Page 266 - Performance Leadership

Chapter 13 The Insurance Performance Network • 255

for the channel partner, showing the ease of use in doing business with
the insurer, is the same as the measure of success of the insurer itself:
the channel preference leading to a higher share of channel wallet.
As in every relationship, there needs to be transparency between the
insurance company and its channel partners. In addition to transac-
tional information, there should be an information supply that helps
the channel partner to evaluate the business relationship with the
insurer, or even better, that helps the channel partner in its own busi-
ness. For instance, think of benchmark information that allows the
channel partner to benchmark itself against its peers. The insurer has all
the information from all the parties it works with in a certain channel—
such as the intermediaries—and can provide additional value by com-
paring each specific intermediary with its peers within a certain region
and of a certain type (such as small, medium, or large). Also, both par-
ties may exchange operational information on marketing campaigns
that the insurer ran for the channel partner. Think of follow-up lists,
response rates, or conversion rates. Lastly, of course, the insurer needs
to supply management information about the costs it saved for the
channel partner and the opportunities it generated.

Managing Joint-Value Relationships
In joint-value relationships, the insurer and one or more channel part-
ners work together to create a joint-value proposition and bring it to the
market. Whereas in transactional and added-value relationships each
party has its own objectives, within a joint-value relationship they have
the same objectives. This means each participating party should have
a full set of management information, similar to what it would demand
within each organization.
The bottom-line metric for joint-value relationships is obviously prof-
itability; however, each of the parties should compare the joint prof-
itability with his or her own. The joint-value relationship may be
profitable, but may not bring the same percentage of return. Or it may
bring more, and the partnership could be extended. It is also impor-
tant to measure the percentage of revenue and profit that the joint ini-
tiative brings to the overall result. The initiative should be material, but
if it has too much impact, perhaps a different relationship is needed,
such as a merger or acquisition.