Tag Archives: Howe

What Gig Economy Means for Insurers

I consider myself extremely lucky. I have a front row seat to a monumental shift in consumer behavior, which translates into important opportunities, and risks, for traditional insurance providers.

I don’t plan on sitting back and watching the show from a distance, I’m getting involved. Although for the record, I am not a good actor. Maybe I’ll take a gig with the stage crew.

The shift I am referring to is the so-called gig economy. Some use synonyms like the sharing economy, access economy or collaborative consumption. The list goes on. All of these terms boil down to one important reality: the ability to turn otherwise unproductive assets into income-producing ones through micro jobs, or “gigs.”

These assets include cars, homes, consumer items, hobbies and spare time.

As a vote of confidence to this new trend, Merriam-Webster added the term “sharing economy”: Sharing Economy (Noun): economic activity that involves individuals buying or selling usually temporary access to goods or services, especially as arranged through an online company or organization. 

According to PricewaterhouseCoopers (PWC), the estimated value of the sharing economy sector by 2025 will be $335 billion. For 2013, that same number was $15 billion. In just more than 10 years, then, PWC predicts that the value of the sharing economy will skyrocket by more than $300 billion.

See also: How to Insure the Sharing Economy

recent TIME Magazine study reports that 45 million American adults participate in the sharing economy. This is 1 in 5 American adults! Let that number sink in for a moment.

You good? Okay, let’s continue.

The explosive growth in the sharing economy is occurring amid a backdrop of larger social, economic and demographic trends. These include:

  • Increasing urbanization (people have less space)
  • Aging demographics (older people have less money and need more services)
  • A shift in consumer behavior from ownership to access

In an excellent 2015 Insurance Thought Leadership article, Neil Howe concluded that, “although some dismiss the gig economy as a fad, a hard look at the numbers shows it’s both large and growing, with profound implications.”

So, business is booming, consumers are participating and socio-demographic trends support the growing sharing economy sector. What does this mean for the insurance industry as a whole? A lot.

Let me explain.

Today, I want to plant a seed. Well, as a matter of fact the seed has already been planted, a number of times by a number of entrepreneurs. What we are doing today is watering those seeds. The insurance industry is thirsty for disruption, and this is a good thing.

Insurance Industry, Meet Sharing Economy: An Introduction

In January, I wrote about my company, WeGoLook, and its applicability to traditional insurance operations. Specifically, we discussed the challenges the industry faces because its slow processing of claims can’t continue in an age where customers demand immediate access to information, as well as the opportunities that the demands create for innovators like WeGoLook. Thanks, millennials!

Today, I want to delve deeper into the disruption of this new gig economy, or sharing economy, in an effort to unpack some of the opportunities that are staring directly at us.

The insurance industry is currently at a technological and innovative crossroads. To take the correct path, strong leadership is required. Lucky for us, you don’t have to be an industry expert to be an industry leader.

The founders of Airbnb quickly began competing with (and surpassing!) large hotel chains, with zero knowledge about the accommodation industry — except being proficient at inflating air mattresses. Similarly, Uber quickly disrupted the taxi and transportation verticals with no industry experience. We live in an age where we either adapt or risk getting left behind as technology marches on. So, it’s imperative that we as industry experts fully understand how to incorporate new business models in our value chain.

See also: ‘Gig Economy’ Comes to Claim Handling

That’s what I hope to achieve in my business; to help lead us into a new era where innovation is understood, adopted and refined. I believe this is your goal, as well; after all, you are a subscriber to Insurance Thought Leadership.

So how can the new gig economy plug into traditional carrier business operations?

The Gig Economy: WeGoLook and Flexible Workers

Slowly, we are realizing that the insurance industry as a whole is one of financial arbitrage, rather than logistics. Why would a large insurance firm employ thousands of boots on the ground nationwide when gig economy companies such as mine have access to a flexible and ready workforce available at the tap of a smartphone? B2B crowdworkers can quickly gather information for underwriting and claims processing. These workers also have the ability to retrieve police reports, notarize documents, pick up salvage items, deliver documents and much more.

