Use Insurtech to Help, not Replace, Agents

Agents need to go beyond knowing details and trends and be able to ask clients the right questions. AI and chatbots are poor substitutes.

Even Popeye needs some help from spinach. In this post, I look at the importance of the insurance agent and some insurtech startups providing tech spinach to the Popeye agent. I started out my career in this industry as a financial adviser. Being a financial adviser was always my fallback plan if my entrepreneurial ventures did not work out (which, in my late teens/early twenties, they didn’t). My father has been a financial adviser since I was about two years old. I have always been around the business, from interning for him, meeting various clients of his and even getting to attend some top producer trips. So, maybe I am biased about how I see the future of the agent, which in my definition is an agent, financial adviser, broker or any other intermediary selling insurance face-to-face. But, as the headline indicates, I do feel that insurtech is going to make agents stronger, rather than displace them. Winnie the Pooh needs to weigh in I got some food for thought at a recent Plug and Play event focused on digital solutions that can help to strengthen the broker and agent proposition. The panel comprised Jason Storah, executive VP of Aviva Canada; Chip Bacciocco, CEO of; Kim Opheim, president of Opheim Consulting; and Aaron Schiff, founder & CEO of Matic Insurance. The panel was moderated by Richard Cagney, managing director of KBW. It was a diverse panel with varying views, which led to a exuberant discussion. See also: Insurtech: An Adventure or a Quest?   In terms of the Winnie-the-Pooh analogy I've used, none of the panelists fully fit into the Tigger, Eeyore or Pooh buckets, as, at times, they each shared views that could be categorized into different ones. I label the three characters this way:
  • Tigger is the excitable cat, full of enthusiasm for every new technology, which will surely change the world for the better and do it right now. Tigger could be a direct-to-consumer digital insurance carrier.
  • Eeyore is the old grey donkey who thinks it is all rubbish, that all this change will only end badly or won’t happen at all. Eeyore could be an insurance carrier with an established agency force and no D2C capabilities.
  • Winnie-the-Pooh is a humble “bear of little brain” who somehow gets to the right answer by asking good questions. We all want to be that insightful bear, but in the tech world the market is the only judge of what works or does not work. Winnie-the-Pooh is asking – what is the right thing for the industry and customer?
A quick personal story My first role overseas was working on a project team where we set up an insurance carrier in Poland. My role was to set up the target operating model of the agency force for our Polish business, which included everything from recruitment of agents to the sales process with customers. I was nervous because, up until that time, I had only been a financial adviser and wholesaler and was not sure if I could deliver. I had the following conversation with my former boss a few weeks after joining the project (he was running the project and is a qualified actuary by trade): Me: "I know nothing about back-office operations, actuarial/product pricing, how to set up a branch. How am I supposed to define the requirements of what the agents need when I have never actually worked in these areas?" Boss (with a smile): "You have quoted and sold policies to customers, right? You’ve spoken to them about how the underwriting works and then worked with operations people to make sure the policy issued correctly, correct? You’ve walked a customer through a policy document, helped with a claim, dealt with multiple servicing issues and back office people on their behalf, right?" Me: "Yes." Boss: "Then you know a lot more than most of the people you are going to be working with on this project…as a lot of them have only seen one area of the business, whereas sales people have to interact with all areas of the business. I will always say, the sales person is one of the smartest people in the whole company and typically will make more money than most of the CEOs, too!" In our next meeting, in which every workstream lead was present (product, operations, actuarial, etc), my boss stood up in front of everyone and said, "This business will only succeed if the agent is successful. The agent is the heart of this business and will drive our growth. As such, we need to put all of our efforts in place to support the agent in our business model, which also means giving Stephen the support he needs to be able to build the best operating model he can for our success in Poland." (Thanks, ML, for giving me the confidence in those days. FJ, you, too.) Some start-ups enabling rather than replacing the agent There were many startups that presented at the Plug and Play event, some of which focused on enabling the agent/broker, including: Wellthie – Wellthie is an insurance marketplace and sales optimization platform for brokers and carriers to help with the end-to-end sales process to small businesses. The platform offers live