At this year’s InsureTech Connect Conference I took part in an interesting event called Agency Connect. While much of the rest of the ITC conference is concerned with topics and issues relevant to the carrier and direct-to-consumer audiences, the idea behind this session was to give the agency and broker community a forum to discuss and learn from one another about how the same challenges seen in the wider insurance industry will specifically affect the agency channel. Topics ranged from the increasing rate of digitization, to evolving policyholder expectations, to the emergence of new product segments.
Beyond the traditional agency value proposition
In this fast-moving insurance environment—evolving in response to technological, regulatory and market changes— the traditional agency is redefining itself. It used to be that an agency’s value proposition to its clients was clear: they were brokers between carriers and customers, mostly acting as a sales agent to facilitate transactions.
In the new insurance landscape, the client needs less support in fulfilling a transaction. They can easily go online and find product information and carrier ratings. And, as carriers become more digital they are automating the admin operations required to complete the transaction, resulting in less paperwork and manual application processing. Agents and consumers are looking for higher value help from agencies—who are now searching for new value propositions.
Redefining the agency value proposition
An interesting take on what that new value proposition might look like came from Bold Penguin, an exchange for agents and carriers in P & C. They specialize in advising agents on selecting the right carrier for a particular coverage, especially in very complex commercial lines.
That’s the type of value-add agencies can look to deliver as they evolve away from facilitating transactions and towards a consulting model. The life business may be slightly less complex than commercial lines, but it still requires an understanding of what is best for a client when it comes to things like disability, critical illness, life, retirement, education-savings needs. And an agent must be able to understand the particulars of the coverage that are different from carrier to carrier in order to best advise their client.
Innovation in the agency channel
During the session a panel of agency managers discussed innovation in the agency channel—with some interesting highlights. Robotics Process Automation (RPA) is a hot topic in the industry these days—it holds the promise of being able to automate manual steps in tasks and workflows, increasing the speed of a process and its accuracy, while reducing costs.
For agencies burdened with high operational costs due to a proliferation of manual processes the attraction is obvious. Being able to increase efficiency and accelerate service and sales workflows is a win-win for everyone involved—carriers, agencies, agents and consumers.
Forward-thinking agencies are also seeking to apply machine learning algorithms to their data to evaluate client needs and identify trends. This business intelligence can predict a clients’ likelihood of buying and even what they might purchase, enabling a company to segment their client base and create offerings that precisely match the needs of the client.
Business drives technology not the other way around
No matter what technology agencies implement one of the key questions from the session was, “How do you use technology and innovation to become more effective?” The answer is that the common denominator in all successful transformations is to first clearly identify the problems you’re trying to solve—before you choose a technology.
This resonated strongly with me because at Equisoft our slogan is “Business-driven innovation.” We believe that the business should lead transformation—identifying the critical challenges that the organization faces and strategies for meeting them. Only then can the right technological solution be sourced and implemented. Otherwise, companies find themselves in a compromised situation where business units must adapt themselves to an already-implemented tech solution in order to meet their needs.
Equisoft envisions a future in which technology works in support of the business needs of all the stakeholders in the industry to meet our collective goal—helping clients reach their financial goals. It was interesting and heartening to hear this important message directly from a leader directly involved agency innovation.
To continue the conversation about future of our industry, the role of technology and best way to embark on the transformation journey feel free to contact me.
Chief Product Officer