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How High Touch Outweighs High Tech

The information revolution has done more than just provide consumers with access to information; it has created a paradigm shift in the way most professionals conduct business with their clients. Insurance agents and brokers today are not only expected to be a trusted adviser of holistic risk management solutions to meet their clients’ complex needs but also a navigator into their financially stable future.

To better understand how consumers are engaged in today’s digital economy, Chubb recently surveyed some 1,200 individuals on how they purchase insurance and the value they see in working with independent agents and brokers. The Chubb survey, “Winning the New Client Journey,” finds that 53% of consumers have shopped online for insurance in the past 12 months and 61% are likely to do so in the future. In addition, successful individuals and families are the most likely to browse home insurance offerings online, with 63% of such individuals and 73% of such families reporting that they have or plan to do so – the most of any income groups.

Online shopping is a very attractive option for consumers. It’s convenient. It’s easy. It’s anonymous. It also presents people with an array of generalized solutions offered at seemingly inexpensive prices. The reality, however, is that these offers and their upfront savings may not address the very real needs of the buyer. The information revolution may have armed clients with increased access but not always with the ability to translate price and item information into useful knowledge.

The survey also showed that, despite the fact consumers are conducting online research for homeowners insurance, 80% of respondents actually want their agents and brokers to prioritize getting the right insurance policies for protection over getting the lowest price. While the initial question posed by clients might be on price, they are presenting agents/brokers with an opportunity to better help them understand and differentiate the underlying value of products and how these relate to their specific needs.

High Touch Improves High Tech and Client Retention

Chubb’s survey found that 35% of consumers cited saving time as the top reason for purchasing insurance online. High tech may appear to be a time saver, but it will never replace high touch and the long-term relationship the agents and brokers share with their clients. The basis of a healthy agent-broker/client relationship lies in the following three attributes:

  1. The ability to provide clients with guidance rooted in an understanding of their life situation;
  2. The ability to differentiate between the fine print of product offerings; and,
  3. The ability to think beyond the obvious of how today’s seemingly innocent purchase will affect tomorrow’s complex needs.

Financially successful clients may easily overlook significant property and casualty (P&C) risks during that initial, and seemingly innocuous, online search. An agent or broker’s ability to successfully guide a client from online information gatherer to informed decision maker is a key factor in any business development and retention plan.

See also: Insurtech Ingredients? We Just Want Cake  

Demonstrating Your Value and Providing Customized Solutions

Chubb’s survey also revealed that 54% of successful clients said that agents and brokers actually lose credibility when they lead the conversation with the lowest-cost option. Although clients may initiate a conversation about their price and product search information found online, they reach out to agents and brokers with an opportunity to be a trusted adviser. It’s an invitation to be their counselors and crafters of customized solutions that will help their clients address some of life’s most challenging needs and circumstances.

In addition, the underlying value in the agent/broker-client / relationship begins weeks and months before the client calls about the latest insurance information found during an online search. To help retain clients, here are a few basic questions every agent and broker should ask:

  • Did I respond in a timely manner during a claim experience or request for a quote on a new policy?
  • When my client called about the addition to the house or installation of a pool, did I extend the conversation so the client better understood all the property and liability insurance implications of those additions?

When agents and brokers demonstrate that they anticipate and understand their clients’ broader needs, they will have an opportunity to present bigger solutions. Agents and brokers should work with their clients to build a complete profile of their clients’ risk exposures and stress that one-size-fits-all insurance policies are insufficient for seemingly innocent household decisions, such as the installation of a pool. Clients will assign increased value to the agent-broker relationship, and price will be less of a factor, when you present well-thought-out and customized solutions.

Enhancing the Value of Agents and Brokers to Clients

Life-changing circumstances and events can be challenging not only for clients, but also for agents and brokers. To help agents and brokers during their clients’ changing purchasing journeys, Chubb has developed a new resource center that includes quick informational videos, resources, tactics that both agents and brokers can download and put to immediate use. Agents and brokers can access that resource at: www.chubb.com/winthejourney.

