INVESTING IN AGENCY TECH
Five considerations for maximizing value and effectiveness
Navigating the insurtech arena
can be a bit overwhelming when you’re not sure
what to look for—and sometimes even when you do
know what you want.
By Chris Paradiso
I have been an independent insurance agency owner for the past 20 years, yet in the past 36 months alone I’ve seen the industry change faster than ever, thanks to continued evolution in the insurtech arena and the effects of COVID-19.
Whether you’re a second- or third- (or more) generation owner or you started from scratch like I did, if you’re like many agents, you recognize the need to upgrade your agency’s technology stack.
Maybe you recently made the transition from a captive arena to an independent insurance agency (welcome to the free world) and you want to build the proper technology into your future.
Whatever the status or reason, your agency is now thinking about investing in technology. And the million-dollar question I get from those like you is this: “Where do I start?”
There is no shortage of providers—potential partners for your agency—that are looking to address a range of different pain points for those of us in the independent agency world. This is where the insurtech world, which has matured dramatically in the past 48 to 60 months, can play an important role.
Navigating the insurtech arena can be a bit overwhelming when you’re not sure what to look for—and sometimes even when you do know what you want. It’s common to be unsure where to start. Let me help you with a starting point by offering some considerations to keep in mind when your agency is investing in technology:
- Identify your agency’s biggest pain point (outline all your pain points, actually).
- Know (or create) your insurance agency’s technology budget.
- Get a feel for what’s available in the market.
- Conduct due diligence on potential partners.
- Achieve success through platform integration
- Let’s take a closer look at each.
Agency pain points
Here’s where categorizing needs versus wants comes into play. In my 20 years in this industry, I have come to realize there are things we agency owners may want—and may be willing to pay for—but it’s not in our hands; it’s in the hands of the carrier or management system providers.
Start by reflecting on your day-to-day being. What are the problems or frustrations you or your staff seem to run into again and again? These are your pain points, and we want to solve them first. It’s important to rank the points because we must take them on one at a time.
Low client retention numbers, long or tedious internal processes, data aggregation issues, automation in general, or disorganization all signal foundational issues. The great news is that many insurtech firms already offer solutions for these core functions.
Your budget
You’ll need to review your existing budget to see what you can invest in technology. If you don’t have a budget, wait until you understand your finances before starting to look into technology. If you struggle with creating a budget, then hire a professional to help you; it matters to your future success.
Insurtech products range widely in cost. Some include onboarding, training, and support fees in their product cost, while others may charge extra for these services. Training is vitally important to your agency’s success, so if you purchase technology that comes without it, make sure to budget for user training.
It’s also vitally important to look at what problems each product is solving. If the insurtech firm offers one solution that can solve several pain points, it could be worth a higher cost; if it doesn’t doesn’t meet your needs, don’t just settle. I have seen so many agencies pay too much for technology, not realizing they are overpaying in large part because they already have technology that overlaps.
Do your research and always include your agency’s key teammates. The bottom line is that investing in technology will help take your independent insurance agency to the next level by giving you and your clients the most value. Identify which products offer the best return on investment, taking into account any future rate increases and training/support costs.
The landscape
Insurtech products you should consider for your core tech stack may include:
- An agency management system. Our agency loves HawkSoft 2-way API integration for customer relationship management.
- Billing and payment automation solution. Our agency has been using ePay Policy successfully for the past four years.
- Personal lines and/or commercial lines comparative rating tools. We are on Tarmika and have been very satisfied.
- Data aggregation on personal/commercial and niche NPS/Sentimeter Score. We value what Rocket Referrals and DONNA bring to our agency.
Once you’ve minimized your agency’s biggest pain points, you can begin to explore nice-to-have solutions. These could include:
- Lead generation tools
- Virtual assistants and the technology that protects your agency data
- Marketing automation solutions
Each independent insurance
agency and their needs differ from the next.
We are all so very different.
Their reputation
Please remember that about 90% of insurtech startups fail, so it’s wise to be careful when choosing which one(s) to buy for your agency. Imagine integrating a new piece of technology into your agency’s workflow, only to have it cease to exist a year later. This is very costly and frustrating.
Don’t be afraid to ask carrier reps and other agency owners about the tech company you may be looking to use. Dig deep into the pros and cons. Also, ask the sales rep about the growth of their company, or put feelers out into the industry for feedback.
Your colleagues will always be willing to share their experience—the good, the bad or the ugly! Invest time and energy in your research.
System integration
It’s possible to do your home-work, decide on providers, and plan your financial outlay—but that doesn’t mean you’re ready to pull the trigger. You’ll set yourself and your team up for failure if the different tech platforms you’re looking at don’t communicate well with each other.
To “communicate well with each other” means being able to seamlessly pass data from one platform to the next. This is critically important it will prove to be a huge time-saver for your team, which will be a huge money-saver for your agency. And it also helps with staff buy-in.
Simply put, when identifying new tech products for your agency, be sure to consider the available integrations. You need to determine whether or not the technology offers native integrations with your agency’s management system, customer relationship management system or tools, data platforms, payment processing offering, commercial rating platforms, and lead generation tools.
If there are limitations with direct integrations for your existing tech stack, see if the technology offers some sort of built-in solutions for streamlining cross–platform workflows. Or perhaps you can use an automation tool such as Zapier in place of direct integrations.
Often, it’s possible to find integration partners of a solution listed on their website, so make sure you are doing your homework. And if the info is not readily available, don’t be afraid to pick up the phone and call to make introductions to each other, asking if they can and/or be willing to integrate with each other.
Find success
Now you’re ready to invest and move on! Of course, the list of considerations does not stop here. Each independent insurance agency and their needs differ from the next. We are all so very different.
You’ve decided it’s time to invest in technology for your agency—and these points are a great place to start. Good luck, and please remember to reach out to me with any questions. Wishing you and your agency massive success.
The author
Chris Paradiso is president of Paradiso Financial & Insurance Services, headquartered in Stafford Springs, Connecticut. His agency won PIA National’s Excellence in Social Media Award in 2013. He also heads up Paradiso Presents, LLC, which provides social media consulting, seminars and workshops to help agencies thrive in the online marketing world. Contact Chris via email at cparadiso@paradisoinsurance.com.