Remember, the sharing economy is about leveraging underutilized assets, including spare time, to fulfill both consumer and business requirements.

Crowdworkers offer four main benefits to traditional carriers:

1. Faster Flow of Information

As we all know, processing claims requires time and patience to gather relevant information, photographs and a myriad of other documentation. Getting the right information and accurate documentation can take even longer.

Yet, commercial policyholders need to know how quickly they will be receiving funds from a claim so they may, in turn, inform their customers. Similarly, individual policyholders need a claim settled without delay so they can return to normal life. This is just good business practice.

Digital and mobile platforms provide a faster flow of information. They also allow for the easier integration of crowdworkers while making sure that the right information flows into the right hands at the right time. For example, the WeGoLook mobile application directs our Lookers, those gig workers we were talking about earlier, to capture on-site data in the form of photos, video, measurements, answers to specific questions and more.

2. Ordering Efficiencies for Claim Handlers

While carriers worry about the massive rework that needs to be done to update back-end systems for the demands of today’s customers, a system like ours can be used as a front end that obviates the need for much of that work. For instance, once an order has been uploaded, WeGoLook will contact the policyholder to schedule an on-site inspection appointment, removing the task from the carrier’s workflow. The claim handler at the carrier can easily make special language or expertise requests, such as the requirement for a Looker who is also a notary, and not have to worry about logistics. WeGoLook technology allows for the claim handler to view video and photos within the report — even when the carrier’s back-end does not support video.

For good measure, because new systems are written from scratch and don’t carry all the baggage of legacy systems, users of our ordering dashboard can place an order for a Looker within an average of four minutes, compared with 12 minutes in traditional systems used to dispatch field assignment representatives.

See also: On-Demand Economy Is Just Starting

3. Customization and Security

Writing from scratch also lets new companies customize reports to the needs of clients, letting them view data however they like. Nothing changes, no matter the location of the policyholder or asset.

4. Cost Efficiencies

Finally, while I am the first to acknowledge that an on-demand workforce does not fully replace technical or specially certified field personnel, such as claims adjusters, a flexible workforce can be dispatched at the click of a button and can certainly augment, and in some cases, replace the need for full-time field staff.

Efficiencies emerge in the form of salary costs, fleet vehicle costs, travel expenses, labor costs and much more.

Yes, there will always be the need for an experienced field adjuster to be present under a number of circumstances. However, this is not the bulk of required work, and traditional carriers are wising up to this fact.

Conclusion, for Now

We believe that insurance should be smart and streamlined and adapt to customer needs. And these needs are changing rapidly within our disruptive environment. Insurers need to make their workforces more flexible by taking advantage of the gig economy.

The seed has been planted. The question now is, will the landscape become an innovation desert. Or, can we help foster and develop a fertile growing climate, reminiscent of the Oklahoma grain farms I grew up with.

I strongly believe it is the latter. I’m carrying a watering can and have my gardening gloves on.

Good luck, and don’t forget to water regularly!

3 Ways to Boost Agency Productivity

In the not too distant past, consumers went to independent agents for all of their insurance needs – whether simple or complex – because insurance was often an elusive concept to the man on the street. At the same time, insurance coverage was considered something everyone must have, so when insurance-related questions came up, many consumers’ initial instinct was, “I have to talk to my agent.”

Over the past few years, this paradigm has shifted toward consumers being much more willing and able to build an understanding of their needs. This trend is broadly seen across nearly every industry and is accelerating in insurance. While the trusted relationship with an agent is often still crucial, insurance consumers today are researching, purchasing and interacting with the insurance industry in new ways, and increasingly on their own terms. In working with agencies and end consumers around the industry, we think the shifting behavior of consumers can be summarized in two key ways:

  • The Knowledgeable Consumer
    This consumer actively researches insurance online and consults his peer network prior to purchasing policies – either online or in person. How can you quickly and effectively service these consumers before they research other options or take their business elsewhere?
  • The Always-On Consumer
    This consumer wants information anytime, anywhere via any device, be it smartphone, tablet or desktop computer. These consumers don’t want to stop by your office for an auto ID card or certificate of insurance. How can you give them access to their insurance information when and where they want it?

