Tag Archives: agency management

4 Keys to Agency Modernization

Digital transformation has been a strategic goal across the insurance industry for years, and, thanks to  recent events, there’s never been a better time to make it an urgent priority. With both customers and agents shifting toward digital tools for nearly every need over the last few months, independent agencies are starting to fully recognize the potential of modernization to improve efficiency, service and profitability. 

In fact, new evidence shows agencies that adopt a suite of best-practice technologies in four key areas of modernization see up to 3X higher revenue growth compared with the industry average. That represents a huge potential for even the smallest independent agencies to increase profitability, expand to new markets and services and re-invest in agency growth.

See also: The Rules of Digital Transformation

For agencies that are ready to make the move but are unsure where to start, here are four areas of agency modernization that should be your first priorities:

1. Delivering a modern digital experience for clients. There’s an app for everything these days, and consumers have come to expect the convenience, 24/7 access and self-service capabilities that digital options provide. Agencies that offer online and mobile app access to policy data, transactions, documents and more can give their customers the timely, streamlined experience they expect when it fits their schedule—without having to wait until business hours or playing phone tag with the agent. 

Even better, aside from making your customers’ life easier with digital access, you can make your job easier, too. Providing a DIY service eliminates the time your agents have to spend mailing policy ID cards, processing payments and performing other routine tasks. This gives them more time to spend working directly with clients providing consultation and risk advisory services. 

2. Efficient agency management. Most agencies have an agency management system (AMS), but are you fully taking advantage of it? Many don’t keep up with training on new features or get new agents formally trained on their platform of record, instead taking a learn-while-doing approach. That means you could be missing out on some of the most valuable efficiency and productivity tools available. 

Meanwhile, there are also some great workflow automation and document management systems that can help to further streamline processes and improve client service. Tools like automated carrier downloads and multi-carrier submissions processes can substantially improve agent productivity, once again freeing them to spend more time working directly with clients.

3. Streamlined market connectivity. One of the challenges agencies face in delivering the best service to clients is a lack of real-time data on carrier appetite, pricing and efficient submissions. As the market shows signs of hardening and prices start inching up, your clients may begin shopping around. Agencies that can reach out to more markets faster to get the best coverage options for the best price will win their business.

Tools like comparative rating and electronic submissions platforms allow agencies to streamline the process of gathering client information and get that data to underwriters faster. For example, instead of separate individual submissions, an agent could input all the data about a new client once and get results back from multiple carriers at once. And with more efficient systems for submitting risks, agents can quickly identify which carriers have an appetite for that business and secure the best protection for their clients.

4. Unlock the power of data. Individually, many agencies are likely sitting on an untapped treasure trove of data, and the industry as a whole has been slow to leverage data analytics to drive business growth. There have been a number of hurdles to bringing data and analytics into daily agency business practices, including:

  • Unstructured data trapped in PDF documents,
  • The lack of a standardized data model for the industry,
  • Little investment in analytics resources, and 
  • A fear that “data science” will get in the way of the personal touch the insurance industry is built around

But recently we’ve seen substantial progress in overcoming these challenges, including technologies that put cross-sell and upsell opportunities directly in front of agents within the tools they already use every day. By incorporating user-friendly data analytics into your agency workflows, agents can quickly act on opportunities to grow sales, prevent churn and deliver better, more insightful service to clients.

See also: Strategic Planning in the COVID-19 Era

With agency consolidation, market evolution and increasing client and employee expectations, independent agencies are feeling the pressure to change. But an ever-broadening field of technology options can make the process feel daunting and overwhelming. Starting with these four key areas of modernization and focusing on integrated solutions that work together, you can chart a course to a more service-oriented, productive and profitable agency.

Traditional Insurance Is Dying

Finance. Taxis. Television. Medicine. What do these have in common?

They’re all on the long–and growing–list of industries being turned upside down by disruptive technology. 

The examples are legion. Once-sure-bet investments like taxicab medallions are at risk of going underwater. Bitcoin is giving consumers the power to bypass banks. Traditional television is at risk from online streaming.

Insurance Is No Different

In fact, innovative players have been disrupting the insurance market since before “disruption” was the buzzword it is today. 

Look at Esurance, which in 1999 rode the dot-com wave to success as the first insurance company to operate exclusively online. No forms, no policy mailers–it didn’t even mail paper bills.

By going paperless, Esurance told customers that it was the kind of company that cared about their preferences–and established itself as a unique player in an industry that places a premium on tradition. Insurance isn’t known for being innovative. 

Most insurance leaders operate under the assumption that if it ain’t broke, you shouldn’t fix it. And in a heavily regulated industry, that’s not totally unreasonable. 

But you only have to look at the scrappy start-ups that are taking down long-established players to understand what awaits the companies that aren’t willing to innovate.

Thinking Outside the Box

Take Time Warner–profit fell 7.2% last quarter as industry analysts foretold “the death of TV.” Meanwhile, Netflix’s profits are soaring beyond expectations–even as the risks it takes don’t always pan out. 

