During finals week in college, friends liked asking what I still had to do before the end of the term. I was such a procrastinator that I always had way more papers to write and tests to start studying for than they did, so they'd walk away feeling better about their situation.

My conversation with Gabriela Dominguez, president of Avante-Nea Insurance Group in Miami, for this month's interview brought finals weeks back to mind because of her vivid descriptions of the difficulties facing agencies in South Florida these days. Agents from just about any other part of the country will feel better about their plights after reading what Gaby is going through. 

For instance, she talked about a tattoo parlor she's writing at the moment, saying, "The carrier that writes that most effectively, efficiently and competitively, if you submit an account to them you've got to wait between 20 and 30 days to get a quote.... How can you wait 20 to 30 days to get a quote?" 

With Citizens, the homeowners insurance lender of last resort in Florida, she said they'll lock in an effective date for a policy but will take 20 to 25 days to look at the submission. "Then, she added, "they come back and say, 'Oh, by the way, you got everything in, but you're missing this. You've got five days to give it to me or you lose your spot and start all over again.'"

And even when a major carrier renews a client, the price soars—she's about to have to tell a restaurant that last year's $15,000 premium is now $29,000.

I draw two primary lessons from the interview. First, as much as carriers talk about making life easier for agents, they have a long way to go, at least in chaotic markets like Florida, and have a big opportunity if they get the coordination right. Second, there are benefits to consolidation to achieve scale, as Gaby describes at the outset of the interview, based on her recent experience with a merger. 

But even if you're not looking for lessons, I think you'll find her interview a compelling read—and it might even make you feel better about the chaos waiting on your own desk​.

Cheers,

Paul  

SOCIAL SELLING FOR INSURANCE AGENTS

Paul Carroll

A study just came out showing that mergers and acquisitions of agencies and brokerages, while down a bit in 2023, still registered one of the biggest years on record. You undertook a merger a couple of years ago. How does that trend look from where you sit?

Gaby Dominguez 

In our case, we were a small enough agency that we were getting constrained with appointments, restrictions, not meeting the quotas, not meeting the loss ratios. Joining with another agent and now having a much bigger book of business means I have more opportunities for appointments.

So, yes, a lot of agents at the size I was before are going to be constrained as to what they can and can't do if they don’t merge. In fact, you're going to probably even lose appointments because you're not able to meet the requirements that some of these carriers are putting on us.

Paul Carroll

For frame of reference, how big were you before and how big are you now?

Gaby Dominguez 

I was at $20 million in premium and $2 million in revenue. We're now at $7.5 million in revenue.

Paul Carroll

I assume dealing with carriers is especially difficult, as well as important, in Florida.

Gaby Dominguez 

In South Florida, our market is so, so difficult right now. Most of our book of business is written through excess and surplus instead of admitted carriers, so having those connections available is key. 

When I merged, I was able to acquire admitted carriers such as The Hartford and Chubb. I was not going to get those appointments on my own. Now that we’re a bigger agency, we have better contracts, better commission structures, better contingency contracts.

Paul Carroll

You were slammed last week because of some big renewals. Those have to be rough these days, especially in Florida.

Gaby Dominguez 

It's horrible.

Markets right now are non-renewing, removing the wind… and you’re getting a quote to present to the client maybe five days before the renewal day. Sometimes, it’s just two days before, especially on larger accounts.

It's just a mess. When you think about the number of accounts that we have to renew monthly, then multiply that by all the agencies in South Florida, it’s hard to get any time with carriers.

You're basically in a pipeline. If you call enough, if you're in front of them, if they like you, maybe they'll put you up in their stack so they can review the account. But you're basically bleeding. 

I've got an account that I'm writing right now, which is a tattoo parlor that also does cosmetic tattoos and medical tattoos, so it's a little bit more extensive. The carrier that writes that most effectively, efficiently and competitively, if you submit an account to them you've got to wait between 20 and 30 days to get a quote.

That's unheard of. How can you wait 20 to 30 days to get a quote? How far ahead do you have to present an account to a carrier to get a quote you can present to a client?

With Citizens [the property insurer of last resort in Florida], you upload all the information: the application, the appraisal, all the supporting documents, which is a huge amount, often including a 40-year recertification. Who was even talking about 40-year recertifications just four years ago? Now that is a must when you submit an application--room certifications, electrical certifications, wind mitigation…. Once you’ve uploaded all that information, you sit there and wait.

They secure your effective date. Let's say the coverage is effective next Monday. But they won’t review the application until they have time. And that can be 20 to 25 days. Then they come back and say, “Oh, by the way, you got everything in, but you're missing this. You've got five days to give it to me or you lose your spot and start all over again.”

There’s no communication with underwriting even with excess and surplus carriers, and nobody will answer a phone these days. I cannot put everything in an email sometimes, so it’s important to be able to pick up the phone and say, “Hey, Paul, can I just talk to you about this account? I get that you're seeing this and this, but look, there's this and this and this, and that other thing has gone away.” The reaction is: Put it in an email.

Paul Carroll

Are the insurance reforms in Florida having any noticeable effect yet?

Gaby Dominguez 

Losses are still being reported. We still have attorneys on the radio saying, “Don't report a claim to the insurance company. You come to me first.”

Carriers are saying the new legislation has made a difference. The number of claims has declined.

But it’s too soon to know. For sure, we have not seen a reduction in premiums. I’m working with a restaurant right now that last year paid $15,000 in premium, with wind. Normal restaurant, nothing big. A major carrier just renewed it: $29,000. Same sales, but nearly twice the premium, and I have to sit with this client and tell them that. 

