Author:  ACT News Staff

Independent agencies that best understand and use insurance technology may ride the wave of success that insuretech companies are generating.  A new McKinsey study indicates that 61% of insuretechs aim to enable the insurance value chain—for example, Insurify, which seeks to match agencies with prospective customers.  True, 39% seek to replace insurers entirely (9% do this) or become the intermediary (30%), but they are relying on technology models that are also generally available to agencies across the board.  These technology models include more accurate pricing algorithms, speedier quoting software and better underwriting evaluations—all of which benefit agencies seeking more efficient ways to quote and bind quality business. 

While much of the software and data analytics being developed work to reduce claims and produce better underwriting, insurance agencies are not being left out of the metrics mania: 

• Comparative raters are focused on improving to provide more consistent workflows with better results.
  
• Data that support segmentation of current and prospective clients is becoming more granular.
  
• Programs that identify cross-sell opportunities are being 'baked' into agency management systems.
  
• Marketing analytics are richly served by big data.
  
• Even the risk management aspects of agency value-added services are aided by insuretech developments.
  

And while many opportunities to earn fees for service are arising, agencies may also be able to find lower premiums for clients as insuretech—either through competition with insurers or provision of efficiencies—drives policy pricing lower.  Insights provided by insurance technology firms may make it easier to place good business and more difficult to place mediocre and more poorly rated accounts.  This means insurance agents will have to get smarter about the clients they attract and serve up to carriers.  On the up side, agents will have an easier time defining for clients why their premiums and available coverages are what they are.  The most tuned-in agents will even be able to give clients their odds with carriers before submitting a proposal, if they desire.  And this is on top of the emerging market-demand analytics now being offered by some agency management systems and vendors.

While the traditional model of insurance sales relied heavily on carriers—their pricing, their claims, their consumer responsiveness and accessibility—the new model based on insurance technology opens the door for agents to provide far greater value in the search for quality coverage, risk management and loss control, all of which factor heavily into retention.  Who can imagine a negative response from a client who gets a call from an agent saying, "When it's time for you to renew, I've found a policy for you that has better coverage and will save you money."?   Technology that gives clients ease of access to their own accounts and general agency information promises to boost agency relevance, as well.

From Sign-On Once to e-signatures to all the bells and whistles now being offered through agency management systems, smart agencies don't have to fear the rising insuretechs—as long as they ride the wave instead of getting drowned out.

Additional resource: 

How Will Voice Computing Impact You and Your Business?