See also: Strategies to Combat Barriers to Insurtech  

The information revolution may have equipped clients with increased access to information, but agents and brokers have the insights and knowledge to enhance the value of that information and protect the long-term interest and assets of their clients.

Cyber: Black Hole or Huge Opportunity?

You own a house. It burns down. Your insurer only pays out 15% of the loss.

That’s a serious case of under-insurance. You’d wonder why you bothered with insurance in the first place. In reality, massive under-insurance is very rare for conventional property fire losses. But what about cyber insurance? In 2017, the total global economic loss from cyber attacks was $1.5 trillion, according to Cambridge University Centre for Risk Studies. But only 15% of that was insured.

I chaired a panel on cyber at the Insurtech Rising conference in September. Sarah Stephens from JLT and Eelco Ouwerkerk from Aon represented the brokers. Andrew Martin from Dyanrisk and Sidd Gavirneni from Zeguro, the two cyber startups. I asked them why we are seeing such a shortfall. Are companies not interested in buying or is the insurance market failing to deliver the necessary protection for cyber today? And is this an opportunity for insurtech start-ups to step in?

High demand, but not the highest priority

We’ll hit $4 billion in cyber insurance premium by the end of this year. Allianz has predicted $20 billion by 2025. And most industry commentators believe 30% to 40% annual growth will continue for the next few years.

A line of business growing at more than 30% per year, with combined ratios around 60%, at a time when insurers are struggling to find new sources of income is not to be sniffed at.

But the risks are getting bigger. My panelists had no problem in rattling off new threats to be concerned with as we look ahead to 2019. Crypto currency hacks, increasing use of cloud, ransomware, GDPR, greater connectivity through sensors, driverless cars, even blockchain itself could be vulnerable. Each technical innovation represents a new threat vector. Cyber insurance is growing, but so is the gap between the economic and insured loss.

The demand is there, but there are a lot of competing priorities. Today’s premiums represent less than 0.1% of the $4.8 trillion global property/casualty market. Let’s try to put that in context. If the ratio of premium between cyber and all other insurance was the same as the ratio of time spent thinking about cyber and other types of risk, how long would a risk manager allocate to cyber risk? Even someone thinking about insurance all day, every day for a full working year would spend less than seven minutes a month on cyber.

It’s not because we are unaware of the risks. Cyber is one of the few classes of insurance that can affect everyone. The NotPetya virus attack, launched in June 2017, caused $2.7 billion of insured loss by May 2018, according to PCS, and losses continues to rise. That makes it the sixth largest catastrophe loss in 2017, a year with major hurricanes and wildfires. Yet the NotPetya event is rarely mentioned as an insurance catastrophe and appears to have had no impact on availability of cover or terms. Rates are even reported to be declining significantly this year.

See also: How Insurtech Boosts Cyber Risk  

Large corporates are motivated buyers. They have an appetite for far greater coverage than limits that cap out at $500 million. Less than 40% of SMEs in the U.S. and U.K. had cyber insurance at the end of 2017, but that is far greater penetration than five years ago. The insurance market has an excess of capital to deploy. As the tools evolve, insurance limits will increase. Greater limits mean more premium, which in turn create more revenue to justify higher fees for licensing new cyber tools. Everyone wins.

Maybe.

Growing cyber insurance coverage is core to the strategy of many of the largest insurers.

Cyber risk has been available since at least 2004. Some of the major insurers have had an appetite for providing cyber cover for a decade or more. AIG is the largest writer, with more than 20% of the market. Chubb, Axis, XL Catlin and Lloyd’s insurer Beazley entered the market early and continue to increase their exposure to cyber insurance. Munich Re has declared that it wants to write 10% of the cyber insurance market by 2020 (when it estimates premium will be $8 billion to $10 billion). All of these companies are partnering with established experts in cyber risk, and start-ups, buying third party analytics and data. Some, such as Munich Re, also offer underwriting capacity to MGAs specializing in cyber.