The Department of Insurance says several carriers are very interested in writing and are preparing to come aboard. Maybe by the end of this year, we'll see three to five carriers coming into play. 

But I've been in this business long enough that I go back to Hurricane Andrew in 1992, which is when all this mess started. Carriers came in afterward and took business out of Citizens, but then another storm brewed, and those carriers went under, so the business went back to Citizens. It’s been a revolving door ever since. So I’m a bit skeptical. Are carriers coming in with the reserves they need? Do they have the management they need to be effective?

Paul Carroll

One of the things we've really focused on at The Institutes is the idea of Predict & Prevent—get away from this model where all you do is repair and replace after the storm hits, and help keep people from having losses in the first place. But is there much you can do to help clients prepare for what forecasts are saying will be a rough year for Atlantic hurricanes? I mean, the storms are going to hit your area, or they aren’t, right?

Gaby Dominguez 

The last 24 months, the number one conversation we’ve had with our clients is, “How old is your roof?” If your roof has a life expectancy of less than five years, you have to change it. Again, that’s not a conversation we were having five or six years ago. 

But people sometimes cannot afford a roof replacement. Here, a normal roof can easily cost between $30,000 and $40,000. It's not what it used to be. Ten years ago, the cost was maybe $12,000 or $15,000.

We also ask, “How old is your water heater? Have you had any electrical and plumbing updates?” If your water heater is more than 14 or 15 years old and you haven’t updated your plumbing and electrical—especially on older homes, and we have a lot of older homes here—then carriers are not going to quote you. So you have to go to the excess and surplus market.

Paul Carroll

I’ve hoped that insurance premiums would send strong enough signals that policyholders would make their homes more resilient. It sounds like that may be happening.

Gaby Dominquez

People are doing it. It's either that or lose your coverage, and if you have a mortgage, the force-placed insurance is three times more than the quote that I'm going to give you, which is already expensive. 

The state is providing assistance through different programs that help people replace the roof, get a new AC, install impact windows and so on.

Paul Carroll 

Are there enough plumbers, electricians and contractors to do all this work?

Gaby Dominguez 

It's a struggle. Every single day, I hear: “Do you know somebody who's reputable?” 

There's just so much work that needs to be done. And that's not only on residential. I do a lot of condominium associations. Right now, I'm battling on a condo whose 40-year recertification failed. The tab to replace the roof, change the electrical—because the electrical is no good—and do some plumbing work is over $500,000. So they have had to go to a bank and request a loan for half a million dollars. Now they’re on a timeline: This week we're doing this, the next two weeks we're doing that, this is where the progress on the roof is. And I have to report to the carrier every two weeks what the insured has or has not done. That is just draining.

Paul Carroll 

Holy smokes. 

Gaby Dominguez 

When an agent-friend of mine from California and I are at agent/broker meetings, we're the two who tell everybody else, “You guys have it fine.”

Paul Carroll

Thanks, Gaby. I really enjoyed the conversation. Here’s hoping conditions start getting at least a bit easier.

About Gaby Dominguez 

Gaby joined the second-generation family-owned business – Avante Insurance Agency – after obtaining her property and casualty license in 1986. She became president of Avante in 2010 and merged with NEA Insurance Group in 2022, where she also serves as leader of the highly successful personal lines team for over 20 employees, who are mostly women. Gaby has numerous professional achievements in her 38-year insurance career including – 1) Chartered Property & Casualty Underwriter CPCU designation showcasing all facets of the insurance business; 2) numerous positions in CPCU Society (local chapter president; regional governor-Southeast; diversity and nominating committees; and chair of the Agent Brokers Interest Group, a position she occupies currently); 3) past president and council president of the Latin American Association of Insurance Agencies; and 4) member of the depopulation and technical advisory committees of Citizens Property & Casualty Insurance, the largest insurer in Florida.

As much effort as carriers have put into digital transformation over the last decade, new research shows that there’s still considerable work to do. According to the J.D. Power 2024 U.S. Property Claims Satisfaction Study, today’s insurance consumers are dissatisfied with how long it takes carriers to process and resolve property and casualty (P&C) claims. And the longer a claim drags on, the deeper the dissatisfaction. Claims resolution times were longer in 2023 compared to 2022, mainly due to the myriad of catastrophic weather events from coast to coast. The study notes a significant drop-off in customer satisfaction levels if the claim takes over three weeks to resolve.

 Even carriers that offer digital interfaces for clients are seeing lower satisfaction rates. From the J.D. Power study:

“Customers who use digital tools for reporting their claim or submitting photos used in the estimation process experience faster claim cycle times but don’t always have higher levels of overall satisfaction. Claims taking longer than expected are partially to blame as satisfaction drops at a greater pace among digital users than non-digital users. For example, overall satisfaction among customers reporting their claim digitally is 903 when the claim is settled in less than three weeks. That score falls to just 727 after 31 days.”

What is driving insurance customers' dissatisfaction regarding digital channels? Carriers can face a few common challenges when building their digital channel engagement strategies. For example, some insurance carriers only offer a limited number of customer service channels. They may focus solely on traditional channels like phone and email, neglecting newer channels like live chat, social media, SMS, or messaging apps. This limits customer choice and may not align with the preferences of younger generations who prefer digital or self-service communication channels.

Addressing these gaps in the customer experience requires a comprehensive omnichannel strategy that prioritizes the seamless integration of all the channels, messaging consistency, agent responsiveness, personalization, and a focus on customer preferences across all channels.

Omnichannel Engagement Creates Happier Customers

A 2023 study commissioned by my company, in collaboration with independent data scientists, analyzed behavioral data from 250,000 P&C insureds. The study revealed that a consistent, diversified omnichannel experience creates higher levels of engagement and customer satisfaction. Policyholders who utilize multiple channels are 21% less likely to cancel their policies, and customers who repeatedly use them have a 25% higher retention rate.

