The Cost of Doing Nothing
Why Carrier's Can't Afford to Ignore Modern Distribution Management
Carriers often cite budget constraints as the primary reason for delaying improvements or replacements to their distribution management and incentive compensation platforms. But at Chestnut, we believe the real question is: Can carriers afford not to invest in modernizing these systems?
Modern purpose-built platforms, like Chestnut's Producer Performance Management (PPM) platform, empower carriers to overcome critical operational and strategic challenges, unlocking significant business value through both cost reduction and revenue growth. While reducing costs is often the driver for the business case, carriers emphasizing revenue-centric benefits can build a more compelling business case that demonstrates a strategic vision that will more effectively resonate with key stakeholders and decision-makers.
The revenue-centric side of the business case is driven by the increased capabilities supported by the technological and functional advances of a modern cloud-based platform. Carriers can embed strategy directly into compensation plan design, elevate the producer experience, and streamline operations. This trifecta delivers wins across the board: greater efficiency, lower costs, and better producer satisfaction.
Consider the opportunities unlocked by incentive compensation plan design without limitations – carriers can fine-tune payout on higher margin products, reward producers for business quality, efficiently launch new products, and create competitive advantages in key markets. Tacking on advanced analytics and AI further extends these benefits by providing insights to support cross-selling initiatives, product placement, and customer profiling.
Modern cloud-based platforms easily support these strategies and deliver the capabilities and time-to-market advantages to boost growth, retention, and profitability. The financial impact of improving these critical areas by even just a percentage can deliver returns on investment that easily exceed 100x that of a cost reduction-based business case.
Many carriers fall into the “if it ain’t broke, don’t fix it” mindset regarding their legacy systems. However, sticking with the status quo in today’s competitive landscape is far riskier – and far costlier – than investing in a market-leading solution. For carriers ready to embrace the revenue-centric of the business case, Chestnut’s PPM platform is ready to help to turn distribution management into a true revenue driver, ensuring long-term competitiveness and success.
