Achieve growth by assessing technology quickly and remaining adaptable and flexible
Do not compete; adapt. This is the message agents need to hear and take to heart. As so-called disruptors permeate the insurance field, it’s important to learn to leverage technology to enhance your business and not get caught up in trying to compete with digital-only distribution channels.
With the adoption of insurtech, agents would be wise to master innovations before they become “mainstream.” Become pioneers in the digital transformation of the insurance sector.
The rapid pace of change in the industry means agents must assess technology quickly and continually adjust business models to solidify their risk management and consultative roles with customers. Applied Client Network Past Chair Ed Higgins, Jr., CPCU, vice president of Thousand Islands Agency in Clayton, New York, sums it up perfectly: “Disruption will become the new disintermediation of the 1990s, and those who remain adaptable and flexible will realize opportunity for growth instead of the gloom of demise. The juggernaut of technology innovation will not slow down.”
Even as technology-first insurance startups are working to disrupt every link in the insurance value chain, other experts also believe agents and brokers will still be around in the future. For instance, Jon Kelly, chief executive officer of online insurance broker Kelly Klee, says that, with so many set to retire within the next five years, there could be a shortage of agents. Kelly also notes that where there is complexity, agents will be able to add more value than ever. How true.
But to be here—and be relevant—going forward, agents need to adapt to change now. It’s important to keep abreast of the latest technological changes both within the insurance sector and outside.
Higgins believes agents who are good at what they do have no reason to worry because they will hone their risk management skills and adapt to the new environment. He notes, however, “The real challenge is that developing the depth of human expertise needed to provide clear value takes both time and hard work, and that makes it difficult to catch up if you haven’t already started.”
He anticipates change not only in how agents and insurers market but also in terms of processing, with many shifts occurring first in metropolitan markets before spreading to more rural areas. Agents, he believes, are uniquely positioned to offer a more comprehensive alternative communication channel and faster service to insureds with the implementation of currently evolving efficiency assistive technologies.
Clients expect agents to be able to meet their needs quickly and through both digital and face-to-face communication. It’s not only about adopting new applications and insurtech, but also about enabling customers to have a hassle-free experience. This calls for providing clients the ability to complete transactions on whatever device they happen to be using, using simplified forms and streamlined processes from start to finish.
This is not purely a transactional experience; customers want to be engaged with agency professionals and learn the best risk management techniques for their situation. This provides an opportunity to employ video conferencing and other methods of communication in an electronic forum.
With the adoption of insurtech, agents would be wise to master innovations before they become “mainstream.” Become pioneers in the digital transformation of the insurance sector. As an example, Higgins points to Applied Systems’ newly released integrated text-to-agency-management-system transactions, which provide clients the ability to use their mobile devices to complete documents through text rather than mobile email.
With respect to big data and its transformational possibilities, he says that agents can use this information to segment and identify their target customers; and when this data is combined with other efficiencies and available information, they can target their most preferred customers. As data mining evolves, those customers will be the ones with more assets to protect and possibly those in certain age groups, among other factors. Agents must apply the tools of insurtech in a way that not only ensures future agency growth but also adds value for the customer.
Higgins offers some practical advice to fellow independent agents and brokers: “Expect surprise to become the standard of daily business,” and treat these surprises as an opportunity and a challenge to improve. Agents who are most alert to change will not only survive but thrive in the new digital future, he adds.
“Technology over the past 30 years has added a burden to running an independent agency, but at the same time it has both increased the net sale value of the agency as an asset and created a much more positive operating environment for the agent, thus speeding the process of administrative tasks,” Higgins says.
Brian Langerman is chief executive officer of Applied Client Network, the international association of users of Applied Systems software. For more information, visit www.appliedclientnetwork.org.