An omnichannel strategy can significantly enhance insurance customer satisfaction in several ways:

1. Meeting Your Customers Wherever They Are: Carriers need to make it effortless for insureds to interact with them. Customers who can interact with the insurance company through various channels of their choice are more loyal. This requires carriers to enable a seamless transition between channels to ensure customers can access services without disruptions, leading to higher satisfaction. Depending on the situation, your customers may want to leverage digital channels for quick questions, or they may need to speak with a customer service professional for more complex needs.  
2. Getting More Personal: By leveraging data collected from multiple touchpoints, insurers can personalize customer interactions. That can include offering relevant new products, providing tailored recommendations, and addressing specific needs, ultimately making customers feel valued and understood.
3. Providing Convenient Self-Service: An omnichannel approach must include a self-service customer portal. The right portal enables customers to complete tasks and access information quickly and easily without the need to speak with an agent. Portals are also highly effective at reducing carriers' costs.
4. Maintaining Messaging Consistency: Consistency across channels is crucial for maintaining trust and satisfaction. With an omnichannel strategy, insurers can ensure that the information provided and the level of service offered remain consistent regardless of the channel used. This consistency builds confidence in the company and enhances the overall customer experience.
5. Achieving Operational Efficiency: During the claims process, customers want to feel that they’re a priority. Omnichannel strategies streamline processes and workflows, allowing insurers to resolve customer issues faster and more effectively. For instance, customer inquiries can automatically be routed to the appropriate department or agent, reducing wait times and improving resolution times. 
6. More Reliable, Real-Time Communication: Customers unhappy with claims resolution times may feel they’re not getting enough communication and updates from their carrier. Effective communication is critical to keeping insureds satisfied. That can mean different things to different customers. For example, some customers will appreciate a text message updating them on the status of a claim, while others prefer to receive an email with more detailed instructions on next steps. An omnichannel strategy enables carriers to communicate with customers more frequently, in real-time, providing updates, notifications, and reminders through their preferred channels. This proactive approach to communication keeps customers informed and engaged throughout their journey.

Carriers who take the time to build an integrated omnichannel engagement strategy can improve customer satisfaction by providing a seamless, personalized, and convenient experience. The main goal is to build loyalty with customers who appreciate the ease of use of each channel. That requires consistency across the full mix of digital and offline channels. Regardless of the engagement channel, carriers must move through the claims process promptly and efficiently, facilitating effective communication at each journey step. Doing so will demonstrate to your customer that their needs come first, even if a claim is complex and takes longer than expected to resolve. 

Sponsored by: ITL Partner: insured.io

In the realm of digital transactions, challenges often surface, stemming from a variety of sources ranging from user errors to glitches within the payment systems themselves. The State of Online Payments report sheds light on the prevalence of these hurdles, revealing that a staggering 60% of respondents regularly grapple with issues concerning their monthly digital payments. The data also reveals the respondent’s ideal way to resolve payment issues.

Among the myriad obstacles cited, frequent occurrences include the forgetfulness of usernames and/or passwords, the absence of timely payment reminders, and frustrating delays in the processing of payments. These findings underscore the pressing need for streamlined, user-friendly solutions to mitigate these challenges and enhance the overall efficiency of online payment experiences.

In our quest to better understand how customers navigate these inevitable obstacles, we sought insights into their preferred avenues for resolving billing and payment-related problems. Through our survey, respondents were posed with the question: “What’s your preferred way to connect with customer service teams for billing and payment-related issues?” The results unveiled clear trends, with the top responses indicating a preference for direct communication channels.

How Do Customer Prefer to Resolve Payment Issues?

Specifically, survey respondents favored contacting the biller’s office via phone call, engaging in live chat interactions with customer service representatives, or opting to address the matter in-person at the biller’s physical location. These preferences shed light on the significance of accessible and efficient customer service solutions to address the daily concerns of digital payment users.

Customers facing these problems want them fixed quickly, so they can finish their payment and move on with their day. Naturally, they seek assistance from customer support teams to address their concerns, but this can exacerbate call volumes and even lead to heightened lobby traffic for billing organizations. This surge in inquiries is not only time-consuming, but can divert staff’s attention away from critical projects and potentially lead to employee burnout.

In order to avoid this, we’re highlighting several strategies billing organizations can implement to streamline issue resolution.

1. Leveraging Technology for Self-Service Options

The most impactful way to drive results for billers is to increase the volume of customers that are willing to self-serve, which they can do by enrolling in services like automatic payments (AutoPay), paperless billing, and even by signing up for payment reminders. Increased self-service means fewer customer service calls, reduced walk-in and lobby traffic, decreased staff workloads, fewer account shutoffs or cancellations — in short, increased self-service enrollment means fewer headaches for you and your team.

Offering an enhanced interactive voice response solution (IVR) is a simple way to provide that convenient, contactless customer experience your payers expect while also diverting customer service calls, improving operational efficiencies, and increasing your revenue flow. IVRs are ideal for providing 24/7 access to bill payment over the phone.

Online portals for digital payments are another great form of self-service. Allowing customers to pay when and how they want and on the device of their choice can not only decrease call volumes but can significantly increase customer satisfaction. Also, offering omni-channel options is crucial. Providing more options can lead to higher adoption rates — however, regardless of how many options you offer, the user experience should remain the same across all channels. Customers should have the same effortless experience making via phone that they have on the web, too.

