How Independent Agents Can Use Insurtech to Stay Competitive

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A few years ago, a large sinkhole opened in a Florida neighborhood leading to the condemnation of three homes.

When the photos appeared in the newspaper, they were shocking. A cavernous hole in the ground had swallowed an entire home. A family huddled together across the street. And there was another person in the photo – turns out it was the family’s insurance agent.

Most independent insurance agents would agree that photo sums up the benefits a customer receives when selecting an independent agent for their insurance. They get relationship, expertise, and real, personal, tailored financial and insurance advice.

But are those things enough to keep an independent agent competitive in today’s growing digital marketplace?

Probably not, and smart independent agents aren’t taking the chance.

They are actively staying competitive by adopting digital technologies that help them become more efficient, increase sales and expand their services to clients.

Insurtech Helps Agents Compete with Direct to Consumer Companies

Historically large national and international companies that sell directly to the consumer have had some advantages over independent agents – they have large marketing and IT budgets that keep them on the frontier of the profession.

The most successful of them embraced new innovations early and used it to refine their underwriting, offer creative discounts and buoy their sales – think paperless discounts, claim reporting apps and “Snapshot.”  

But these days, the gifts of technology are available to the independent agent as well, allowing them to compete with direct writers. There are many creative ways independent agents can use digital mechanisms to compete with and replicate the success of those direct companies. Here are a couple:

  • Mobile distribution: Today’s technology allows independent agents to offer their clients a mobile application to manage their insurance – something vital in today’s world where communication, banking, and entertainment are all conducted through apps.
  • Online processing: Clients can view policy documents, ask for new quotes, file claims and make policy changes online or through an application.

Related: Want more cliens? Go Digital!

Creating Meaningful Cross-Selling Opportunities with Data

One of the most significant benefits of data management for insurance agents is the creation of cross-selling opportunities.

Research shows customer retention rates jump every time they purchase an additional line of insurance. That’s why cross-selling is such an integral part of customer loyalty.

According to a recent report by Customer Experience Matters, those who become your loyal customers are five times more likely to repurchase, four times more likely to refer their friends and seven times more likely to try a new offering.

Technologies assist agents by collecting data on users’ habits and needs. This information is funneled back to independent agents to help them recognize opportunities for cross-selling and upselling. The cross-selling opportunities for insurance clients are tremendous. This simple fact tell the story:

  • 61% of policyholders have only one policy with their agent. This data shows a great opportunity to optimize cross-selling and thus, increase customer loyalty.

Independent Agents Use Insurtech to Stand Out from Other Agents

Competition is fierce among independent agents, and insurance consumers are more likely than ever to shop around. Proactive independent agents that embrace the gifts of technology are more likely to win and retain customers. Customer retention is key to a profitable agency. From a cost analysis alone, it’s clear: It is seven to nine times more expensive to acquire a new customer than it is to retain one.

Agents that offer their customers digital solutions to manage their policies and communicate about their insurance are more likely to attract and retain clients. Providing near-instant answers, multiple communication channels and paperless technology is only the beginning.

Related: The Optimal Cross-selling strategy for Insurance Agents

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Delighting Your Existing Customers

Today’s insurance consumers expect expertise, concierge-style service and quick and easy business transactions. It isn’t enough to have satisfied customers, you must delight.

A revealing anecdote by AT&T illustrated this point directly. In a series of studies, they looked at customer satisfaction levels on a scale of 1-5 and traced it to customer retention. Here’s what they learned:

  • When customers reported a level 3 in satisfaction, 50% would leave within three years.
  • When satisfaction was rated a level 4, retention rose to 85% within three years.
  • When they rated it at a level 5, as excellent, 92% of customers remained after three years.

Improve Efficiency and Focus on Client Relationships

If you are still on the fence about adopting technology in your agency, processing is a great place to start. The proper use of Insurtech can automate many processing tasks such as retrieving and downloading documents, issuing and mailing policies and tracking renewals.

By automating these tasks, your staff has more time to focus on selling and creating superior customer experiences that can bring agencies many opportunities to improve clients’ retention and earn more referrals.

Facilitates Agency Innovation

Computing leads to process and procedure innovations that can benefit an agent by saving time, increasing productivity and client satisfaction.

Agents that offer their customers digital solutions to manage their policies and communicate about their insurance are more likely to attract and retain clients. Providing near-instant answers, multiple communication channels and paperless technology is only the beginning.

Collaboration Leads to Unique Opportunities for an Independent Agent

Both agents and insurance startups do well to work together. These relationships benefit independent agents by giving them fresh, cutting-edge insurance products for their clients. In turn, technology-based companies have the independent agent’s expertise on their side.

Lastly, consumers get the benefit of independent agent expertise and the best available insurance products. It’s a win-win-win.  

Embrace Insurtech Now

The time for independent agents to embrace Insurtech is now. Concerns that Insurtech will replace the trusted insurance advisor are far-reaching and inaccurate. Still, agents and risk managers that move their business into the digital world will outperform those that do not.

If you haven’t even dipped your toe in the digital pool, this is the time. Let us help grow your agency and delight your clients.

 

At Agentero we believe in the combination of technology and the trusted advisor. Our technology helps independent insurance agents uncover cross-selling opportunities and automate mundane back-office tasks to unlock the full potential of their agency. Use Agentero to grow your agency with happy customers.

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