leaders want to identify ready-to-sell producers that are not appointed by them as well as producers that are appointed, but also selling for other insurers. Beyond the basic data reconciliation process, Alerts 2.0 delivers competitive intelligence that can provide substantial business value. Insurers typically fail to explore this opportunity because they lack the infrastructure to store and analyze the data effectively. RegEd’s Xchange solution not only reconciles data but also stores and reports on valuable competitive intelligence. This data enables insurers to tailor their marketing and recruiting efforts more precisely and stay competitive in the market.
3. Significantly Increased IT Maintenance and Support Burden
Developing and maintaining an internal data reconciliation solution comes with a substantial IT maintenance and support burden. RegEd actively manages various aspects, such as transaction tracking, monitoring, and server maintenance. By relying on RegEd’s expertise, insurers can eliminate the need to build capabilities to monitor the process continuously, freeing up IT resources for more strategic initiatives. Additionally, RegEd fully manages all transaction fee payments and state-specific data nuances, further reducing organizational strain.
4. Take IT Cycles Away from Projects that Deliver Competitive Advantage
In today’s insurance landscape, IT resources are precious and must be allocated wisely. Insurers must prioritize projects that drive innovation and provide a distinct competitive advantage. Building and maintaining an internal data reconciliation solution can consume valuable IT cycles that could be better spent on such projects. RegEd’s Alerts 2.0 solution offers a best-practice approach to producer data reconciliation, preserving critical IT resources for innovative initiatives.
5. Increased Number of Failed Updates Resulting from Inadequate Test Environment
Large insurers often deal with complex data matching challenges due to various factors, including multiple licenses, lines of business, and jurisdictions. RegEd’s testing environment is purpose-built to support rigorous testing, ensuring that complex test cases are thoroughly evaluated. This eliminates the risk of data reconciliation failures that are often associated with internal builds lacking access to a robust testing environment.
In conclusion, while the idea of building an internal producer data reconciliation solution might seem appealing at first, it’s essential to weigh the costs, capabilities, and long-term implications. RegEd’s Xchange solution offers a compelling alternative, providing not only data reconciliation but also competitive intelligence, reduced IT maintenance burden, resource conservation, and a precisely honed testing environment. By choosing the right partner, insurers can streamline their operations, reduce costs, and gain a competitive edge in the insurance market.
How RegEd Can Help
For more than 15 years RegEd has enabled our clients, which include 37 of the top 50 insurance companies, to sync producer and agency records on a daily basis. Xchange Credentialing, Powered by Alerts 2.0 can be integrated directly with a company’s database and automatically reconciles data with the most up-to-date producer and agency information available. This facilitates continuous business placement and avoids the need for manual intervention when data is out of date or inaccurate.
RegEd Xchange automates more than 95% of updates straight through. Our systematized, near real-time approach delivers significant benefits relative to internally developed tools and other commercially available systems:
- Alerts 2.0 is the Proven Solution. The vast majority of top 25 insurers depend on RegEd’s Alerts 2.0 to ensure their producer data is continually and automatically reconciled with official state records. Since introducing the original Alerts solution in 2007, RegEd has refined our processes over more than 300M alerts delivered to date.
- Materially Reduce Non-Compliance Risk. RegEd’s approach is full data reconciliation with comprehensive audit trails that prove compliance; Alerts 2.0 calls out RIRS actions so that they can be immediately addressed.
- Eliminate Significant Manual Work for the Licensing Operations Team. Alerts 2.0 delivers a full record of all changes with every reconciliation, avoiding the need for Licensing to consistently identify what has changed to take additional actions. Our process filters out the “noise” from updates based on business rules, e.g. irrelevant LoA, license types and other Carriers.
- Avoid Consumption of Your Valuable IT Resources. RegEd manages transaction tracking, monitoring, ongoing maintenance and maintains dedicated servers for data reconciliation to ensure performance is not impacted, avoiding the need for the client’s technology organization to own those tasks. In addition, RegEd’s testing capabilities far outpace what firms are able to do on their own.
- RegEd fully manages business processes and delivers economies of scale. RegEd manages business processes including billing, tracking and invoice reconciliation, which relieves your team of the burden of self-managing fee payments and tracking and ongoing maintenance through a general call center. RegEd clients realize significant economies of scale and leverage our buying power, resulting in significant cost savings.