Chatbots in EBPP, when used properly and in line with the law, can also help people pay their bills faster and with less hassle. Many common billing problems have simple solutions that chatbots, powered by AI, can explain easily. With the right keywords, chatbots can understand a biller’s problem, even if the biller isn’t sure themselves. In these cases, AI-powered chatbots can solve mundane problems quickly, saving time and resources so staff can focus on higher-value work.

Overall, these technologies can address common customer queries in a way that saves time for customer service teams and simplifies the process enough to eliminate typical issues, such as difficulty finding where to pay.

2. Implementing Effective Communication Strategies

Merely establishing communication channels with customers is insufficient. Understanding their preferences and payment history is crucial. Clear and accurate billing statements are essential to prevent issues and confusion.

Payment notifications play a pivotal role, identified as the second most significant problem by our survey respondents. Intelligent communications capitalize on existing customer information to deliver targeted reminders and notifications. For example, sending a payment reminder to someone who has already settled their bill is redundant. Likewise, a single email about an upcoming bill might not suffice to counter the “I forgot” excuse for late payments, especially if it’s lacking a link to payment, the amount due, or other details.

Employing various communication channels, such as email and SMS, based on customer preferences, is essential. Proactive communication, including FAQs and user guides, is also vital to preempt common inquiries.

3. Training and Empowering Customer Service Staff

Finally, investing in the training and empowerment of customer service staff yields multifaceted benefits. Well-trained teams not only possess the skills to efficiently address customer inquiries but also play a pivotal role in minimizing call volume through their adept problem-solving abilities. Moreover, empowering employees by granting them the autonomy to make decisions fosters a sense of ownership and accountability, directly influencing customer satisfaction levels.

When frontline staff feel empowered to resolve issues promptly and effectively, customers are more likely to receive satisfactory resolutions on the first contact, leading to a significant reduction in unnecessary calls and ultimately enhancing overall service quality.

Ready to learn more? For more insights into customer payment habits and billing preferences, download the most recent State of Online Payments report here.

Sponsored by ITL Partner: InvoiceCloud

Originally Posted By InvoiceCloud

Apple's ability to excite customers about technological change is legendary... but the company erred badly with a recent ad for its new iPad Pro. And if Apple can totally misjudge how people will react to change, then so can you and I. 

I worry, in particular, about how the insurance industry will manage all the changes that are becoming possible with generative AI and that will need to be rolled out throughout companies over the next many years. While executives sing its praises and talk about how much drudgery it can remove from jobs, how much more efficient it can make people and so on, I'm not sure they're fully factoring in the fears that many employees harbor and the organizational changes that will need to occur.

I have thoughts.

So we're all on the same page, here is a link to the Apple ad. And here is a link to an article about Apple's quick apology.

You can see what Apple was trying to do. It wanted to show that a whole array of creative tools — books, musical instruments, a record player, paint and much more — had been combined into a single, sleek iPad. Apple was even being its usual cheeky self by invoking a popular meme, in which people put cans of paint or fruit or just about anything into a metal crusher and then film and share what they look like when they explode.

What Apple somehow missed is that many of the items being crushed are totemic. People love their books, their pianos, their record players. People don't want to see those crushed, even in the name of sleek technological progress. You can't just sell the notion that a technology is cool and assume everyone will climb onboard.

Many people like their jobs, too — even the less efficient parts. They've done the job the same way for a long time, and they're in no hurry to change. Change takes effort and is disruptive mentally. 

A rule of thumb among venture capitalists is that a new product needs to be 10 times better than what a startup is trying to replace, or don't bother. That number doesn't need to be as high with employees because, after all, the employer is paying their salaries. But there still needs to be a clear advantage, or the employee will resist the change, and the employee has to be wooed, not just ordered around.

I've always been a bit of a curmudgeon about change management programs — banners and leaflets and rah-rah meetings aren't my thing — but I thought two senior consultants at Heidrick & Struggles whom I helped with a book eight years ago were quite perceptive on the topic, so I'll share some highlights here. (If you want to investigate further, these points all come from Chapter 11 in "Accelerating Performance.")

Colin Price and Sharon Toye, who have both moved on from Heidrick & Struggles, opened the chapter by emphasizing the need for speed. "When transformations don't work," they write, "the biggest reason is that bold new ideas weren't institutionalized rapidly enough." They then get to the five steps they recommend for an organization trying to make the sorts of changes that generative AI will allow... and demand:

"First, leaders need to connect with their people through a common and compelling purpose. Next, leaders must align the operating model of the organization to reinforce the behavior change. Third, capabilities must be built. There is no point in asking people to do things differently if they don't have the skills to do so. Fourth, the changes must be role-modeled by leaders. We all know that following the parental mantra of do as I say not as I do will ruin any chance of colleagues doing what senior leaders asked of them, although it is surprising how many senior players still try to get away with this manner of leading. Fifth, but by no means last is the need to provide space for people to explore the change being asked of them and to choose whether to adopt it."

While that last point is the one that surprised me the most and has stuck with me — that you need to give people space to come to terms with the desired change and to decide to either go along or to leave the organization — let's go through the five points in order:

—Common and compelling purpose:  Price and Toye write that successful change programs "communicate the why first." And it seems to me that there are lots of powerful whys in insurance for innovation, in general, and generative AI, in particular. Those whys include serving customers faster, more effectively and more humanely in their hour of need; helping them reduce the risks they face with their lives, homes, autos and other assets; and making the insurer more efficient, allowing for lower premiums and a narrowing of the production gap. 

Whatever the why, it needs to be compelling to the employee and needs to be consistent, because the next step is to communicate it relentlessly. Price and Toye write that "change agents typically under communicate their vision by at least a factor of 10." Peter Drucker, the legendary management consultant and author, once told me in an interview that General Electric's longtime CEO Jack Welch would pick one goal for the company and communicate it at every opportunity for five years. Then he'd pick a new goal and pound on that for five years.

