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December 28, 2020

4 Predictions for Independent Agents

Summary:

Independent agents averaged a 38% drop in revenue due to COVID-19; 57% wish they had had better technology to assist them during the pandemic.

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To say that 2020 was a whirlwind would be an understatement. Our world was completely rocked by the impact of COVID-19, quarantine and adjusting to the reality of working remotely from home. And it wasn’t just people who were forced to adjust; businesses were also burdened with having to quickly change course, some with little direction and few resources.

Take independent agents (IAs) — we recently conducted a survey on the state of the independent agent landscape, and a resounding 60% of agents said that they were unprepared to move their businesses to a fully remote structure, which strained client relationships and led to struggles with retention. Agents reportedly saw an average 38% drop in revenue and sales due to COVID-19. In hindsight, 57% of IAs wish they had better technology to assist them and their businesses during the pandemic. The pandemic taught IAs quite a few hard-fought lessons, which they will need to keep in mind as they begin the work of recovering their businesses.

Here are my top four predictions for what will most help IAs with this process.  

1. 2021 will be the year independent agents take the lead on technology investment 

The time to invest in digital solutions is now — but independent agents themselves acknowledge that they tend to pivot slowly, with 91% agreeing that IAs have traditionally been slow to adopt new technology. The pandemic was a much-needed reality check for IAs. Three-quarters believe that technology investment will be crucial for them to remain a vital part of the insurance ecosystem. 73% of agents say that increased investment in digital solutions will help them attract new clients, while 80% believe it will help maintain and retain current relationships. Agents also believe that technology will inevitably make them more valuable to their carriers, with three-quarters saying that better technology would allow them to be stronger business partners. 59% agree that a continued focus on innovation will be crucial. 

2. While digital demands are here to stay, human touch points remain vital 

When it comes to increasing investment in technology, agents cannot simply think about themselves. Customers are also on the hunt for the newest and latest digital tools and solutions. In fact, 48% of agents say that providing customers with digital access to products and services is a key way for them to provide value. Nearly all (93%) said customer expectations are evolving. COVID-19 created a sense of urgency for IAs as consumers increasingly insisted on interacting exclusively online. Today, agents report an increase in customer expectations surrounding automated processes (76%) and digital tools (75%) — and agents are now 23% more likely to say they are looking out for digital solutions than they were before the pandemic. 

However, while digital demands will continue to rise in the post-COVID world, that does not negate the fact that customers still have an appetite for personal interaction with agents. In fact, 91% of agents say that they have seen an increase in their customers wanting to speak with them when they have questions, with seven in 10 saying they have seen an increase in customers wanting to meet in-person. Three-quarters of agents say that they have noticed a rise in their customers both valuing and following their advice. Customer expectations have forever changed, and IAs willing to implement a hybrid approach to addressing evolving consumer needs will be best set up for success. 

3. Adjacencies and affinity groups will be the go-to source for lead generation 

When it comes to generating sales leads, the tried-and-true method for agents has historically been word of mouth and referrals. While those are still vital channels, affinity groups can provide agents with thousands of prospects they might not have come across otherwise — and, when working to rebuild a business, you need all the customers you can get. 81% of our agents say affinity groups have been a strong driver of leads, with employers, financial institutions, real estate agents, car dealers and alumni associations being the top partners. The key is to partner with local affiliates of those trusted sources and have all of the modern tools required to serve a partner’s constituents in a seamless, omni-channel manner. 

See also: Of Independent Agents, Heirloom Tomatoes

4. More investment and support from carriers

Insurance companies have truly stepped up to the plate to support both agents and their customers. Insurers have provided customers low-driving discounts and payment flexibility throughout the pandemic. For agents, insurance companies have provided financial support, including advanced commissions and early contingency payments. Many increased investment in digital tools and solutions for agents, and we can expect to see this trend continue in 2021. The independent agent channel is crucial to carriers, and they will continue to invest in helping IAs modernize. 

Independent agents undoubtedly have some work to do as they begin to rebound from all COVID-19 has thrown at them, but the promise of coming back bigger and stronger is there. Business as usual is a thing of the past, and agents must be open to adopting new technologies into their business practices. The purchasing landscape is evolving — and those unwilling to adapt will be left in the dust.

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About the Author

Bill Suneson is the co-founder and CEO of Bindable, a national leader in digital insurance and alternative distribution technology. He also co-founded and serves on the board of Next Generation Insurance Group, which operates GradGuard.

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