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January 18, 2016

4 Myths About Independent Agents

Summary:

Many, including agents, think digitization will replace them. Not so. Used right, technology enhances agents' relationships with clients.

Photo Courtesy of Duke Energy

While speaking at an insurance conference recently, I shared examples of how e-signatures are transformative because the technology now makes it possible to fully digitize the insurance sales and service process. “Imagine if tomorrow all your printers and filing cabinets disappeared,” I offered. Afterward, an agent approached me and said, “I don’t get what the big deal is with electronic signatures, anyway. My customers want to sit down with me and have me walk them through their policy.”

This isn’t the first time I have been challenged in this way. Evidently, some agents in the audience were left with the impression that digitization would replace personal service – an outdated fear among some seasoned insurance agents. This misconception often holds agents back from offering the best possible customer experience and become a roadblock to increasing their business.

Historically, the insurance business has been a personal one. Producers knew their customers well; knew their families, their businesses, their tolerance for risk. The entrance of direct writers onto the insurance scene has, indeed, removed some of that intimacy. But for independent agents, adding a modern, e-signing option to the buying experience doesn’t quash their personal touch.

Let’s debunk the four most common myths among independent agents:

Myth #1   Digital means “self-serve”

The goal of automation is not to remove human interaction; the goal is to provide a more efficient, error-free customer experience. E-signatures have been adopted across all channels in insurance, from remote call centers to face-to-face client meetings. Regardless of channel, we are still seeing customers continue to call advisers and meet with their agents; but at signature time, there is no printing, just an email invite with a link to e-sign.

Myth #2   Technology detracts from quality of service

Some agents believe that technology detracts from the quality, consultative and personalized service upon which they have built their business. The adoption of digital processes does not dilute the continuing value that independent agents provide; it simply modernizes the administration of paperwork. In fact, the time saved managing paperwork will be more time agents can spend offering specialized expertise. Trusted advice will continue to play an important role in the industry.

Myth #3   Consumers aren’t ready

This is simply not true. We track client preferences for e-signature automation across many mediated and unmediated channels. Mediated is when the client’s transaction is guided by a representative, offering the option for e-signature at the time of signing. Unmediated is when the consumer is online, in a self-serve situation.

In unmediated transactions, where e-signatures are offered 100% of the time, rather than being offered at the discretion of a sales agent, it is common to see adoption rates of more than 95% for e-signatures. Consumers are indeed ready and opting for the convenience and immediacy that e-signatures provide.

Myth #4   Digital signatures are risky

The fact is, electronic signatures are more secure than wet signatures. The identity of the signer – and the intent to sign – can both be authenticated and upheld in a court of law. Digitized audit trails of e-signing mean you not only get a log of document-level activity during the signing process, but everything the signer experiences during the signing ceremony can be captured, accessed and replayed as proof of signing.

Doing Digital Right

Independent agents who embrace digital upgrades to their processes will realize five key benefits:

  1. Improved customer experience: personalized yet modern nets better customer retention.
  2. Automated, expedited business process: requires less time to execute necessary paperwork.
  3. Efficiency: less time managing paperwork and fixing errors.
  4. Cost savings, by eliminating paper and having more time to spend with clients.
  5. Fewer errors, leading to less errors and omissions risk.

One of the most important benefits of modernizing business systems is the ability to attract clients. As generations shift, underinsured Millennials will open market opportunities. Progressive, independent agents will be viewed as service providers who have kept current with the times – yet still offer industry expertise with personalized attention.

“All business models must now rely heavily on digital tools; it’s what consumers want. What’s so exciting, however, is that consumers also hunger for a trusted adviser relationship with their insurance agent. Independent agents who marry the two will be big winners in the years ahead. That’s an opportunity direct writers can’t fully execute,” says Ron Berg, executive director, Agents Council for Technology.

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About the Author

Andrea Masterton is the corporate marketing director for e-SignLive by Vasco. She oversees industry marketing strategy, market awareness and demand generation within key industry segments, specifically insurance and financial services.

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