STRETCHING THE BUSINESS-REACH GEOGRAPHICALLY – Building on BRICK-AND-MORTAR or Mobile-eCOMMERCE setup, which is more effective? 😎
Expanding business reach nationwide is not exactly easy nowadays. With underwriting agents and multi-tier agency models gone since the 1990s, widening the business network has become rather difficult. In the mid 1990s, most insurers worked tactically along simple analogy of opening more branches nationwide in order to extend its reach. In fact, this remained the most important strategy adopted in growing business reach and network. But, what were those problems faced or continued to be faced? “With Motor being a predominant portfolio of most branches, it is time to reinvent the setup along a low cost operation framework…”
The following, perhaps best reflects the issues of a brick-and-mortar branches…..
|1. A question of which is which…. finding the branch manager first or setting up the branch based on a strategic plan? More than often it was about the branch manager first, who would have made enough “dollar and sense” promises before the management is certain of its viability over the mid-term.|
|2. After getting the right manager, then what else? You would continue to get staffing problems and issues pertaining to premium revenue as well as securing the much needed profit margin.|
|3. Costs in respect of maintaining the office and those relating utilities are normally killing the bottom-line.|
|4. The growth at most branches, especially those operating in smaller towns is always stunted after a period of three years. Sometimes we wondered, whether there is any sense in continuing with the branch office in the smaller towns, which incidentally their premium revenues are predominantly motor biased.
|5. Multiple duplication of work processes (including filing) in between the branches and Head Office. In order to streamline those duplications, branches ended up as a mere marketing office! This brings us back to a simple question of why is there a need for a brick-and-mortar typed office, why not just a Mobile eCommerce setup?|
If the insurer is closely linked to a large banking & finance institutional network like in the case of eTiQa, then it is easier to pursue strategic planning part first before sourcing for the right manager.Otherwise, it has always been some uphill tasks getting to the objective.Whenever a particular branch has matured and operating successfully, there is always this issue of the “next-in-line” or succession – you always don’t get them.
It is certainly good to remember, some aspects of business expansion is best done through the agency distribution channels rather than building the cumbersome brick-and-mortar offices.
With so many potential problems ahead, why aren’t insurers putting some thoughts on MOBILE OFFICE CONCEPT to replace the cumbersome branch offices over in those smaller towns? Perhaps we are NOT being modernised in our strategic thinking….. “…if the aftermath is to close down the branch, that would surely be detrimental to its brandname!”
THE MOBILE-eCOMMERCE CONCEPT IN SMALLER TOWNS AND LESS VIBRANT CITIES……. We can continue to recruit the right front-line personnel at a targeted town or location but this time we do not set up any brick-and-mortar office. Instead, we should just armed him or her with various mobile gadgets, like SmartPhone and a wi-fi enabled notebook with accessibility to the company’s designated database and systemised workflow. Since there is no brick-and-mortar office, there should not be requirements for making application to the Central Bank for a branch license…… and I supposed, the Bank must now accept this side of the reality. The objectives of doing so are not scalable…..
“Insurers not only develop their mobile workforce capabilities but also enables such capabilities to be duplicated within members of their distribution channels….”
“Surely the various regulatory bodies can reoriented its thinking into the concept of mobile-eCommerce workforce operating within smaller towns” So, what do you think? If it is ultimately a headache for personnel operating at locations outside HQ’s domain…. perhaps, connectivity problems or the population within those locations are not ready for such adoption or agents are not ready to change their ways of doing things, or even marketing workforce finds it weird working in an office-less environment! “….what about poor connectivity in the smaller towns?”