Insurtech startups are poised to disrupt the industry, but research shows that they still have ground to cover. Here’s what that means for insurance agents.
Despite the buzz surrounding the rise of insurance technology startups, a recent survey indicates fewer consumers than expected are familiar with the leading companies among this growing sector of the industry.
Indeed, when J.D. Power surveyed more than 15,000 consumers who had researched an auto policy quote, only 6% recalled the names of well-known insurtech startups such as Lemonade, Metromile, and Trov. Even among those who knew these companies, less than half expressed an interest in actually purchasing a policy from them.
These survey results show that insurtechs haven’t found the widespread adoption that similarly disruptive startups have in other industries. For now, insurance agents can future-proof their business by combining the cutting-edge support of up-and-coming insurtechs with the trust and warmth of person-to-person interactions.
Offer the Best of Both Worlds
When shopping for auto insurance, 45% of those surveyed said they considered multiple sites. That doesn’t mean that agents should offload essential functions to a digital platform, however. Several recent surveys suggest even digital-native millennials remain wary of online-only insurance transactions and prefer to speak to a real person.
While agents may breathe a sigh of relief over not being completely replaced by chatbots, they should nevertheless try to bring new digital offerings into their practice that complement interpersonal support. Because insurtech platforms typically offer standardized policies, agents are still well-positioned to help consumers get the most out of unique policies that you can customize for their needs. Plus, clients will appreciate having agents in their corner who work with them to find a solution when a claim is denied — something that digital platforms often aren’t ready to do just yet.
At the end of the day, clients will prefer expert guidance that can help them get the right coverage at a competitive price. Agents should do what they can, however, to make that process as sophisticated and digitally friendly as possible.
Invest in Your Digital Presence
An increasing number of consumers have been purchasing their coverage directly from insurances in recent years. In 2015, A.M. Best found that 72.4% of policies were bought directly from an insurer or its agents, while independent agents brought in 68.4%.
Tom Super, Director of the Property and Casualty Insurance Practice at J.D. Power, attributes the swing toward direct buying to auto insurance companies upping their digital game and improving the shopping experience. Customers now expect more personalized interactions, whether online or offline, depending upon the services they require.
Like insurers, agents now have the opportunity to communicate directly with clients through digital channels. By using tools such as social media and online marketing, agents can strengthen their bond with prospects. Insurtech firms may be attracting customers with quick purchases or streamlined claims settlement, but their limited investment in long-term retention creates opportunities for attentive, digitally savvy agents.
As the J.D. Power survey shows, insurtech startups haven’t fully caught the public’s attention — at least not yet. However, it’s only of matter of time before their services find wider adoption. By blending insurance expertise and strong client relationships with cutting-edge digital tools, insurance agents can up their game and level the playing field.