Independent Insurance Agents' Use of Key Digital Technologies Growing, Yet Significant Gaps Remain in Mobile Apps and Cybersecurity Preparedness, New Industry Survey Says

Agent's Want More Carrier Support Including Commercial Lines Download, e-Signature and Better Customer-Facing Solutions

Independent insurance agents have made important advances in awareness and use of digital technologies to improve the customer acquisition and service experience in the last two years, according to the Insurance Digital Revolution's second Insurance Digital Transformation Survey. Today the majority of agents, 95 percent, say that digital technologies are important or very important to their success, a substantial increase from the 58 percent who responded similarly in 2016.

The Insurance Digital Revolution, an industry initiative organized by IIABA's Agents Council for Technology (ACT), Associations & User Groups Information Exchange (AUGIE) and the PIA to drive adoption of digital technology, published the second installment of this survey to measure the industry's use of digital tools and compare changes in digital adoption over time. 

Agents are embracing the use of digital technologies to improve the customer experience. Historically, they have spent more time focusing on tools that improve internal workflow and less on customer-facing technologies. That is changing: 67 percent of agents offer e-signature today, which is up from 54 percent in 2016. Also agents have improved their quoting capabilities, with 41 percent of agents offering this function, double the percentage of respondents from 2016 (20%). Moreover, agents are increasing their use of web-based portals to allow customers to request policy changes, check policy information and payments, report claims, obtain insurance ID cards, and get insurance certificates. Thirty-nine percent of agents provide portals today, up from 23 percent in 2016.

"Insurance is a complex product and the majority of customers want a relationship with their insurance professional, helping them through the process and handling their unique needs. This is where independent agents still hold the advantage over other options, like insurtechs and direct writers. But agents can't stand still. they need to embrace digital tools that will enhance that relationship," said Mike Becker, CEO of PIA. "The results of the survey are encouraging. But there is still work to be done. Only a small percentage of agents are using on-demand service tools such as mobile apps, live chat and even 24x7 service. Tools like these can further enhance the agencies' customer acquisition and service capabilities to stay ahead of the competition."

Partnership between agents and carriers vital for digital tool adoption

The survey also showed that agents believe carriers can help increase adoption of digital tools. Overall, 55 percent of agents say there are more ways carriers can support their digital initiatives, including more download, especially commercial lines and commission statements, assist in training staff, and support for e-signature. There is also significant room for improvement in the tools carriers have developed for customers and agencies to use. Only four percent of agents said carriers' customer facing technology is excellent, while 49 percent rated the carrier technology average.

For agencies, the productivity benefits of some tools are only realized if most or all carriers offer them, such as claims download, and eDocs and Messages. Currently fewer than half of agencies use claims download (47%) and eDocs and Messages (35%). If more carriers offered these capabilities, the number of agencies could grow.

Cal Durland, CPCU, Director of AUGIE states, "Communication between carriers and agents is crucial. A number of carriers do not currently provide claims and eDocs and Messages download. This in addition to quality policy download provides the independent agency with more data and additional workflow efficiency. AUGIE continues to encourage agents to contact their carrier partners, ask them to offer this connectivity, and explain how this not only improves their agency's workflow and their collective client's experience, but also saves the carrier time and money."

Disconnect when it comes to cybersecurity

The increased use of digital tools leads to an increased risk of cyber security threats including hacking of information, or loss of data due to malware. But many agencies do not understand their risks and are not taking appropriate action to protect themselves.

More than half of agencies (62%) said they are concerned by cyber threats, but they do not have a good understanding about specifically what those cyber risks are, and what to do about them. Only 37 percent have a written security plan in place. In addition, only 37 percent hold cybersecurity training for employees at lease once a year. Less than a quarter (24%) perform annual penetration and vulnerability scans, and only seven percent test their staff's resistance to phishing campaigns and virus-laden emails.

Despite this lack of protection more than half of respondents (55%) rate their cybersecurity protection as either good or excellent.

Ron Berg, Executive Director of ACT stated, "While it is important that independent agents continue to adopt digital technologies, they need to be aware of and protect their businesses from the risks. In this day and age, becoming a victim of a cyber attack is a question of when, not if. When a situation occurs, having a cyber plan in place can minimize the impact. For many agencies the first line of defense should be your employees. With adequate training they can detect suspicious emails or risky downloads and stop them - closing one of the most common doors hackers use to infiltrate systems."

Candace Boyle