The major brokers are building up their own skills, too. Aon acquired Stroz Friedberg in 2016. Both Guy Carpenter and JLT announced relationships earlier this year with cyber modeling company and Symantec spin off CyberCube. Not every major insurer is a cyber enthusiast. Swiss Re CEO Christian Mumenthaler declared that the company would stay underweight in its cyber coverage. But most insurers are realizing they need to be active in this market. According to Fitch, 75 insurers wrote more than $1 million each of annual cyber premiums last year.

But are the analytics keeping up?

Despite the existence of cyber analytic tools, part of the problem is that demand for insurance is constrained by the extent to which even the most credible tools can measure and manage the risk. Insurers are rightly cautious, and some skeptical, as to the extent to which data and analytics can be used to price cyber insurance. The inherent uncertainties of any model are compounded by a risk that is rapidly evolving, driven by motivated “threat actors” continually probing for weaknesses.

The biggest barrier to growth is the ability to confidently diversify cyber insurance exposures. Most insurers, and all reinsurers, can offer conventional insurance at scale because they expect losses to come from only a small part of their portfolio. Notwithstanding the occasional wildfire, fire risks tend to be spread out in time and geography, and losses are largely predicable year to year. Natural catastrophes such as hurricanes or floods can create unpredictable and large local concentrations of loss but are limited to well-known regions. Major losses can be offset with reinsurance.

Cyber crosses all boundaries. In today’s highly connected world, corporate and country boundaries offer few barriers to a determined and malicious assailant. The largest cyber writers understand the risk for potential contagion across their books. They are among the biggest supporters of the new tools and analytics that help understand and manage their cyber risk accumulation.

What about insurtech?

Insurer, investor or startup – everyone today is looking for the products that have the potential to achieve breakout growth. Established insurers want new solutions to new problems; investment funds are under pressure to deploy their capital. A handful of new companies are emerging, either to offer insurers cyber analytics or to sell cyber insurance themselves. Some want to do both. But is this sufficient?

The SME sector is becoming fertile ground for MGAs and brokers starting up or refocusing their offerings. But with such a huge, untapped market (85% of loss not insured), why aren’t cyber startups dominating the insurtech scene by now? The number of insurtech companies offering credible analytics for cyber seems disproportionately small relative to the opportunity and growth potential. Do we really need another startup offering insurance for flight cancellation, bicycle insurance or mobile phone damage?

While the opportunity for insurtech startups is clear, this is a tough area to succeed in. Building an industrial-strength cyber model is hard. Convincing an insurer to make multimillion-dollar bets on the basis of what the model says is even more difficult. Not everyone is going to be a winner. Some of the companies emerging in this space are already struggling to make sustainable commercial progress. Cyber risk modeler Cyence roared out from stealth mode fueled by $40 million of VC funding in September 2016 and was acquired by Guidewire a year later for $265 million. Today, the company appears to be struggling to deliver on its early promises, with rumors of clients returning the product and changes in key personnel.

The silent threat

The market for cyber is not just growing vertically. There is the potential for major horizontal growth, too. Cyber risks affect the mainstream insurance markets, and this gives another source of threat, but also opportunity.

Most of the focus on cyber insurance has been on the affirmative cover – situations where cyber is explicitly written, often as a result of being excluded from conventional contracts. Losses can also come from ” silent cyber,” the damage to physical assets triggered by an attack that would be covered under a conventional policy where cyber exclusions are not explicit. Silent cyber losses could be massive. In 2015, the Cambridge Risk Centre worked with Lloyd’s to model a power shutdown of the U.S. Northeast caused by an attack on power generators. The center estimated a minimum of $243 billion economic loss and $24 billion in insured loss.

In the current market conditions, cyber can be difficult to exclude from more traditional coverage such as property fire policies, or may just be overlooked. So far, there have been only a handful of small reported losses attributed to silent cyber. But now regulators are starting to ask companies to account for how they manage their silent cyber exposures. It’s on the future list of product features for some of the existing models. Helping companies address regulatory demands is an area worth exploring for startups in any industry.