Price and Toye said managers also need to allow time for dialogue with employees about what's changing to encourage co-creation rather than just defining and imposing change from on high. "Lasting change occurs through insight, not instruction," they write.

—Operating model: There may be structural changes needed. Changes in processes will certainly have to occur. And there will need to be metrics and rewards. 

That's pretty standard stuff, but care will certainly need to be taken on all three of those points. I can imagine metrics being especially tricky because some of the improvements allowed by generative AI are pretty squishy. 

—Capabilities: What they say here is also pretty standard: Make sure you have all the capabilities you need, match them to the right opportunities and either find or train people to fill gaps as quickly as possible.

I think insurers already do a pretty good job of matching a submission with the right underwriter and a claim with the right representative, but I imagine training will have to be different with generative AI. Training can't be one-and-done because the capabilities of the technology are improving so fast. Training will have to be continual.

—Role modeling: The authors stress the need for clear articulation of what you want your employees to do differently — "You can't expect your people to be mind readers." Then, they say, leaders have to model the new behavior. If you want your people to be gung-ho about generative AI, then you'd better let them see you using it personally. 

—Space: As I said, this is the bit of advice I found most surprising. Every company whose change programs I ever wrote about were clearly thinking of them as top-down, but Price and Toye note, "People have the freedom to choose to not engage, and they exercise that freedom only too often" because of fear of the unknown and the potential for loss. 

Their recommendation: "Change management, like training, has traditionally been seen as a push model and needs to become a pull model, where employees draw what they need rather than having it imposed on them.... If you enable them to experiment with what the change could look like, feel like and be like, then their level of comfort with a new reality is more likely to rise. And if you allow them to choose to change, then they are more likely to adopt change with greater conviction and energy than if you don't." 

What if people choose not to change? Then they've chosen to part ways with you, Price and Toye write, and you need to be disciplined about moving them out as quickly as possible. That may feel odd at a time when the insurance industry is focused on its talent gap, but they argue that you lose more by having lots of people who aren't invested in the changes you need to implement.

Price and Toye certainly weren't writing about generative AI. It didn't exist eight years ago. But I think their ideas are still worth keeping in mind as we implement that technology, in particular, and continue to innovate, in general. 

If even Apple can't count on getting people to jump to a cool new technology, what chance do the rest of us have?

Cheers,

Paul

The differentiator for independent insurance agents has always been the quality of the customer service they provide to their clients. Unfortunately, in today's challenging market, that focus on clients can fall to the wayside.

The standard of customer service varies from agency to agency and, in some cases, from agent to agent. Those making strides to improve their customers’ experiences are more successful than those who simply say: “This is how we’ve done it for 50 years; this is how my father did it,; and this is how we're going to continue do it.”

So what does superior customer service from insurance agents look like today? What trends have forced changes upon agents in terms of customer service, and what best practices can they follow to set up their agencies for success? 

See also: Customer Segmentation Is Key

External Factors Affecting Customer Service Norms 

Digital transformation 

Technology has transformed how agents and clients communicate. Younger insurance buyers have different expectations than prior generations. They expect self-service, for example, paying bills and filing claims online. Older generations, however, might eschew some claims automation tools while believing they understand the products available and do not need assistance.

These generational differences can create huge opportunities for agents to play more of a consultant role when it comes to advising clients on their risks as well as introducing more tailored insurance products. For example, agents can position themselves as educators, introducing and explaining new products and services, such as usage-based insurance. Some clients in a usage-based insurance model will resist having their vehicle report driver data while others will appreciate the ability to lower their premiums. As a result, agents have an opportunity to map out the pros and cons of the usage-based model and position themselves as valued advisers rather than simply selling. 

Agents must also recognize that the differing needs and preferences of insureds extend beyond product offerings and can even include how they want to communicate. Some want to be emailed, while others prefer a phone call and still others are more comfortable with text messaging. Although these forms of communication may feel less personal, they can actually be more engaging and help insureds to understand, in many cases, what they do not know they don’t know.

Artificial intelligence (AI)

AI is one of the latest and most important tools for customer service. AI can also intimidate some agents. We need to understand that AI does not have to replace agents. Rather, it should support and enhance the customer experience process and the agent/insured relationship. Agents should not fight AI; they should embrace it. Take advantage of chatbots, virtual assistants, self-service portals and mobile apps as much as possible. Agents can also work with their carrier partners and investigate what technology they have available. Not only will doing so help their client relationships, adopting these tools will make agents more competitive.

The reputation of the insurance industry

Relationship building remains paramount, so understanding your client base is critical. Insurance is a product clients know they need but do not want to purchase. It is a product used mostly when the client has a loss and needs to make their business or personal financial circumstances whole. In fact, clients do not even know whether the policy will work as intended until they file a claim and speak with their insurer. 

In part, this is why the insurance industry has earned a negative reputation through the years. It may be that agents did not ask enough questions of their clients during the buying process to understand the client’s needs and insure the property and its contents to value. Agents likely did not spend the time necessary getting to know their clients. In a situation like this, a claim can lead to an unfortunate experience for the policyholder. And in today’s litigious environment, unhappy clients are more likely to file a lawsuit.

See also: Customer Success Is Key, but Where to Start?

