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News & Commentary

02:17 PM
Bruce Winterburn, Vertafore
Bruce Winterburn, Vertafore

Long Live the Insurance Agent: 4 Reasons the Channel is Still Vital

Trends in serving the 21st-century insurance customers actually give independent agents an edge.

Why would a consumer go through an agent when they could go direct? That question is at the heart of the argument posed by those pundits, critical of the future of the Independent Agent distribution channel. To me the answer is clear, the consultative nature of the relationship and choice. With big budgets to spend on advertising to attract customers and the IT to provide an exceptional customer experience, it's no surprise direct writers have often had a competitive edge over independent agents.

However, given the rise of social, mobile, cloud and data (business intelligence) or what Gartner describes as the "Nexus of Forces," a paradigm shift is happening in the business of insurance. Many of the advantages once held by direct writers are now being eroded by empowered independents agents, who with the help of technology are more nimble and savvy than ever before. Gone are the days where these technologies are out of their reach.

In fact, as the consumerization of technology spans across verticals, we'll continue to see that insurance technology used by agents is reflective of and fully integrated with those also used by consumers.

Social Media as a Targeted Approach to Customer Acquisition and Retention

The sense of community has long been at the heart of the agents' value proposition. Today the definition of community has vastly expanded. As we can all attest, life is increasingly spent with our heads down, focused on whatever is on our mobile device or computer screen. Capitalizing on that "heads down" approach, many independent insurance agencies are now tapping into the power of social media to interact with and engage existing and prospective customers. For example, instead of a traditional email or banner advertisement, insurance agencies can now execute targeted campaigns over Facebook to both their local and virtual communities. Or, how about when a storm or natural disaster is on the horizon? An agency can alert their customers about the event and the best way to reach their local agent for help. The power to reach niche audiences is unprecedented as social channels like Facebook and Twitter focus their attention on developing marketing/advertising platforms for smaller players like the independent agent community.

Mobility is More Than Being On-the-Go

Mobility is another game-changing technology that has, in my opinion, not only helped independent agents reach par with directs, but has also given them the advantage. As consumers, we may (or may not) know that data caching and cookies normally play a major role in our digital lives--our search history and preferences are stored for us as we search and shop across our devices. We're so accustomed to having access to data, when we want it and in a truly personalized way that we now expect that in our business interactions as well.

By placing client and insurance information at the fingertips of the local independent agent, there is an enhanced level of service that was not possible just a few years ago. On the back-office side of mobility, agency principals and producers who are on the move are now able to check in on their business, customers and performance, making real-time changes or decisions on their smartphone.

Turning Data into Insights

Big data as a buzz phrase has popped up everywhere over the last few years. While many have their own interpretations of what it means for their organization, it is clear the reality and nature of the insurance industry rely heavily on data. Agents today need granular levels of knowledge and real-time analytic tools to investigate specific events, emerging trends and what-if-scenarios.

With various reporting tools and insurance-specific search engines now at their disposal, the independent agent is now equip to make informed decisions, monitor their work flow, manage their benefits and carrier connectivity to ultimately service their clients better.

Using these reporting tools also means that agency front and back office solutions are working as one, making independent agents true " knowledge workers" - helping to provide the experience consumers demand.

Cloud Technology

While the concept of cloud computing isn't new, advancements in technology over the past decade have made it a much more viable and powerful alternative for businesses. In fact, according to Forrester Research's annual report on worldwide IT spending, cloud computing tools and software-as-a-service options, will see greater IT investment in 2014 as firms move away from legacy applications, including desktop and local server technology.

For the independent agencies the benefits are plentiful. Cloud computing gives them the agility to meet customers on their terms and share information quickly and easily without interference from outside sources. Data can be accessed during any situation--including the occasional disaster--allowing agencies to focus on their customers' needs 24/7. With increasing adoption of cloud services, we're also seeing dramatic increases in cost saving, which can be as much as 40% for companies that transition from dedicated IT services to a private cloud.

With the thoughtful application of these emerging technologies, forward thinking independent agents are finding themselves to be more valued and relevant than ever. If you ask, "Why go through an independent agent?", I say "why wouldn't you", given the modern convenience, knowledge and value they provide in today's high-tech marketplace. Long live the independent agent!

About the author: Bruce Winterburn is VP of Industry Relations for Vertafore, a provider of insurance software and agency management systems.

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