See also: Breaking Down Silos on Cyber Risk  

Ultimately, we don’t yet care enough

We all know cyber risk exists. Intuitively, we understand an attack on our technology could be bad for us. Yet, despite the level of reported losses, few of us have personally, or professionally, experienced a disabling attack. The well-publicized attacks on large, familiar corporations, including, most recently, British Airways, have mostly affected only single companies. Data breach has been by far the most common type of loss. No one company has yet been completely locked out of its computer systems. WannaCry and NotPetya were unusual in targeting multiple organizations, with far more aggressive attacks that disabled systems, but on a very localized basis.

So, most of us underestimate both the risk (how likely), and the severity (how bad) of a cyber attack in our own lives. We are not as diligent as we should be in managing our passwords or implementing basic cyber hygiene. We, too, spend less than seven minutes a month thinking about our cyber risk.

This lack of deep fear about the cyber threat (some may call it complacency) goes further than increasing our own vulnerabilities. It also the reason we have more startups offering new ways to underwrite bicycles than we do companies with credible analytics for cyber.

Rationally, we know the risk exists and could be debilitating. Emotionally, our lack of personal experience means that cyber remains “interesting” but not “compelling” either as an investment or startup choice.

Getting involved

So, let’s not beat up the incumbents again. Insurance has a slow pulse rate. Change is geared around an annual cycle of renewals. It evolves, but slowly. Insurers want to write more cyber risk, but not blindly. The growth of the market relies on the tools to measure and manage the risk. The emergence of a new breed of technology companies, such as CyberCube, that combine deep domain knowledge in cyber analytics with an understanding of insurance and catastrophe modeling, is setting the standard for new entrants.

Managing cyber risk will become an increasingly important part of our lives. It’s not easy, and there are few shortcuts, but there are still plenty of opportunities to get involved helping to manage, measure and insure the risk. When (not if) a true cyber mega-catastrophe does happen, attitudes will change rapidly. Those already in the market, whether as investors, startups or forward thinking insurers, will be best-positioned to meet the urgent need for increased risk mitigation and insurance.

An Insurtech Reality Check

If you’ve got your eyes set on technology that won’t move the needle this year, it’s time to reevaluate what can provide bottom-line results in the short term. AI and machine learning will have their day in commercial insurance. But what are you doing today to drive tangible business results? Insurtech does not have to be a “pie in the sky” endeavor. It can be deployed right now.

Just a year ago, the insurtech conversation was all about innovation labs, blockchain, IOT, wearables and, of course, AI. Now, the dust has settled a bit, and the realization has set in that those bright, shiny objects may take years to make a real impact on re/insurers’ bottom lines. While they are still undoubtedly vital to innovation, long-term success and survival, it’s important to strike a balance between “pie in the sky” and practical. Last year’s devastating catastrophes served as a catalyst for more focus on short-term solutions that can improve bottom lines—now. Not years from now. This swing to here-and-now solutions was recently articulated in an article by Ilya Bodner, founder of insurtech startup Bold Penguin, where he notes:

“Insurtech is moving rapidly now into commercial lines where the attention and intent is focused on solutions that will deliver a strategic and immediate return on investment (ROI)….Insurers are moving away from bright, shiny, insurtech objects and toward service partners, emerging technologies and solution providers with a return on investment more immediate than promised for five years down the road.”

I second this sentiment. P&C risks are changing, as evidenced by 2017’s $144 billion in global insured losses and a commercial lines combined ratio of 104%. And, while a strong market made many insurers whole last year, that is not a guarantee going forward. The next hurricane, flood or wildfire won’t wait for you to innovate. Insurers must find ways to bring innovation to their bottom lines now. Don’t get me wrong, pie in the sky is good—and it is necessary. But insurers must strike a balance between their long games and short gains. You need both.