The Keys to Better Customer Service

Agents can overcome the industry’s reputation as well as challenges introduced by digital transformation and AI to achieve superior customer services by using the digital tools available and by spending more time understanding their client’s situation. Specifically, agents should confirm how the customer wants to interact with the agent, managing customer service from the beginning by asking the following questions: 

• How often does the client want to communicate with the agent?
• What renewal increase with the client accept before the agent decides to market the account to other carriers? 
• When does the client not want to hear from the agent?
•  How comfortable are they with certain technologies? 

If agents are not truly spending the time to understand the coverage issues their clients face as well as how they like to communicate, then agents may not be able to give their clients the best advice and customer service. 

Despite the direct-to-consumer trends prevalent in the marketplace, clients still want an insurance agent they can call who will understand them and provide personalized guidance. Technology must be part of the formula for superior customer service, but it can’t be the only component. Customer service, built on relationships and in-person as well as virtual interactions, will be key to the future of the independent agent.

In a not-so-distant future, where the boundary between humans and technological innovation blurs, imagine that you’re sweating through your daily workout at the local gym. It’s 7:30 a.m., you’ve been running for 30 minutes, weight lifting still ahead, and when you slow down to check the time, you get a notification on your phone: 

“Great workout! That’s four in a row! Your health premium has been marginally reduced to 
{insert number} …” 

Seems like a stretch? Maybe. But I’d argue that it’s not — and that it would be a good thing.

A key driver that has consistently shaped the U.K. market over the past three years is the integration of AI cloud data. Businesses across a variety of industries are exploring how AI can drastically enhance their offerings, and one sector that stands out prominently in this transformation is insurance.

While we navigate the rapid integration of AI into our lives, few of us grasp the degree to which it will interlace seamlessly with the intricacies of insurance. It’s not crazy to think that there will come a day — even soon — when insurance firms leverage AI to adjust the cost of premiums in real time, turning each commitment to a healthier lifestyle into a currency of lowered premiums.

The dawn of pay-as-you-live insurance

The integration of AI, coupled with the abundance of data from internet of things (IoT) devices and wearables, is already creating a dynamic and personalized insurance experience.

Looking forward, your insurance premium could soon easily be determined minute by minute based on data from your health tracker, smart home devices and even your car. This transformative emerging approach to insurance is rooted in the concept of pay-as-you-live, where individuals have incentives to adopt healthier and safer lifestyles.

In this scenario, your health tracker would communicate with your insurance company, verifying that you are engaging in physical activities. Consequently, your premium would decrease. Similarly, wearable tech in cars and smart homes combined with AI could contribute to a comprehensive understanding of your behaviors, creating a live feedback loop that could significantly affect your insurance costs. 

Here are a few more concrete examples that illustrate how AI could soon integrate into insurance:

See also: 5 Ways Generative AI Will Transform Claims

1. Driving behavior and telematics

In auto insurance, AI-driven telematics will soon play more of a pivotal role. Imagine a policyholder with a smart device installed in their car that monitors driving habits, including speed, adherence to traffic rules and even the choice of routes. While there are already apps out there from insurance companies that track how you drive for periods to ultimately adjust your premium or rate, with AI algorithms this would happen in real time. If a driver were to consistently demonstrate safe and responsible behavior, their insurance premium would be lowered. Conversely, poor driving habits could result in a higher premium. This approach would not only encourage safer driving but also establish a direct correlation between individual behavior and insurance costs (though I suspect most people won't be thrilled).

2. Smart homes and theft prevention

The integration of AI with smart home devices will likely also transform insurance into a guardian of property. For instance, if an individual's smart home security system detected unauthorized access or a potential break-in, the AI could instantly notify the insurance provider. In the event of a burglary despite the security measures, the insurance payout process could be expedited through AI-assisted claims processing. This live interaction between smart home devices and insurance systems would not only protect the insured property but also streamline the insurance experience.

What all this really boils down to is that integrating AI into insurance technology would allow for continuous risk assessment. As people go about their daily lives, algorithms would analyze data from wearables, smart devices and other sources to determine the level of risk associated with various activities. If someone is mitigating risks, perhaps by choosing safer routes or maintaining a secure home environment, the AI would adjust their insurance premium accordingly.

See also: Can AI Solve Underlying Data Problems?

Balancing “Big Brother” concerns with positive outcomes

While the idea of constant monitoring will undoubtedly raise concerns for some about privacy and a "Big Brother" presence, others might agree that the net societal benefits cannot be ignored. The data collected through AI tracking would enable insurers to identify accident hotspots, encouraging individuals to take safer routes and drive responsibly. This would not only enhance road safety but would also create a healthier and safer society.

Moreover, this data-driven approach extends to the concept of “vitality insurance,” wherein policyholders who are contributing to their well-being are rewarded with lower premiums. As health becomes a vital building block in determining insurance costs, people will surely be motivated to adopt healthier habits, creating a positive feedback loop that could benefit policyholders and keep them motivated toward a safer lifestyle.

The cannabis sector is poised for powerful growth as more U.S. states line up to green-light the popular plant.

According to Hub International's "What to Expect In 2024” cannabis outlook report, medical marijuana is now legal in 20 states and in the District of Columbia, while recreational cannabis is eligible for sale in 23 states along with D.C. Retail cannabis sales are expected to increase to $54 billion by 2027, Hub International reported.

Yet the buzz wears off somewhat given the business risks associated with growing and marketing cannabis in 2024.

“Losses related to catastrophic events such as fires, particularly those caused by a failure of High Intensity Discharge (HID) lighting systems used to grow crops, or theft of expensive cannabis products like cannabis oil, present further challenges to profitability,” the report noted. “And a rapidly spreading plant pathogen called HLVd could cost cannabis growers billions of dollars in coming years.”

See also: Is 2024 the Year of Digital Health?