Remember the “Marco Polo” series that cost a reported $90 million? Neither does anyone else. But for every “Marco Polo” there’s an “Orange Is the New Black.” Highly successful programs on a subscription model show that Netflix’s willingness to take risks is carrying it past industry juggernauts.

The market is changing–and if you want to stay competitive, you need to use every weapon in your arsenal. Millennials aren’t buying insurance at the rate their parents did

To a consumer population weaned on technology like Uber and Venmo, the insurance industry seems positively antiquated. Facebook can advertise to you the brand of shoes you like–so your insurance company should be able to offer a product that you actually want.

The Information Importance

According to Accenture, “Regulated industries are especially vulnerable” to incumbents. When there are barriers to entry based on licensing requirements or fees, competition is lower. Decreased competition, in turn, leads to less incentive to innovate. This can leave regulated industries, such as insurance, healthcare and finance, in a highly vulnerable position when another company figures out a way to improve their offerings.

Other attributes that can make an industry vulnerable, per Accenture’s findings, can include:

  • Narrow focus: If a brand focuses entirely on cost savings, convenience or innovation, it isn’t effectively covering its bases. A disruptor that manages to offer two or three of these factors instead of just one has a near-immediate advantage.
  • Small scope or targets: Failing to expand offerings to all demographics can mean that industries or service providers aren’t able to replicate the broad reach of disruptors.
  • Failing to innovate: Disruptors don’t always get their product right on the very first try. Companies must innovate continuously and figure out ways to build continuous improvement into their business model.

Tech start-ups use information as an asset. How can you tell if information is a valuable weapon in the battle you’re fighting? 

“Big data” isn’t just a buzzword; industry analysts are calling it the wave of the future. At Citi, they’re talking about “the feed”: a real-time data stream that leverages the Internet of Things to reshape risk management. 

Auto insurers are turning to connected cars to let them reward safe drivers. Some life insurers are even offering discounts to customers who wear activity trackers.

It Can Happen to You

For most insurance companies, incorporating an unknown element into the way they operate is daunting. 

But talk to any cab driver, grocery store clerk or travel agent, and they’ll tell you that the only way to survive in a technology-driven world is to innovate.

Look at the insurance technology market to see what improvements you can incorporate into your organization, and think expansively about how you can use information: for agency management, to attract new customers and retain old ones, to expand your profit margins or to streamline operating costs. 

Your survival depends on it.

Insurers Must Finalize Digital Strategies

I’m a big believer in the power of good, evidence-based research; I’ve mentioned this often in my blog posts. So, I am pleased to start this new series discussing our recent Distribution and Agency Management Survey.

It’s the most extensive distribution survey in the insurance industry ever conducted by Accenture Research.  We canvassed top executives at 414 carriers in 20 countries in Europe, North America, Asia Pacific and Latin America. They ranged from marketing chiefs to CIOs, heads of distribution and sales, brokerage executives and chief digital officers—they were all involved in insurance distribution. Many of them, 44%, work in Europe. Nearly all the carriers we surveyed generate premium income of more than $1 billion a year. Forty-five percent were multiline insurers, 28% were property and casualty insurers, and 27% were life insurers.

Screen Shot 2016-02-17 at 1.34.34 PM

This is, indeed, a very powerful survey.

It gives a clear picture of how quickly insurers are deploying digital strategies in the sale and distribution of their products and services. Moreover, it highlights the actions carriers need to take to harness the full potential of digital technologies to transform their distribution model and avoid being left behind by competitors.

Digital technology is no longer an adjunct to the businesses of the world’s major insurers. It now dominates the agendas of most of the biggest carriers around the globe. And its influence is fast getting stronger.

We’ve entered an era of huge digital disruption. Carriers must move quickly to formalize their digital strategies and shape their future distribution models—one of the main findings of the Distribution and Agency Management Survey.

Reimagining insurance distribution - Distribution and Agent Management Survey Accenture POV

More than 80% of the insurance executives we surveyed intend to fully digitize their sales processes in the next few years. This is a huge shift from just two years ago, when only a minority of carriers had such plans. In Europe, 27% of insurers have already implemented end-to-end digital sales processes, and a further 30% plan to follow suit in the next three years. This is in line with trends from the rest of the world.

New highly personalized digital channels will enable insurers to build intimate customer relationships that can be leveraged by physical channels to sell further products and services. They’ll also offer new business opportunities. Nearly 60% of all the insurers we surveyed are prioritizing a shift to more customer-centric distribution models, while 48% have, or plan to have, a customer-centric hub that allows them to use customer data to improve the service experience. Raising the quality of the customer’s digital experience is a major priority among insurers in Europe and the rest of the world.

Carriers across the globe are preparing a host of new digital services and products. Competition will be fierce. In the midst of growing change and uncertainty, it’s vital insurers cultivate business agility and act decisively in selecting and implementing their digital strategies.

In my next blog post, I’ll examine, in more detail, the digital disruption that’s taking place in the distribution channels of major insurers around the world.

For more information about Accenture’s Distribution and Agency Management Survey, click here.