Independent insurance agents must hop on the digital highway, or risk being overtaken by today’s agile insurtech startups.
To survive in today’s digital world, independent insurance agents must integrate new tech tools into their businesses. If you don’t upgrade your insurance technology, you’ll soon find that you’re as outdated as rotary phones and fax machines.
These were a few of the conclusions reached by insurance professionals at the recent Western Insurance Agents Association (WIAA) state of the industry conference in Irvine, California. As reported in Insurance Journal, many speakers urged agents to power up with technology — or risk losing business to more agile digital startups who are already disrupting the traditional insurance industry.
In particular, Chairman and CEO of The Keating Group James Keating detailed how investing in technology helped him to rapidly and substantially grow his business. Between 2004 and 2009, Keating’s firm expanded by $8.7 million — but from 2010 to 2016, its growth leaped by $52.7 million. He attributes that discrepancy to a technology budget that grew from $1.4 million in 2004 all the way to $6.1 million. “You’ve got to invest in technology,” he stressed.
The Insurtech Revolution
Today’s independent agents don’t just compete with other agents for business — insurtech startups are making a stand. Fueled by sophisticated technologies and innovative business models, these newbies have quickly gained traction by accelerating claims processing and taking advantage of the contemporary consumer’s preference for doing all things online.
At the conference, Chairman and CEO of MarketScout Richard Kerr also singled out several insurtech startups as models that today’s independent agents should follow. For instance, Lemonade allows policyholders to upload claim information via smartphone. He also pointed to a successful use of big data by commercial insurance startup Attune: “because every other data set is out there,” all an insurtech company needs to form a connection is the customer’s name and address, Kerr explained.
In addition to technology, agents can differentiate themselves from the pack by offering specialized services. “You are safe if you are a specialist,” Kerr said. “But if you’re doing a very generic, mainstream business, you need to be worried.”
Meet Consumers Where They Live
One reason why these startups have been so successful is because they’re reaching out to prospects through mediums that they already frequent. At the same conference, Founder and CEO of Agency Revolution Michael Jans listed several statistics that underpin this trend. Two particular numbers are worthy of note: 81% of consumers research purchases online before shopping, and the average person touches, taps, or swipes their smartphones more than 2,600 times per day.
That last statistic stresses the prominence of mobile in today’s online marketplace. Mobile searches long ago surpassed desktop browser searches, Jans noted, and consumers spend an average of 87 hours per month scanning the internet on their smartphones. Yes, tech-native millennials lead the charge into the mobile world, but those numbers indicate that other generations have also adopted modern technology.
Jans also cited a 2014 Ernst & Young poll wherein 44% of consumers said they had no interactions with their insurance agent in the past 18 months. (That same survey also noted that when consumers did contact their agents, they were overwhelmingly satisfied with the service provided, which proves that your clients still appreciate a human touch.)
Therefore, if agents want to connect with prospects or service clients, they should be online and mobile-enabled. “In our business, if you want to reach people and touch people, we have to be where they are,” Jans said.
Get on the Insurtech Bandwagon
Keating, Kerr, and Jans aren’t alone in urging the insurance industry to swiftly adopt technology. State-level insurance regulators recently pushed for a modernization of insurance systems through data analytics, and the workers’ compensation sector has already begun to integrate digital claims processing and telemedicine to streamline claims filing and treatment oversight.
There’s no reason why independent insurance agents can’t make the same tech transformation. Between agency use of big data for prospecting and performance evaluation, development of an engaging online brand presence (that’s optimized for mobile), and rapid claims-processing tools, there’s no shortage of options. Ultimately, as James Keating’s experience shows, a smart investment in technology will more than pay for itself.