Caution: The hard truth

I don’t have to tell you that following last year’s back-to-back hurricanes there was an outcry about how the models got it wrong (of course, it didn’t help that some modelers put out early and grossly inaccurate estimates that incited market confusion and concern). Here’s the hard truth: Insurers also got it wrong. Got it wrong by using a single view of risk; by not taking advantage of innovations in data; by taking too long to operationalize data; by waiting for the perfect, utopian platform (in-house or commercial) to be built or delivered; by expecting legacy analytics software to deliver the scalability, reliability and insight required to act efficiently and effectively. No longer can insurers approach risk The. Same. Old. Way. Risk is changing. You must change with it. And the good news is, integrating insurtech in a way that helps you better assess and manage the evolving landscape of catastrophe risk doesn’t have to be time-consuming or costly, and it can produce immediate results.

Here are a few of the challenges that insurers face that insurtech can help them address, in the here and now:

  • Reality: Models provide a “framework for thinking; they don’t represent truth.” Evan Greenberg, chairman and CEO of Chubb, recently stated, “Given there have been three one-in-100-year floods in 18 months, how can Harvey represent a 1% chance of occurring, as the models suggested? Models provide an organized framework for thinking; they don’t represent truth.” Now, we all know models serve an important purpose, and our clients can derive insights from modeled data within our platform. But models must be taken with a dose of good old-fashioned human judgment. Models and the outputs are nuanced. It’s all about identifying the right models and model components that best represent your lines of business, geography and business practices. But it’s also about balancing resources and business value with this expensive exercise. You need to have an intelligent conversation about model nuances—and figure out the “so what” questions that models provoke but don’t answer.

See also: Can Insurtech Rescue Insurance?  

  • Reality: You can’t handle all the data. There’s a gap between the wealth of data now available and an insurer’s ability to quickly process, contextualize and derive insight from that data. Insurers are generally frustrated by a lack of process and an easy way to consume the frequent and sophisticated data that expert providers put out during events like Harvey, Irma, Maria, the Mexico City earthquake and the California wildfires. Beyond the sheer volume of data, insurance professionals are expected to make sense of it by using complex GIS tools. In reality, you have all this data but no actionable information because you can’t effectively make sense of it. Even insurers with dedicated data teams and in-house GIS specialists struggle to keep up. (SpatialKey tackles this problem by enabling expert data from disparate sources (e.g. NOAA, Impact Forecasting, JBA, KatRisk) and putting it into usable formats that insurers can instantly derive insight from and deploy throughout their organizations. We do the processing work, so our clients can focus on the analysis work.)
  • Reality: Your best data is your own, but you’re not benefiting from it. It’s one thing to be in possession of data, and quite another to be able to realize its full value. Data alone has little value. One of our clients, for example, needed a way to re-deploy its own data to its underwriters, so we helped the company integrate an underwriting solution that would put its data, along with expert third-party data, in the hands of its underwriters—all from a single access point that would consolidate disparate sources and drive enterprise consistency.
  • Reality: Your customers expect on-demand; you should, too. Your customers don’t want to wait for a quote or go through a lengthy process to submit a claim. Our society is instant everything, and while commercial insurance may not be held to the same real-time pressure as personal lines, it is moving in that direction. When you need the latest hurricane footprint, you need it now, not four hours from now. When an earthquake strikes Mexico City, you need to understand your potential business interruption costs today. When a volcano is erupting and no drones are allowed in the surrounding airspace, you need a geospatial analytics solution that can help you provide advanced outreach to insureds and do the financial calculations to understand actual exposure. Likewise, when your underwriters are trying to win business, you’d rather they spent their time evaluating the risk than searching for information.

Who knows what this hurricane or wildfire season will hold. The question is, are you prepared to handle it better than last year? What changes have you made to strengthen your resilience and that of your insureds? What has been learned and applied for meaningful results? It’s a misnomer that insurtech and disruption go hand in hand. Some insurtech solutions are built to complement—to drive efficiencies, cost savings and underwriting profitability—not necessarily replace existing processes or legacy systems. Data and analytics is an area where insurers, brokers and MGAs can still improve their bottom lines yet in 2018.

