September 21, 2016
Commercial Insurers and Super Delegates
by Denise Garth
What if, on Jan, 1, 2017, you awoke to find that most commercial polices were being sold online through digital agencies?
No matter how hard I try, I have been unable to avoid being bombarded with news about the presidential race. While most of the opinions and assertions leave me wondering, the additional insights into the importance of super delegates fascinated me. It turns out that winning the traditional delegates was important, but having the super delegates on your side really swung the field in your favor. In one way, it doesn’t feel quite right that any delegate should have any greater impact than another. However, because no one asked me how to run party primaries, I suppose I’m left to live with my feelings and just “figure out how to live within these rules.”
As I work with many of our commercial clients on strategies for their digital footprint (a concept I’ll discuss in a moment), I can’t help but think of our super delegate equivalent — the proliferation of insurance aggregators. Whatever you may call them — rate exchanges, quote engines, comparison sites, aggregators or digital agencies — these newcomers are increasingly important and relevant distribution channels, and, no matter how long we attempt to ignore them, they won’t be going away. They will simply be wielding their distribution clout, helping insurers to grow as they continue to rapidly expand their prospect pipelines. For commercial insurers who may not wish to pay attention to aggregator growth or for those who would like to reserve their judgments on the future of commercial sales, I would like to suggest that it is time to swallow your notions, accept the relevance of these super delegates and just “figure out how to win within these rules.”
How quickly can an industry turn upside down?
In politics, anything can happen. Approval ratings can rise and fall dramatically in 24 hours. Major players and influencers can come from nowhere. I think 2016 is proving my point. In 2015, we had no idea that our presidential race would look quite like this. What if, on Jan. 1, 2017, you awoke to find that most commercial polices were being sold online through digital agencies? If you hadn’t seen it coming, it would certainly hit your organization like a ton of bricks. If you had seen it coming and you hadn’t prepared, it would feel even worse. If you had seen it coming, and you had aligned your organization with some of these alternate channels, you might feel gleeful. The point is, the day of the digital agency is close upon us. If you aren’t preparing to sell in this space, you are probably being shortsighted. The super delegates have arrived, more are on the way through the insurtech movement and it is time to court them.
See also: Commercial Insurers Face Tough Times
In the commercial space, we currently have companies such as NetQuote, CoverWallet and Insureon offering lead generation and quoting capabilities to commercial insurers as they offer real quotes to businesses in need of insurance. (Read more about new insurtech players in Majesco’s Future Trends report.) Insureon, probably the most-talked-about of the three, can quote on a fairly broad spectrum of business insurance. Insureon has tremendous reach and a good selection of insurers to bolster its offerings. If we see Insureon as our leading super delegate, what can we do to gain Insureon votes?
The digital footprint
Let’s step back for a moment and look at our high-level goals. Our goal is not to leave behind agent and broker service, but to embrace and prepare for new distribution channels by improving our digital footprint. As we often see, when it comes to digital preparedness, what’s good for one channel may be good for another. What is useful for the aggregators is likely to improve agent service, as well. Every step we take to become digitally ready, with the right back-end capabilities and integrations and the right front-end capabilities, will end up benefiting all channels, including traditional broker and agent capabilities. The real work of enabling the digital presence that these new channels require will prepare your organization for growth across channels by creating a consistent experience for both your delegates and your super delegates. If you have your digital footprint in position when a producer reaches out to your underwriter or phones in to your call center, they will capitalize on your improved capabilities, enhanced product offerings and simplified quote process.
The role of the super delegate
When I speak with clients, I often see how perspectives make all the difference. Insurers look at the existing distribution channels and all the technology options to further advance the agent and broker experience, and they see the newcomers like Insureon popping onto their scene. Most insurers seem to fall into two camps. Either they see aggregators as a threat or they view them as a smart option for distribution, reaching a broader set of customers and segments. This is the inside-out perspective. The insurer asks, “What can we do to engage or compete?”
But the digital agencies themselves have taken advantage of starting with a fresh perspective to make the customer experience seamless and easy. They are taking the outside-in perspective, asking, “What can we do to make ourselves more appealing?” They start with business preferences and how businesses will want to buy something. In that practice, they have positioned themselves as extensions of our internal systems. They are funnels attracting businesses like flowers attracting bees. If done correctly, integrating with these third-party players can mean a material addition to our distribution model, with little change to the traditional agent/broker approach. In this way, the super delegate has not only become an aggregator, but has become a cheerleader. It is their marketing and their messaging that will drive insurers’ businesses. (Read more about perspectives and purchase trends in the blog, The Power of Observation for Insurers.)
See also: How to Win in Commercial Lines
If I look at companies like Insureon as my super delegate (and cheerleader), I can see how I can tip the balance in my favor. I still have to win the affinity and loyalty of my agents and brokers, but having these new alternative distribution options could mean the difference between maintaining my business or breaking out to new customers, products and accelerated growth.
In Part 2 of this series, we’ll look at possible approaches to preparing the digital footprint and some of the questions an insurer should ask itself before beginning. We will also look closely at why business insurers may want to begin by developing insurance products for small, niche businesses.
This article was written by Robert Buhrle and originally appeared on Majesco.com.