For all the negative connotations associated with the disruptive impact of technology, it’s hard to deny the positive outcomes as it’s transformed industries from travel and transportation to healthcare. Better-quality services. Lower costs. Improved efficiencies. Enhanced customer experiences and better satisfaction.
And so it goes for the insurance industry, including agents and agencies. Ready or not, technology is fast reshaping every facet of the business. For brokerages that intend to participate in fast-emerging opportunities, the future is now. It’s time to carpe diem.
Where high tech and high touch meet
Some of the most disruptive emerging technologies – like artificial intelligence and machine learning, and robotic process automation – are viewed with trepidation. Who hasn’t gotten frustrated by a chatbot “conversation” where the virtual assistant just didn’t understand the nuances?
But forward-thinking insurance agencies are increasingly using such advanced solutions to free them to provide the sort of high-touch human interactions that solidify client relationships and grow the business.
A World Economic Forum report predicts that the amount of work done by machines will jump to more than 50% by 2025. Brokers can take advantage of that trend by investing in technologies that make their processes more efficient.
This streamlining involves the kind of repetitive, manual work that is typically embedded in brokers’ processes and poses a big drain on their capacity to do sometimes basic yet significant functions. But the technology also extends to advisory services that are better-informed and much more valued, thanks to the insights provided by advanced analytic capabilities.
Top brokers’ advantage: an armory of advanced tech tools
Increasingly, leading insurance brokers understand the transformative power of high-tech tools that not only dramatically lower their costs but result in work product that is far more accurate and responsive to client needs – and expectations. These tools are having significant impact on three mission-critical service areas:
- Policy management and maintenance. This tends to be an unsung yet critical internal agency function. Until recent technological advances, it involved manual data management processes and was cumbersome, costly and time-consuming. Digitization, combined with AI and machine learning, has transformed the processes – ensuring the fast delivery of error-free policies that are contract-compliant.
- Risk placement. Clients want competitive prices and comprehensive coverage. Their brokers want to be able to share their clients’ risk success stories with the carriers likely to be most responsive to their pressure points. Automated agency management systems streamline the process of identifying and collecting their information – and efficiently gathering quotes and placing the coverage with the right insurer for the clients’ needs.
- Risk advisory services. This is the heart of the value proposition of the best insurance brokers. The big differentiator? How well they leverage data to gain insights and help their clients manage existing and emerging risks. Advanced capabilities – AI, machine learning and natural language processing – facilitate advanced analytic capabilities. Brokers that can leverage the technology are poised to anticipate client needs and advance the kind of personalized, consultative relationships that drive business success.
See also: ITL FOCUS: Agents & Brokers
New expectations in a fast-changing marketplace
Make no mistake. None of these advances is merely “nice to have.” They are must-haves for any brokerage that hopes to have an advantage in an increasingly competitive and fast-changing marketplace. Because technology is not just causing shifts in market segments, it’s also changing the nature of their competition. Face it: Clients expect their brokers to deploy the tools that will give them an advantage, too.
Consider how technology is reshaping their markets.
- Small business. These clients typically have fairly routine risks, making them easier to serve with digital insurance solutions. Insurtech firms have made substantial inroads in this segment with a variety of coverage options. With automated direct marketing to this group, insurers are cutting brokers out of the distribution pipeline. Touchless claims are another efficiency affecting small business commercial markets. Increasingly, it’s the high end of this market where opportunities lie, but, without tech-driven operational efficiencies, brokers will struggle to compete cost-effectively.
- The middle market. Surveys have shown that middle-market organizations have had significant concern over their viability during the economic changes since 2020. One found that economic uncertainty had pushed three-fourths of respondents to reassess their insurance needs. There is fertile ground for brokers who can use digitization to better understand and respond to this segment’s risks and use automated quotation and risk selection capabilities to better manage their costs. They will strengthen their foothold in this market.
- Large accounts. Larger accounts have bigger and more complex risks that require more of their brokers – and are accompanied by high customer expectations that they will be up to the challenge. It’s technology that will enable brokers to deliver at every level. Start with the efficiencies and prospective savings that automated quotation and renewal pose. But digitized processes also can reveal areas where coverage could be improved or new products might be valued – better serving clients while adding to the agency’s revenue opportunities. Another opportunity with this market lies in claims automation, especially the prospect of the AI-driven touchless claim that improves the efficiency and accuracy of claims management.
How effectively brokers harness the transformative power of technology will be a critical factor deciding winners and losers in the marketplace in the days ahead. Those who are still testing the waters are well-advised to jump in with enthusiasm lest they get overtaken by nimbler players.
See also: Technology Cannot Replace Brokers