Are insurance agents prepared for the digital age?

0 October 6, 2014 at 7:56 am by

Two weeks ago, I attended the 2014 NAMIC Annual Convention in sunny National Harbor, close by Washington D.C. Nice venue, interesting presentations and some good conversations. NAMIC had asked me to present some findings from the “Insurers, intermediaries and interactions” study, and to engage in a panel discussion with Johnny Lee, President of the National Association of Professional Insurance Agents (PIA), and Dave Evans, SVP of the Independent Insurance Agents & Brokers of America (IIABA). Two very nice guys, and knowledgeable about the insurance agents – their strengths and weaknesses. Are they (the agents) prepared for the future of insurance? Some thoughts.

Implement the interaction triangle

Do your remember this chart?

InteractionTriangle

This is what I called the interaction triangle. Customers require, or even demand, multi-modal and omni-channel access and interaction, so insurers have to provide it. Intermediaries always have been a key interaction point for the “trust product” insurance. For them to retain this role as a special channel, they have to go above and beyond just being a “producer” – they have to become trusted advisers to their customers – maybe even going all the way to becoming customer advocates – and the insurers have to integrate them as partners. For many, especially smaller, insurers, this will require a doing a lot of homework to get their legacy in order (investments was a fun part of the panel discussion), but long term there is no getting around it.

Key is being easy to do business with

For agents, it is all about the money, right? Well, not quite. For agents, the most important value drivers are

  1. Speed of processes
  2. Product quality
  3. Flexibility and customization of solutions for their customers
  4. Level of commissions

in that order. Johnny and Dave were not surprised when I showed this chart – they fully agree that agents have to be easy to do business with, and for that the insurers they work with have to be easy to do business with.

Millennials are different, but the same

When it comes to using technology, multiple access points etc – i.e. the multi-modality I mentioned above – millennials are among the main drivers. But millennials are also looking for convenience, advice and value when buying insurance – all considerations that make agents attractive for them. IF they are easy to do business with…

The insurance landscape will (have to) change

Let’s be honest – most people even in the past didn’t care about buying insurance. If they could have bought a package that included a sensible coverage for the good they bought, they would have.

Millennials are buying less cars, they simply want to get from A to B. That can be car sharing today or a driverless car in the future. Insurers will have to adjust in multiple ways, and the agent is an important part of that.

Ecosystem

I’ll stop here for now. Any other thoughts?

And again thanks to NAMIC for the invitation to a interesting convention.



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