See also: To Be or Not to Be Insurtech  

Take down the pie and dig in

My intention is not to dilute the importance of up-and-coming insurtech technologies, like AI and machine learning. They will undoubtedly help insurers compete as risks become more complex. My point is that those longer-term technological investments must be tempered with an understanding of what technologies will help move the needle in the present. You can strike a balance between pie-in-the-sky insurtech and insurtech that works for you now.

How Insurance Fits in Financial Management

There’s no better time than the present to shed light on an integral, yet commonly overlooked, aspect of financial planning: property and casualty (P&C) insurance needs.

New data from Chubb and Oliver Wyman finds that just 28% of financial advisers address their clients’ P&C insurance needs—leaving clients exposed to significant gaps in coverage and potential out-of-pocket costs. Yet, 77% of successful individuals want their advisers to provide this type of support.

This mismatch in expectations versus advisory services offered presents an opportunity for agents and brokers to build connections with financial advisers in pursuit of holistic wealth management strategies. Here’s how they can begin making in-roads.

Step 1: Articulate Why Holistic Wealth Management Matters

Advisers innately understand the importance of updating client financial planning strategies to respond to significant life changes—be it a new baby or new home purchase. But they often don’t know that failing to advise their clients to take the same approach with their insurance coverage can cost them millions.

Take Rick and Sue Smith. They recently moved into a new home and bought a backyard trampoline for their children but did not update their umbrella policy to reflect this purchase. One day, unexpected tragedy strikes—a friend of the Smiths’ children is injured while playing on their trampoline. Following a lawsuit, the Smiths must pay $2 million in damages.

Unfortunately, the Smiths’ standard umbrella policy only covers $1.1 million in liability—not including legal fees—and they’re required to pay the rest out of pocket. That means tapping into college savings and their nest egg. If the Smiths had an adviser who counseled them on insurance needs, they could have saved a substantial amount of money.

See also: The First Quarter in Insurtech Financials  

The unexpected will continue to happen, and it’s crucial that financial advisers ensure their clients are adequately protected. Helping them understand the P&C risk exposures their clients may face—many of which are often complex and difficult to grasp—is the best foundation on which to build a relationship.

Step 2: Explore the Roadblocks

Once advisers understand the role that P&C insurance plays in wealth management, the next step in the relationship is to help them grasp the three largest roadblocks that stand in the way of achieving holistic wealth management strategies.

First, many clients lack insurance products entirely or lack key coverages within the products they have. For instance, the Chubb and Oliver Wyman study found that, while most individuals have liability insurance, many don’t have high enough limits—similar to the Smiths. It was also shown that most Americans lack core insurance coverages, including for valuables like fine art (87%) or even flood insurance (76%).

Second, individuals who do purchase insurance often buy policies with the wrong features, largely due to using a standard carrier to cover their unique risk profile. As a result, these individuals could have an inadequate amount of coverage, overpay for features they don’t need or leave money on the table by not taking advantage of available discounts.

Third, and most importantly, clients are not receiving the right insurance advice from financial advisers. In fact, the same Chubb and Oliver Wyman research found that the driving forces behind sub-optimal client insurance protection is a lack of understanding of their risks and exposures, unpleasant prior experiences with insurers and little familiarity with insurance products.

No one expects financial advisers to become insurance experts. But, by understanding the core insurance challenges that clients face, financial advisers and agents and brokers can work together to build a holistic wealth management strategy tailored to each shared client.

Step 3: Explain the Business Benefits

Creating harmony between financial advisers and insurance agents and brokers doesn’t just benefit clients—there is also a business development case to be made.

As mentioned, more than three-quarters of Americans want their financial adviser to offer P&C support. If that isn’t convincing enough, 40% of successful Americans surveyed noted they’d consider switching to an adviser who does provide P&C support; 16% who would switch even if they had to pay extra fees.

See also: Why Financial Wellness Is Elusive  

There is clearly an opportunity for advisers to grow their business by working with agents and brokers (and for agents and brokers to increase their client base through referrals), while benefiting clients. The time for financial advisers and agents and brokers to act is now. Don’t wait.

