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The Rough Notes Company Inc.



April 24
10:21 2018

Blasted Myths

With competition from carriers and AI, embracing technology can help your agency thrive

It seems that every couple of weeks we insurance agents hear about a new threat—whether it’s a multi-billion-dollar company like Walmart or Amazon spreading their tentacles into the industry or a well-funded startup touting artificial intelligence (AI), chatbots, and algorithms that streamline sales and claims handling. Not to mention the carriers themselves, investing in new ways of enticing the consumer to come directly to them.

Don’t think of technology as your enemy in this battle, but rather a neutral party that either side can take advantage of.

With each barrage it seems that technology is involved in one way or another. So it’s no wonder that technology itself often is seen as the bogeyman—the enemy helping shape the ugly landscape where the local agent is no longer welcome. And to be honest, that assessment has some truth to it. The Internet is empowering consumers and providing the means to bypass agents altogether. But this notion of technology itself being the culprit is causing some agencies to reject it altogether. As if adopting new tools or automation will make them less authentic. Or, perhaps worse, turning to software like one does a diet pill, looking for a quick fix to a widening problem.

Herein lies the myth: that technology, namely automation, must come with costly tradeoffs for an insurance agency. The reality is that advancements in tech are providing opportunities for everyone, and those who choose to embrace it are those that will thrive. But how?

Begin by identifying your position in today’s market. As a local agent, what do you offer that carriers and AI cannot provide? Before the Internet, this was an easy question to answer. Agents provided clients with advice on everything from home and auto to complex commercial policies. They also provided access to insurance carriers and were very involved with facilitating communication between the two.

But now consumers have access to information at their fingertips and can buy directly from a carrier online. The carriers themselves are relying less on agents for access to consumers (for both sales and claims handling), so money that was spent before on agent commissions is now used to improve the client experience.

So what do agents do? As a result of the commoditization of home and auto in particular, some agencies are expanding into more complicated or specialized products where personal expertise is in higher demand. This is a smart move, at least for the time being. But it won’t be long before AI creeps its way into these products, as well. Trust me, if human beings can develop self-driving cars and reusable rockets, we’ll figure out how to program chatbots to navigate consumers through commercial and high-net-worth insurance.

As a living breathing local agent, which direction do you go? How do you create a sustainable reason for consumers to choose you over the expanding competition? The answer is to provide them with something of value that they cannot get elsewhere. Constantly remind them why they picked your agency to begin with. Develop and maintain personal relationships, provide authentic experiences, state a purpose, only offer incentives that align with your purpose, attract the right audience, and use technology to scale your efforts.

People crave relationships

I cannot overstate how important it is for insurance agents to build and maintain relationships with their clients. In the insurance world, local agents are uniquely qualified to do this and will be for years to come. The good news is that more and more people are craving authentic relationships today, and ironically, technology is mostly to thank for this.

Email and social media have connected us in ways never before possible—but they have also created a void where meaningful relationships used to be. I’m not just talking about people being bent over their phones rather than engaging those around them. It’s on a deeper level. People and businesses alike are using technology as a shortcut over quality communication. And this is happening right when there is a resurgence in society back toward more tangible and authentic relationships.

An example is an agency opting to send birthday emails over handwritten cards. This shift away from investing in client relationships is exactly what the competition wants you to do. But as soon as the personal relationship is stripped away, local agencies have little remaining to separate them from the carriers and AI startups.

Integrate your purpose

Read any local insurance agency’s website and you’re likely to find a paragraph mentioning things like tailored policies, competitive rates, and staff that genuinely cares about you. Most of the time agencies live up to these promises.

The problem, however, is that many clients don’t see it. It’s called perceived indifference, and nearly 70% of unhappy clients eventually develop it (according to research from Rocket Referrals). This happens when agencies either neglect communicating with their clients or when they communicate in a way that doesn’t align with their stated purpose.

A notable example is incentive-based referral programs that offer a gift card for the client if they refer a friend. Such an offering monetizes the relationship and doesn’t align with what motivates people to recommend their insurance agent to friends. An alternative would be offering to plant a tree, or donate to a cause for every new client or referral. Remember, clients expect their local agent to be personal, proactive, informed, caring, authentic, available, local, involved, giving, and organized. Is your communication constantly reminding your clients what you believe?

Not everyone will be a perfect fit for your agency. Some people will always buy on price or prefer not to work with an agent. But for those who are looking for personal service, it needs to be easy for them to find you. Encourage clients to tell stories about your agency and give them a reason to talk about you. Make it easy for them to give you online reviews, testimonials, or share you on social media. The key is to constantly give clients reasons to talk about you and then make it extremely easy for them to do so.


Don’t think of technology as your enemy in this battle, but rather a neutral party that either side can take advantage of. It’s important for local agencies to use technology in a way that not only aligns with their core beliefs but constantly reminds the client of these beliefs. And in this regard, there is no get-rich-quick scheme (that actually works) when it comes to new tech tools for your agency.

Like every other decision, what you decide on needs to be thoughtfully woven into your business in a way that not only aligns with your values but helps you promote them over time.

The author

Carl Maerz is the co-founder of Rocket Referrals, an automated communication strategy that helps agencies improve referrals, retention, reviews and relationships.


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