Risk, Legislation and Lack of Industry Knowledge Vex Insurers

What do cannabis companies and industry insurers need to do to curb business risks and create insurance policies for all market participants?

“The current state of cannabis business insurance is quite restricted, with limited insurers willing to participate due to the high-risk perception and regulatory complexities,” says John Crist, founder of Prestizia Insurance.

Cannabis businesses, particularly cultivators and retail stores, often struggle with obtaining adequate coverage. That’s partly by design, as insurers weigh the risks of offering coverage in such a nascent marketplace.

“Best practices for these businesses include maintaining stringent compliance with state regulations and demonstrating a thorough risk management strategy,” Crist says. “For instance, a cannabis retail client in New York had to implement extensive security and inventory tracking systems to meet insurance requirements, underscoring the meticulous level of compliance needed.”

Another New York-related issue is that a New York state bill requiring medical cannabis to be covered by insurance plans could significantly affect the market, potentially leading to more widespread insurance adoption and possibly more insurers entering the market.

What other big issues are facing insurers contemplating initiating or expanding cannabis insurance coverage? Here’s a closer look:

Lack of sector knowledge

“One of the biggest challenges for new agents is the ability to learn and understand the business and marketplace,” says C.L. Mike Schmidt, an attorney with Schmidt & Clark, whose specialties include cannabis law. “The cannabis insurance sector is relatively small on the excess and surplus side, with well-known, established agents, brokers and underwriters. Therefore, selling oneself as a professional who understands the nuances is vital to breaking in.”

Need to know the “ins and outs” 

“It’s much more than your standard, typical excess and surplus (E&S) risk,” Schmidt says. “There are a lot of ins and outs that an agent should attempt to learn to be well-equipped to serve their clients. When it comes to underwriting the risk, agents must comprehend that most policies are written on proprietary endorsements, so knowing the ins and outs of each carrier’s form is critical.”

Under-the -radar risks

“The cannabis industry is a unique one to navigate in insurance as carriers must accommodate unique risks,” Schmidt says. “It shares common business risks with the consumer packaged goods market, overlaps with some pharmaceutical risks and has some wholly individual challenges like federal prohibition.”

“High-risk activities such as cultivation facilities housing thousands of dollars’ worth of products, transportation companies facing the open road while loaded with products and dispensaries moving large amounts of cash daily are not limited to a few smaller businesses — they spread across the industry,” he says. 

The “Schedule 1” issue 

“As of now, cannabis remains a Schedule I drug at the federal level in the U.S., which significantly impacts its legal status and the operational dynamics of businesses within the industry,” says Amber Benka, an agent at California Insurance Co. “The classification means it’s considered not accepted for medical use and has a potential for abuse, complicating banking, taxation and interstate commerce.”

The U.S. Food and Drug Administration (FDA) has recommended reclassifying cannabis as a Schedule III substance.

“This reclassification could potentially reshape the industry’s regulatory framework, impacting financial reporting and taxation,” Schmidt says. “However, this is still under consideration, and the final decision is made by the U.S. Drug Enforcement Administration (DEA).”

Local government policies 

The insurance marketplace remains active, but it may be difficult to obtain insurance within the limits required by leases or local governments.

“For example, some cities want dispensaries to have $2 million in general liability coverage, but carriers are only willing to offer $1 million,” says Chantel M. Roberts, a former claims adjuster who handled marijuana claims and fonder at CMR Consulting.

The departments of insurance (regulatory) have mandated insurers provide insurance if cannabis is legal in the state. But “the federal government, which controls banking, sees taking premium dollars as possible laundering of money-- so many insurers are still hesitant to enter into the marketplace,” Roberts says.

See also: New Workers' Comp Laws for 2024

The Takeaway on Cannabis Insurance Risk in 2024

Overall, the cannabis industry, while growing, faces significant operational and regulatory hurdles that directly affect insurance practices and availability.

“The development of more supportive legislation, like the New York medical cannabis bill, may encourage broader coverage and more insurers to enter the market, gradually normalizing business practices for cannabis companies,” Benka says.

Additionally, the introduction of legislation like the New York bill requiring medical cannabis to be covered by insurance plans is a significant step toward normalizing cannabis use in medical treatments and integrating it within the standard insurance frameworks.

“However, this also sets a new precedent that could complicate claims and underwriting processes due to the unique nature of cannabis-related liabilities,” Crist says. “As an insurance provider, we've had to recalibrate our offerings and reevaluate risk assessments to adapt to these emerging legislative changes, ensuring that both businesses and consumers are adequately protected under these new frameworks.” 

Samuel Green, CEO at Blue Insurance, says, “Things are slowly improving. More carriers are getting involved. But there's a long way to go.”

Hosting a podcast has been a fantastic way to meet people from around the world and help share their stories and advice. I’ve learned a lot. Running a successful podcast series requires commitment, but we are not the only show in town.

So as we hit the release of 300 episodes for the InsTech Talks podcast series, I’ve pushed the microphone to one side for a moment to reflect on nine other insurance-flavored podcasts you may want to sample, along with mine.

Be warned, this is rather a self-serving list – every one of these podcasts’ hosts has been generous enough to invite myself or one of my InsTech colleagues Robin Merttens or Henry Gale onto at least one episode. I’ve linked to that episode as your starting point. But we do have standards. This is not just a puff piece for us.  Each of these podcasts is worthy of following in their own right.

You should be able to find all of these on your preferred podcast channel, such as Apple or Spotify – or follow the links.