3 Ways Agents Should Market Digitally

It’s no secret that digital advancements have fundamentally changed the way consumers shop. The steps that a prospect takes from the first point of contact to making a purchasing decision have altered dramatically—potential buyers now visit websites and social media networks, considering all positive and negative reviews, before deciding to buy. In fact, according to Forbes Insights, the majority of customers (82%) conduct research online for major purchases.

Insurance products are no exception, and savvy agents and brokers who are mindful of this evolution can take advantage of the opportunity it presents to digitally market to potential clients, without getting lost in the clutter.

The Digital Marketing Landscape

Digital marketing allows insurance agencies to better communicate with prospects on a large scale. Consider that 63% of smartphone users look at their devices every 30 minutes, according to a report from the Interactive Advertising Bureau. Among luxury shoppers, two-thirds say they prefer to shop via mobile, according to Content Square. Add the fact that 2.34 billion people regularly visit social network sites, eMarketer says, and it becomes clear that digital channels are a prime opportunity for insurance agents to reach prospects.

See also: 5 Accelerating Trends in Digital Marketing  

Digital marketing is a rapidly changing environment, and, for independent agents and brokers, who typically are not marketing professionals, keeping pace may feel daunting. Additionally, with increased investments in digital promotion, consumers are now bombarded with advertising across all digital channels—from search engines to social media, and everywhere in between—so more brands are competing for consumers’ limited attention.

How can independent agents and brokers cut through the clutter and meaningfully use digital marketing to reach prospects? While many agencies are embracing social media and email to connect with prospects and clients and actively updating their websites, the language they use matters, as well.

The “Successful” Market Opportunity

According to research, while nearly 80% of consumers say they are satisfied with their current insurance carrier, only about 40% would actively recommend their coverage. With 8 to 10 million “successful”—or high-net-worth—households in the U.S. (an estimate using publicly available data from the U.S. Census Bureau), the pipeline of prospects for agencies specializing in high-net-worth clients is much richer than some may believe.

The single largest growth opportunity for independent agents and brokers and insurers serving this market is in using digital marketing to make prospects aware of the service they can—and should—expect of their agent and carrier. This means elevating digital marketing language, so that prospects notice.

Three Digital Marketing Language Tips for Insurance Agents and Brokers

Chubb’s research with Maslansky + Partners is focused on teaching independent agents and brokers how to build trust with prospects and current clients through digital marketing that establishes an emotional connection with consumers. What are some practical changes that agents can implement now?

  • Relate to Success, Not Wealth: Direct appeals to prospects’ socioeconomic status may have inadvertent consequences. To some, the phrase “high-net-worth” holds stereotypical status connotations that may be viewed in a negative light, unintentionally backfiring against independent agents and brokers who specialize in this market. Instead, agents should consider using words such as “successful” and “accomplished,” as prospects are likely proud of their achievements.
  • Lead With a Better Experience: Because many consumers claim to be satisfied with their insurance, focusing on coverage is not an effective method of getting them to switch carriers or move to a specialty provider. Additionally, many prospects don’t define themselves by what they have—it’s about what they do. Agents should lean on the unique experience that prospects will receive by working with them, rather than focusing on gaps in property coverage or the negative experience they may have with another agent and carrier.
  • Show the Differentiated Value: While knocking the competition may feel satisfying, it may make agents and carriers appear to have a hidden agenda. Instead of outright highlighting competitors’ shortcomings, agents should simply focus on their differentiated value, allowing prospects and clients to draw the conclusion for themselves.

See also: Future of Digital Transformation  

Regardless of prospects’ stage of life—retired, building a family or building a career—the research shows that successful prospects and clients react to relatable stories that demonstrate they will be treated with care and empathy, as people, not claims. Independent agents and brokers can evolve the way they market themselves to successful prospects by making simple changes to their digital marketing. Chubb aims to invest in agency partners’ growth by providing resources that help them do so, including educational opportunities, digital marketing guidance and content creation.