Today’s insurance agency: More flexible, connected and profitable

We all know the insurance industry has had a reputation of being slow to modernize when it comes to embracing new technologies. Many independent agencies have been financially successful with their existing InsurTech, giving them little incentive to make changes or invest in new tools. And our industry has been very comfortable tor a really long time with an “if it ain’t broke, we don’t need to fix it” approach.

That changed in 2020. Many agencies had to abruptly pivot to remote business and implement new digital solutions practically overnight just to function. Technologies like web- and cloud-enabled agency management solutions, mobile apps, and electronic payments and signatures became table stakes to service clients.

The silver lining to this sudden change, however, is that as agencies have experienced the benefits of this change, their appetite and enthusiasm for adopting a more modern insurance experience — for both agents and the end-insured — has grown.

Now, agencies are firmly out of their traditional comfort zone in a very positive way. There’s more openness to change and more curiosity — even excitement — about how emerging solutions can help agencies not only survive today but thrive in the future.

What follows are the moves that independent agencies are making in 2021 (and beyond) to stay out in front of the pack.

Flexible working environments

Last year, it would have been difficult to find many independent insurance agencies that were embracing remote work on a consistent basis. But in a recent Vertafore survey of more than 1,000 agency employees, 7 out of 10 respondents reported transitioning to at least some form of working from home with the onset of COVID-19. A full 45% reported working from home at least 80% of the time.

And what surprised many was that working from home actually went… well. Fears of decreased productivity were unfounded. Employees quickly learned to juggle work and family life and proved their resilience, and agencies continued to service their clients’ needs. As a result, according to a recent opinion piece from the New York Times, “the infeasibility of remote work has been permanently undercut.”

Now that we that working from home is not only feasible but also profitable, in 2021 the insurance industry will continue to see shifting expectations for what can and cannot be done in the office, which can help the industry continue to thrive.

In the same survey, Vertafore asked insurance professionals about their ideal breakdown between working from home and going into the office. The vast majority of respondents — nearly 70% — want to work from home at least half of the time. Less than 15% want to return to the office full time even when the “new normal” becomes yesterday’s news.

In the future, we’re gong to see smart agencies reap the benefits of embracing a hybrid work environment. For one, recruiting and retaining young talent will improve as insurance meets the flexibility and tech-enabled workplace that younger generations expect. Agencies that consider remote workers will be able to access a greater pool of talent than their location-locked peers. These factors are essential as the insurance industry at large faces a “silver tsunami” in which much of the workforce is nearing retirement and low numbers of college graduates are looking at insurance as a profession.

Experimenting with new InsurTech

When it comes to their most essential tools, this year, we’ll see agencies continue to move away from in-house solutions to web- and cloud-enabled agency management systems. Not only do these systems allow for secure work away from the traditional office, but they also ensure employees have the most up-to-date versions and can access new automation and efficiency features as they are introduced.

But just as importantly, modern systems more readily integrate with new solutions, allowing agencies to stay on the cutting edge of InsuTech to modernize and grow their business. That includes solutions that use machine learning, artificial intelligence, and integrated analytics to improve processes and identity new business opportunities.

Over the past few years, InsurTech providers have delivered tools that can proactively predict which clients are at the highest risk of leaving, sift through vast pools of data to create coverage recommendations, automate personalized client communications, and more. These tools may not be quite a George Jetson version of the future, but they are harnessing some pretty advanced technology to make independent agencies of all sizes faster, smarter, and more nimble.

Now that agencies are more willing to break out of their technology comfort zone, we’re going to see wider trials and adoption of these cutting-edge solutions — not just by large organizations but also by small and midsized agencies.

Improved client (and agent) experience

The shutdowns of 2020 meant that people all over the world accelerated their expectations for digital, 24/7 tools for nearly every aspect of daily life. And it was more than just the shift to remote work. Suddenly, many parents were juggling work and homeschooling, work hours became inconsistent, and demand for online options for everyday activities — everything from grocery shopping to doctors’ appointments to business meetings — skyrocketed.

Things that were a “nice-to-have” in 2019 — e-signatures, finding information after hours, or conducting business online — became essential in 2020. The insurance industry wasn’t immune to this demand from consumers. Some tech-forward agencies that were already set up with a digital client experience seamlessly met the need while also being a trusted advisor in a time of great upheaval and uncertainty. Others quickly added solutions — or dealt with frustrated clients.

In the future, this trend is only going to accelerate. We’ll see wider adoption of technologies that make it easier for clients to do business with independent agents, including online document retrieval, instant quotes for both personal and commercial lines, e-signatures, and customer portals.

Agencies are coming to grips with the fact that consumer expectations have permanently shifted. And more importantly, agencies that had a client digital experience in place (or adopted one in 2020) realized that it allowed them to spend less time on transactional processes and more time building deeper client relationships and giving professional advice to their clients.

In short, the digital experience hasn’t killed the client phone call (or in-person meeting). It’s simply returned those personal touch points to what they should be: meaningful conversations versus rote business. And who isn’t for that as a permanent change?

There’s no going back

The truth is, the insurance industry wasn’t broken and didn’t need to be fixed prior to the pandemic — but it was a little bit bent. We were behind the trends of the modern world.

For better or worse, the pandemic forced our hand in 2020, and agencies are finding that this world of InsurTech isn’t all that scary after all. The most nimble and forward-looking agencies have learned this lesson and found the silver lining of what 2020 brought us. It’s all about furthering the momentum of this digital transformation because clients and employees have gotten a taste of what’s possible, and they aren’t willing to go back.

Article By: Rick Fox

Source:  Property Casualty 360