quoting from top medical and ancillary carriers nationwide, contribution modeling, customized proposals, an integrated CRM and more. Hello ZUM - Hello ZUM is a startup out of Latin America that aims to "organize the world’s insurance information in one click." The management team is made up of veteran insurance industry professionals. Their solution is a SaaS platform that was born out of looking at two areas: 1) the different roles in the insurance industry and how they will evolve in a new digital environment and 2) how they interact with each other and exchange information. Hello ZUM helps to provide all the different stakeholders within the insurance ecosystem with consistent information, which helps make operations and distributors more efficient and ultimately provide a better customer experience, while generating significant cost reduction. Client Desk – Client Desk is a Canada-based software startup focused on giving tools to brokers and carriers, focusing on engagement, self-servicing and claims management. They provide a white-labeled policyholder web portal and mobile app, as well as a management dashboard used internally by brokers and agents. HazardHub – HazardHub has two goals: (1) to create the best geographic hazard data available and (2) make it free for every person in the U.S. to see the risks around their property. This can help individuals and their brokers to identify the specific risks that may be around their property. You can try it for free here and sign up for the API here, which will give you as many as 10 inquiries a day for free! For carriers and brokers that want to incorporate HazardHub data into their quoting and rating routines, HazardHub offers a novel pay-on-the-bind approach to pricing. acuteIQ – acuteIQ is an AI platform that helps brokers and agents with customer acquisition and prospecting by searching a database of 21 million small/medium-sized businesses. Summary A few weeks ago, I wrote about my experience of buying health insurance this year. After doing all my research online, I also spent time talking to two different agents. I was amazed at the information that they shared with me that I couldn’t find online; which included information on the evolution of ACA and how it’s affected their business and their clients' experience with different carriers, as well as many other general tips on what I should be looking at for my own insurance needs as a repatriated entrepreneur. I was reminded about how the role of the agent is much more than only selling and servicing, but about knowing continuing trends, regulations and being able to ask the right questions to individuals to determine what the most appropriate route is to go with the advice they want to provide. Can AI and a chatbot provide for this? Possibly. But for people like me (and I know I’m not the only one), I prefer talking to a real, live person, who is paid for knowing all the complexities of the market and industry to guide me. As I used to say in my financial planning days to prospective clients, "Just because you can use WebMD to diagnose your problems doesn’t mean you will perform the surgery on yourself, right?" See also: How to Augment Agent Channels   That’s not to say that agents don’t face a risk. Some of the simpler personal and commercial lines may be able to be sold direct (though, in my opinion, there will almost always need to be a live person to be a backup to answer questions for a customer who purchases online). The more complex lines and individual circumstances, specifically when it comes to estate/legacy planning, tax sheltering and comprehensive solutions for businesses (both small and large), will need to be assisted by agents. Further, I can’t see super-high-net-worth customers using digital only as their means for buying insurance. Agents need to start eating their spinach. They need to invest in educating themselves as well as in digital tools that can enhance the customer experience. In the digital age, customer experience is going to the key differentiator. I personally use an agent because I want to have the expertise of a live person to bounce ideas off. But, if the agent I am working with as well as the carrier he is representing both have tools to make my experience with them more engaging (and back office systems that also run smoothly), then I will be a happy policyholder. In posts here and in conversations I have daily, I keep saying that insurtech startups need to have an insurance person on their team (either as an adviser or part of their management team). I’m going to take that a step further; they need someone who has done insurance sales. If they really want to learn the business, this is going to be the best way for them to do so. You can find the original article published here.

Stephen Goldstein

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Stephen Goldstein

Stephen Goldstein is a global insurance executive with more than 10 years of experience in insurance and financial services across the U.S., European and Asian markets in various roles including distribution, operations, audit, market entry and corporate strategy.


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