#1 InsTech Talk

Episode 287 January news: $73 million funding, ships, war and thunderstorms

Our very own podcast. We’re usually interviewing a founder or insurance leader, but we are now testing out a new format co-hosted with Nigel Walsh, global leader of Google Cloud. Each month, we’re breaking from our usual interview format to review the news items grabbing our attention in a rather more freeform style. For this episode here, we are joined by Martha Notaras (Brewer Lane Ventures) and Charlotte Halkett (Milliman) with a guest appearance by Amrit Santhirasenan (hyperexponential), who brings a glimmer of hope to all those depressed by recent insurtech funding rounds. If you like this, you’ll find the first news episode we did at 277 with Nigel,  James Birch (Brit Insurance) and Bijal Patel (Aurora). Next one coming soon, but in the meantime we’ve a fantastic back catalogue of CII accredited episodes to listen to.

#2 Voice of Insurance

Episode 151 – Parametric: where traditional insurers fear to tread

Mark Geoghegan draws on his experience and network from his days as a broker and journalist as he delves into the serious side of insurance. Many of Mark’s guests are leading figures from major brokers and insurers. Robin and I were honored to be in one of Mark’s earliest podcasts in the series. More recently, Henry Gale and I returned to talk about parametric insurance in 2022. Still a great primer for those wondering what parametric is all about.

#3 Making Risk Flow

Season 3 Episode 4 What everyone is talking about in insurance

Juan de Castro is COO and host for the Cytora podcast. This episode explores what major insurance companies and industry figures are doing to help underwriters spend more time at what they do best – underwriting. Juan previously worked at McKinsey and Hiscox, so he brings a practical and focused approach to his discussions. In this episode from February 2023, Juan and I discuss the current trends in insurtech. I returned again later that year to the Making Risk Flow podcast in October 2023 as host of the panel from our live InsTech event when we explored whether the future of underwriting had arrived.

#4 The Reinsurance Podcast

Episode 27 InsTech, Industry Challenges & Innovation

Robin Merttens was interviewed and filmed by the founders of Supercede and hosts of the Reinsurance Podcast, Jerad Leigh and Ben Rose. Both Jerad and Ben were brokers in prior lives, and the podcast is a successful side-hustle to their daytime job of building an insurtech company. As technology marches slowly forward, face-to-face relationships are essential in broking, and many parts of insurance. Settle down with InsTech’s chairman in the heart of London and find out what was on his mind that day.

#5 FNO: InsureTech

Episode 250: CEO of InsTech – Matthew Grant

Another popular podcast pair, Rob Beller and Lee Boyd bring some California and Texas sunshine to your day. With real jobs at U.S. claims administrator Alacrity, the podcast provides them with a way to talk to a wide reach of insurance folk well beyond claims. Usually operating remotely out of the U.S., for this episode Rob and Lee joined me in our InsTech recording studio in London during a recent trip. We discussed the origins of insurtech and talked about why Lloyd’s exists and why it’s so important to the U.S. market, particularly for the risks that insurers cannot or do not want to write. If you like your predictions for the year ahead, scroll back a few episodes to when Martha Notaras was their guest.

#6 Unstructured Unlocked

Episode 37 Christopher Wells, Indico Data, Michelle Gouveia, Sandbox Insurtech Ventures, and Henry Gale InsTech

Henry Gale stepped aside from his research and newsletter editing to talk to Indico data about generative AI. Henry runs our regular newsletter on that topic so he had plenty to talk about.  The insurance industry still has a big problem with extracting and using data efficiently, and Indico has dedicated an entire podcast series to support businesses looking to solve that problem. We’re delighted to be working with Indico Data, and Robin Merttens speaks to CEO Tom Wilde on our own InsTech podcast episode 292.

#7 The future of insurance Podcast

Season 1 Episode 19 Robin Merttens & Matthew Grant, InsTech London

Bryan Falchuk wrote the book on insurtech, literally. If podcasts are not your thing, then any one of these is worth a read. Bryan has worked as an insurtech founder, claims executive at a U.S. insurer and now is CEO of the Property & Liability Resource Bureau (PLRB). Step back in time three years ago to discover what we thought would happen in insurtech then – did we get it right? – or fast forward to today with a more recent episode as Bryan keeps up the pace with his thoughtful interviews from the U.S.

#8 The first 100

Episode 125 How founders acquired their first 100 customers, with Matthew Grant, a partner at Instech

Hadi Radwan takes time off each week from his day job building businesses to discover how other entrepreneurs found their first 100 clients. Hadi is a citizen of the world travelling between the U.S., Middle East and the U.K., and his guests reflect his global view and come from beyond insurance. We’ve had over 300 companies working with us at InsTech, and if you are wondering how we found them, join Radi and I to learn more.

#9 Corelogic conversations

Episode 84 Some Insurers Banned AI — Will Insurtech Bring It Back?

I was delighted to spend 30 minutes talking to one of my earliest employers, catastrophe modelling company EQECAT, now part of Corelogic, for this episode in February of this year. My former colleague, host of the company’s in-house podcast, Maiclaire Bolton Smith was intrigued about what is really going on in generative AI with insurers.

#10 RPC: Insurance Covered

August 2021 A look at embedded insurance (a podcast with Robin Merttens)

RPC is a law firm with a successful side line in writing articles and recording podcasts. Embedded insurance is one the topics we’ve been talking about for a few years now – and it’s one bright hope of insurtech that has stood the test of time well. This podcast was released alongside our report “To embed or not to embed?” Travel back in time to this episode to find out what Robin had learned and what he thought would come next.

That’s enough for now. Please let me know what you think about these or any of our episodes. We are always on the lookout for new guests for the InsTech podcasts, but due to demand we usually limit that to companies that are also members. You can find out how to become a member here, browse our full catalogue of podcasts or sign up to our newsletter so you don’t miss future episodes, events, reports and more.