Providing customers with the right tools,
resources and experiences can amplify an independent agent’s value
By Lori Widmer
It seems that for years there have been those forecasting the demise of independent agents and brokers. The growth of direct writers, mergers and acquisitions (M&A), and increasing customer demands were some of the trends most often cited.
More recently, as Chris Cline, executive director of IIABA’s Agents Council for Technology, puts it, “We were a few years into the proliferation of insurtech and untold billions of dollars of external capital attached to the notion that traditional agencies and insurers weren’t offering the services that today’s consumer needed and could be easily disintermediated.” And a very real number of new tech-first entrants into the industry seems committed to displacing many traditional businesses.
How times have changed.
What a pandemic and a digital evolution did to the industry was reveal the fact that independent agents and brokers were not going away. Moreover, they were gaining strength and competing with intent. Cline says the proof of independent agency strength is in the numbers; the number of independent agencies grew from 36,000 in 2018 to 40,000 in 2022. “And the IIABA 2024 study supports the strength of the channel,” he adds.
Some of this strength seems to be coming from a bit of recoiling in the merger and acquisition activity, says Cline, which he says could be the reason why there is a significant number of new startups. “Through this proliferation of M&A, we’ve now seen sellers who have gotten through their earnouts and their non-compete and non-solicitations, and maybe realize that they’re happier as an entrepreneur running the business than as an employee of a very large firm.”
Still, that’s just part of the reason. Perhaps a larger factor is the explosive evolution of technology within insurance, driven by solutions that make it possible for small agencies and brokers to compete with captives, direct-to-consumer solutions, and the larger firms. Technology, in Cline’s view, has enhanced the agent’s ability to reach customers and deliver meaningful value to even younger generations of customers on a more personal level.
In complex times, he notes, there tends to be a flight to quality, and that’s where independent agents and brokers have the upper hand. Already delivering personalized customer service, agents are leveraging tech to improve the overall customer experience as well as interactions with carrier partners.
“All generations, even digital native consumer bases, really want to make educated decisions” and a tech-savvy agency, he says, can help ease that decision-making process while offering more efficient and timely service. Providing such tools and resources and experiences, he says, really amplifies the value that the independent agent can bring.
“All generations, even digital native consumer bases, really want to make educated decisions.”
—Chris Cline
Executive Director
Agents Council for Technology
Embracing a tech process
What those tools are, he says, matters. But technology is only a piece of the equation. As more independent agents and brokers adopt tech solutions, Cline says it’s critical to understand what kind of technology is out there, how it can enhance your operations, what within your operations needs fixing, and what new capabilities you would like to add.
Cline, whose presentation, 7 Steps to Better Tech Decisions, will be part of the January 2025 Insurance Networks Alliance meeting, says that agents and brokers should be more intentional when considering a tech solution. The first step, according to Cline: “Slow down to speed up. You’re okay to pause. Wrap your arms around what you want your agency to be in the next three to five years.” He suggests addressing the following:
- How much do you want to grow?
- Do you want to expand locations?
- What is your desired mix of business?
- What is your target employee?
- Are you a buyer or a seller?
- How large a geographic scope do you intend to reach?
“The answers to these questions create very different, but very viable and healthy options that allow an agency to be successful. But they each require different technology,” Cline says.
Therefore, getting your strategy right is key, he says. “A strategy doesn’t have to be super-complex.” It should take into account those issues that are already presenting a challenge and/or enhance an agency’s capabilities, and the tech solution should address resolving that issue.
While innovation and experimentation is important, focusing your strategy will help mitigate the risks that can come from being sold on bells and whistles without considering if the solution is going to fix a defined challenge. It’s easy, he says, to get enamored with solutions at conferences, social media, or hearing about an agency that may be trying to solve for something different. However, if the solution doesn’t address the real goals of your agency, it can lead to wasted money, frustrated staff and customers, and potentially create more problems than it fixes.
That’s where employee feedback is essential. Cline recommends that employees be consulted on workflows, processes, and what challenges them. “Bring your staff in. Talk about the pain points. Are they consistent, and if they are, is it because you may not be utilizing your current tech solutions to their fullest. Maybe your processes aren’t consistent. Maybe teammates are doing tasks differently. Maybe teammates aren’t up to date on training.”
Consulting employees also helps bring them on board early and show that you’re supporting their needs. That will give you deeper insight into what you need to fix as well as start creating buy-in to change with your team, he says. “Perhaps as important as anything we’ve discussed is keeping your team involved throughout the process. Do not underestimate the need for a real change management effort and helping your employees understand why you’re making these changes,” Cline reiterated.
Only after you determine what problems you’re attempting to solve or what new capabilities you’re looking to add should you be contacting any vendors, says Cline. Once that determination has been made, you can have far more intentional and meaningful conversations with potential new solution providers. You can also use this work to ask current providers for updates on their capabilities. It’s possible you already have a solution in house and aren’t using it to its fullest potential, he says.
Once it’s time to look for those providers who have the tools and resources you need to solve that issue, Cline cautions that vendors should be carefully vetted. “Does the company’s brand align with yours? Are they in the space you’re hoping to fix? How long have they been in business?” He also suggests understanding how the tech solution will integrate with your current systems. “If it solves one thing and creates another problem, what did you really get?”
Support, too, is an important component. Cline talks with members to reiterate that once a product is purchased, buyers should know “what this is going to look like, 90 days after when the dust has settled. What does ongoing support look like? What are the service level agreements for uptime and responses to questions?” In fact, far too little time is spent in these areas, he says.
Choosing the right tech solution can take time and require a more intentional review of the operations of your organization. Yet, if an independent agent or broker wants to provide a more consumer-facing experience, tech solutions can give the independent community a way to add value and compete with intention.
The author
Lori Widmer is a Philadelphia-based writer and editor who specializes in insurance and risk management.
