Digital Technology and Independent Insurance Agents: The Benefits Are Too Great to Ignore
By: Mike Becker, Executive Vice President & CEO of National Association of Professional Insurance Agents (PIA)
Digital tools have become such a significant part of our lives - from shopping, to hailing a cab, to managing our banking accounts, we rely on our smart phones, our tablets and our computers to get around. E-commerce may have set the expectation, but the prevalence of digital technologies is having an impact on all industries. And it's clear that insurance can't be left behind.
That's the idea behind The Insurance Digital Revolution (IDR), an industry initiative organized by PIA, the Agents Council for Technology (ACT) and the Associations & User Groups Information Exchange (AUGIE). As an industry, we conducted the Insurance Digital Transformation Survey to take a deep look at agents' use of digital tools. Our goals were both to understand where agents are today, and where they need to go to stay competitive.
The results are encouraging, but they clearly demonstrate where we need to move faster. The survey showed that independent insurance agents don't have to be convinced that digital technologies are vital to growing their businesses, but they're still not where they need to be in terms of technology adoption. It's not a problem of believing: independent agents are embracing digital technology - 70 percent have proactive strategies in place to implement new digital tools. Agents still need a lot of guidance in their efforts. In some cases, they are unclear about where to begin and what to do next when it comes to technology.
But there are definite signs of progress. PIA has observed first-hand that our member independent agents were early adopters of social media, embracing it with a passion since its inception. The survey confirms our observations; many agents are currently connecting with customers on Facebook (78%) and LinkedIn (68%). They also use social media tools to generate new business, with nearly three-quarters of agents saying they're getting new business leads from the web and social media regularly.
However, there's also an opportunity for agents to use newer technologies to improve customer service. Only 43 percent of agents operate 24/7 using staff, automation, or a combination of both, while fewer than one-quarter of agents have client portals (23%) or mobile apps (21%). Less than half of independent agents are using text messages, social networks, instant messaging and e-newsletters. And surprisingly, only eight percent of respondents rated their websites as excellent, and 60 percent of agents said their sites are average to poor. In fact, 73 percent of agents cannot quote auto or home insurance from their websites.
What can we take from the survey results? For agents, knowledge is power but only if it is followed by action. Incorporating digital tools can enhance the agents' business by improving customer satisfaction, growing business and increasing profitability. The survey shows that agents are generally aware that digital tools and automation are vital. That awareness is beginning to include the recognition that agents need to identify emerging trends and position themselves to deliver what their customers want, not just today but in five or ten years. Agents need to start taking the steps to implement the tools that clients expect.
In addition to meeting customers' digital requirements, agencies must also look at improving their workflow with automation. Overall, 40 percent of agents say that disjointed workflows are the biggest automation challenge. There is significant opportunity to improve efficiencies in the processing the claims, quoting of new business and making policy changes.
But what is needed most is a sense of urgency. Adoption is not something agents can afford to keep putting off. This topic must be kept top-of-mind for every independent insurance agent, in order to grow their business and compete in the market. The benefits are too great to ignore.