4 Things Insurers Need to Know About Agents of the Future
The independent agency channel has been a reliable insurer revenue stream for years. However, the world of the independent agent is changing rapidly and dramatically. To keep this a profitable distribution channel, insurers need to adapt.
Changing Agency Model
1
Agency Channel Health
2
The Agent of the Future
3
What Insurers Can Do
4
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More than 25% of employees in the insurance industry are over the age of 55 and poised to retire in the next 10 years. Combined with the fact that younger generations consider insurance a stodgy industry and have different workplace expectations and working styles, baby boomer principles are perplexed about how to manage a very different generation.
Aging Workforce
New channels and competitors have emerged to take advantage of the online market. The growing use of online, in not only personal auto, but also increasingly in small commercial and workers compensation, is creating competitive pressures for agents.
Digital Disintermediation & New Entrants
Buyers have changed. They have more insurance literacy than ever before, and expect transparency and control over the buying process. Consumers expect a faster, easier digital experience, along with 24/7 access to information, agents and insurers.
Why the Traditional Agency Model Is Changing
Is the independent agency channel doomed?
Evolving Customer Expectations
Not at all. There is a clear need for a professional advisor who can help policyholders understand exposures, choose appropriate products and reduce risks. However, to differentiate themselves based on service, independent agents are evolving to manage the inevitable transition to a digital world.
Expect to see technology playing a growing role in the way agents conduct business, including internal process automation, data prefill, market finders, document imaging, portal to agency management system connectivity, and new technologies for interacting more effectively with consumers.
New Uses of Technology
Expect to see agents expand service delivery beyond live staff and outside of 9-5 office hours. To appeal to the online customer, agents will continue to invest in direct-to- consumer self-service capabilities; use artificial intelligence to provide personalized service and help determine the “next best action” to take.
New Ways to Deliver Service
Expect to see blended models: independent agencies placing business with direct writers; an increase in online channels; and more cooperation across channels with agencies partnering to find markets and provide tailored services.
New Agency Models
What Will the Agent of the Future Look Like?
What Insurers Can Do Today to Help the Agent of Tomorrow
There is a clear recognition that independent agencies continue to play a critical role in the value chain of insurance. Therefore, improving the effectiveness of this channel is top of mind for most insurers today. As agents wrestle with the burning strategic issues looming over them, insurers can help with this transition by using the agent experience framework:
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Aging Workforce:
Digital Disintermediation & New Entrants:
Evolving Customer Expectations:
Is the Independent Agency Channel Doomed?
There is a clear need for a professional advisor who can help policyholders understand exposures, choose appropriate products, and reduce risks. However, to differentiate themselves based on service, independent agents are evolving to manage the inevitable transition to a digital world.
Not at all.
New Uses of Technology:
Expect to see agents expand service delivery beyond live staff and outside of 9-5 office hours. To appeal to the online customer, agents will continue to invest in direct-to-consumer self-service capabilities; use artificial intelligence to provide personalized service and help determine the “next best action” to take.
New Ways to Deliver Service:
New Agency Models:
There is a clear recognition that independent agencies continue to play a critical role in the value chain of insurance.
Therefore, improving the effectiveness of this channel is top of mind for most insurers today. As agents wrestle with the burning strategic issues looming over them, insurers can help with this transition by using the agent experience framework:
