Technology has revolutionized the insurance industry, but there’s still a role for agents.
It’s no surprise that investors spent nearly $1.7 billion on early-stage insurtech companies in 2016 alone. With innovative technologies such as chatbots and machine learning, these startups have upended the insurance industry, completely changing consumers’ interactions with carriers and agents. Their digital platforms have streamlined processes that previously couldn’t be completed without an agent, enabling clients and prospects to buy policies and file claims with a few taps of a screen. The technology on which these insurtech startups are built could soon lead to new underwriting and risk management practices, as well.
While traditional insurers may have some apprehension about these newcomers, they offer established carriers and agents alike some lessons on how to adapt to shifting consumer preferences. Indeed, many insurers believe that their innovations will benefit the entire insurance industry.
Compensation vs. Risk Mitigation
For most of the industry’s history, insurers had little ability to prepare for or prevent payouts. With the assistance of artificial intelligence and big data, however, insurers can now foresee and prevent impending risks almost in real time. With a telematic device placed in a car, for example, insurers can track the speed and location of the vehicle and even alert erratic drivers to pull over, avoiding a costly accident in the process.
Telematic devices in cars are a single example of the Internet of Things’ increasing influence on the insurance industry. In healthcare, for instance, insurers can analyze data collected from IoT devices such as wearable health monitors to recommend lifestyle changes that could forestall more serious health conditions in the future. In effect, insurers now have the ability to anticipate and prevent losses, thereby reducing claim payouts. “The new technologies have the potential to change the game from compensation to risk mitigation,” Simon Tottman, Head of Insurance Research, UK & Ireland, for Accenture, told Reuters.
Speedy Customer Service
As consumers become increasingly accustomed to immediate online customer service, they’re turning to solutions like Lemonade, a digital platform that enables consumers to purchase policies and file claims without needing to contact an agent. That doesn’t mean, however, that today’s consumers have no need for insurance agents. In fact, when insurance tech solutions provider Vertafore polled more than 1,200 consumers, nearly 80% voiced a preference for working with a human agent when submitting a claim.
Ryan Hanley, SVP of Marketing for TrustedChoice.com, a digital platform that connects consumers to independent agents, writes in Agency Nation that successful agents and insurers must combine digital technology with a human touch, emphasizing they cannot rely solely on chatbots to handle all phases of the customer experience. Since insurance customers still seek agents when confronted with more complex insurance needs, it’s up to agents to know when to intervene on behalf of their clients.
“As the actual insurance policy becomes completely digital (no paper policy or physical interaction whatsoever),” Hanley advises, “we must find ways to bring the human being, the agent, into the process at the moments where they are most needed.”