To The Point

By Mike Ferber

AGENCIES’ FUTURE IS IN DIGITAL INNOVATION

Adopting the right technologies can enhance agents’ value, drive growth

Digital technologies have promised greater efficiency to every industry, and they also have compelling benefits for insurance agencies: Innovation can enhance agents’ value to insurers and customers, drive agency efficiency and enable future growth.

Innovation is more than just buying and plugging in new tools. Successful agencies will apply new technologies, of course, but they also will introduce new ways of thinking and working to produce efficiencies.

If the industry could look into a crystal ball, it would see that agencies in the future will:

• Hire and deliver services to digitally savvy individuals. People in all generations are getting accustomed to digital tools in their daily lives. Agencies will conduct most of their business in digital environments in the years ahead.
• Provide advice as well as insurance. People and businesses buying insurance in the future will need and want advice—especially when they are facing complex risks.
• Focus on their customers’ experience. Whether customers are buying personal or commercial lines, they will have high expectations for service and ease of doing business online. Insurance agencies will need to meet those expectations consistently.
• Choose partners with strong digital platforms. The evolution of workflows in agencies is already helping firms become more efficient. Processes that previously took days or hours will eventually happen in minutes or possibly even seconds. Agencies in the future will seek to partner with insurers, wholesalers, managing general agents and others that run on efficient, easy-to-use technology platforms.

The rise of insurtechs is leading many people to predict disruption for the traditional insurance organizations. A big reason? These start-up firms are delivering a different kind of experience to digitally oriented consumers. Changing customer demographics and new technologies will require agencies in the future to transact business through more digital channels—email, chat, social media—than ever before.

Digital agencies

Looking back 25 years or more, insurance agencies might have considered the following as critical equipment: phone, fax, photocopiers, pens, paper and filing systems. Those are being replaced with digital alternatives. Agencies in the future will rely much more on smartphones, mobile computing, scanners and digital data warehouses. A “digital” agency will be:

• Efficient at administration. Paperless environments and rapid data access will make agencies more productive as well as responsive when customers have questions.
• Super-fast at service delivery. Quoting, binding and issuing policies can happen in minutes, or even faster, in a fully digital agency. Manual processes take far longer to complete.
• Appreciated by customers. Leading retail organizations have set the standard for consumers’ online experiences. When agencies can emulate those experiences with digital technologies, customers will show their appreciation with loyalty.
• Time-savers. Imagine what having extra hours in a workday can do for agencies and their staff members. Faster quoting and binding can give agents time to focus on developing business or servicing existing accounts, which can translate to higher growth and retention.

Future success

How can agencies succeed in the future with digital innovation? Here are few ideas:

• Innovate thoroughly. Innovation is more than just buying and plugging in new tools. Successful agencies will apply new technologies,
• of course, but they also will introduce new ways of thinking and working to produce efficiencies.
• Examine digital options closely. Technology innovations take different forms. There are a lot of solutions out there, and every insurance agency should look closely at what they can do. Hallmarks of effective modern tech platforms include flexibility, scalability and intuitive user experiences. Successful agencies will pick technologies that can integrate with other systems, grow with them, and not take up a lot of staff time to learn.
• Use digital platforms to delight customers. The right tools, delivering the products that customers need, are big time-savers. They also let agencies provide a better experience for customers and staff, which will contribute heavily to an agency’s success.
• Strengthen the agency’s competitive position. Insurance agencies are already used to competing for business, but in the future they also will increasingly have to compete for digitally literate talent. Enhancing the agency’s operations through digital innovation is a great way to be more competitive as an employer and a risk advisor.
• Maximize returns on the agency’s tech investments. Digital technologies, implemented correctly, can help agencies build and sustain growth. A business that’s growing is attractive not only to customers but also to future generations of agents and potential acquirers. Technology can therefore become a valuable tool for agencies that are looking to merge or just want to preserve their independence.

Insurance customers are evolving and using technology more and more in their own lives. The insurance industry needs to do the same. Digital innovation is simply the next step in this progression. Agents who embrace innovation can make insurance transactions faster and more efficient, and they can maintain their important role as trusted advisers.

The author

Mike Ferber is chief executive officer of Dovetail Insurance, responsible for the company’s overall strategy, service and product delivery. He has more than 25 years of technology, process-effectiveness and change management experience. Dovetail’s product delivery services help carriers, managing general agencies and brokers across the United States to bring access to new products and programs to market quickly.