As the regulatory landscape for the insurance industry has grown in complexity, compliance has become a critical but unseen component. Regulations have become highly complex, and insurers now need entire departments allocated to these efforts, as non-compliance costs are often greater than those of an effective compliance program.

Rhoads Online, Senior Vice President of Operations Allister Yu, says, “The insurance industry has become riddled with ingrained operational inefficiencies, limiting insurers’ ability to grow. Adding to the burden of the already time-intensive effort of tracking and managing licenses, the risk of non-compliance is far too great to ignore, with steep fines and a risk to future business and customer loyalty.”

In 2020 alone, more than 41,000 fines were levied against producers by state insurance departments, totaling $33 million in penalties.

The increasing number of regulatory actions state insurance departments take sends a clear message to agencies, carriers, and brokers that compliance is more critical than ever. For insurers to meet their sales goals, it’s essential that their producers be licensed correctly in all the states where they are doing business. The proper management producer license compliance allows insurers to optimize their profitability.

While compliance with producer credential requirements is more important than ever, its management has become a complex and costly endeavor. Making sure an expanding roster of producers remains licensed takes significant effort and coordination across the agency.  That’s why agencies of all sizes are now turning to cloud-based, automated technology solutions for efficient, effective production.

As a technology-driven organization, Rhoads is focused on delivering innovative solutions that address the complexity of insurance compliance. Their software is a critical element of an end-to-end solution that manages an insurance professional’s licensing regulatory compliance lifecycle from appointment through termination.

Speaking about the trends that Rhoads Online has identified, Yu says there are three significant trends that are transforming the insurance industry –

1.    Art of Automation

2.    Future of AI and ML

3.    Advanced Analytics

“The Rhoads platform allows agencies to analyze years of archived compliance data, track day-to-day activities, and build metrics around fundamental questions such as, ‘Which producers are generating the most business for us?’ ‘Who do we quote the most business with?’ and ‘Which salesperson is the most productive?’”, says Yu.

With these questions answered, agencies can make strategic business decisions powered by real-time data and insights.

The industry faces two significant challenges: the cost of compliance and ongoing talent shortages. The total cost of compliance is estimated to be $3.1B/year. With almost 11M active insurance licenses today, its management has become a Herculean effort.

For agencies, transforming the management of the producer credential lifecycle into an automated, highly efficient set of processes addresses the many challenges of keeping up with changing regulatory rules and a growing roster of procedures. Agencies that adopt modern producer credential management software can drive profitability by doing more with less and reducing the risk of non-compliance and fines.

Automation and technology can address the routine tasks that compliance teams need to perform, freeing them up to apply expertise. Strategic automation allows an insurer to utilize their compliance experts' existing knowledge. Automating compliance saves on operational and back-end costs. It is allowing organizations to do more with their current workforce.

Elaborating on the statement – world-class compliance management software and services for insurance carriers, agencies, and adjusters – Yu says that regulatory compliance is one of the top use cases for automation in the insurance industry. Using a centralized, purpose-built producer credential management solution to standardize and automate the processes involved in managing producer licenses can dramatically improve efficiency, reduce the cost of compliance, and limit the risk of non-compliance. With a greater number of agents and licenses able to be handled by a compliance staffer, producers can be onboarded faster and start selling sooner.

The Rhoads PRCM software allows agencies to centralize tracking of all producer information, including demographic, licensing, appointment, employment, and continuing education (CE) data. It can also streamline and automate repetitive, time-consuming producer license tasks, including License applications, Notifications, and reminders, and License updates.

Citing a case study, Yu says, “Our client had multiple offices managing their compliance functions, and the head office had to devote significant time and resources to acquire all of their consolidation reports. This left the client unable to move quickly to address market needs, such as rapidly licensing and allocating adjusters to areas with a greater need. In this instance, a hurricane hit the state. The Rhoads PCRM platform allowed the client to consolidate and provide superior services to their regional offices while allowing the head office to see the real picture immediately. The solution provided intelligent services, which helped automate multiple functions, allowing for a significant reduction in headcount to manage the compliance function.”

Unlike many other InsurTechs, compliance isn’t just an ‘add-on’ feature on their platform; it is the Rhoads platform and is their exclusive focus. They stay on top of new licensing regulations for insurers across all 50 states, and the platform is updated daily, so insurers will never be ‘out of the loop’ or caught off guard.

Their intelligent workflow-enabled solution is developed specifically for the needs of compliance teams, from onboarding through termination. Directly integrated into an insurer’s existing back-office software, the Rhoads platform is able to provide services such as Just in Time Appointments, enterprise integration, and reconciliation.

Although it has long had the reputation of being antiquated and traditional, the insurance industry is now fast embracing digital transformation.

“At Rhoads, we are continuing to grow our footprint by developing innovative tools that focus on creating efficiencies focused on data management and automated workflows in the compliance process. The company is also driven to develop platforms that are integrated with policy, claims, and agency management solutions,” says Yu.