One thing these two types of consumers have in common is the expectation for instant access to information. From an agent’s perspective, providing a mechanism for online service allows for an improved experience by allowing consumers the flexibility to interact with your agency when and how they want. And while there may still be a window of opportunity for this to be considered as a differentiator for the agency, the day is approaching where nearly every consumer will expect and demand it of the agency. Consumers who don’t get this immediate accessibility and flexibility will take their business elsewhere. Further, by pushing common transactions online, agencies can free resources to focus on higher-value service interactions with consumers.

As seen across nearly every industry, advanced technology should be a key element of the agency strategy to meet these business objectives and the evolving expectations of insurance consumers. Agencies and brokerages are able to become more productive with relative ease thanks to enhanced data, mobility, better communication and increased adoption of third-party apps and other tools.

As an agency considers its business strategy, I’ll suggest there are three key considerations when it comes to the role technology solutions can play:

  1. Standardize and Dissect Your Data
  • Standardized Workflows
    To the extent it makes sense for your business, workflow consistency can yield real productivity gains and help capture comprehensive and better customer risk and demographic information your agency can use to better market, account round and engage customers. By leveraging standardized workflows, agency owners are ensuring data entry is consistent across an agency – regardless of location. Additionally, standardized workflows reduce the number of workarounds conducted by staff – increasing productivity at the outset and reducing any potential time spent rectifying workarounds at the back-end. The result will be improved quality and completeness of the underlying data.
  • Business Intelligence
    Over time, agencies and brokerages generate an immense amount of data – yet it can be difficult to access, analyze and understand that data in meaningful ways. Business intelligence (BI) solutions are one way to help turn all of that data into information. For example, principals can identify which producers are using their time most efficiently and driving the most revenue for the business. Principals can also evaluate how effectively their business is cross-selling and quickly identify new market opportunities. While traditional reporting can take hours if not days, BI solutions present your information in immediate and visual ways that drive new insights, enabling you to make more effective decisions to improve productivity and business growth.
  1. Think Easy Access
  • Mobile Technology
    New mobile technology affords producers all of the benefits associated with management system access within an office, without having producers tethered to a desk. This allows them to be more productive and to respond to clients and prospects more quickly and in the manner that current and prospective customers want and expect. For smaller agencies, where employees wear multiple hats within the organization, giving your employees access to tools when they’re away from the office is critical.
  • Online Access
    Consider how your business can leverage the cloud to drive productivity gains. The ability for service staff to work from home via the cloud, when needed, supports work-life balance and allows business to go on regardless of unexpected events. 
  1. Time Is Money
  • Paper No More
    Evaluate ways to become an all-digital agency and eliminate paper. Agencies and brokerages should leverage electronic signature and delivery of client documents, which reduces the time and expense of mailing paper copies.
  • Carrier Information Exchange
    Productivity gains have increased over the years as carriers improved their interface and as agencies better understood how and where to enter data in carrier systems. The vast majority of agencies use personal lines policy detail download to reduce rekeying of data, saving, on average, 81 minutes a day per employee. In addition to download, using real-time for service and rating saves agency employees as much as an hour per day. Policy download yields daily time-savings of nearly an hour and a half per department employee for personal lines and nearly an hour for commercial lines. Take the time to automate communications with your carrier on the front end to save more time over the long term.
  • Online Client Self-Service
    As mentioned, today’s insurance consumer increasingly expects information anytime, anywhere. Agencies need to provide clients the ability to access policy and billing information on their terms, which helps strengthen relationships, ensures high retention rates and drives revenue gains. Self-service capability can increase staff productivity and decrease costs in commercial lines, as well as personal.

Technology will allow you to work faster and, in turn, will redefine the products and services you offer to your clients. While working faster is one thing, using technology to provide mobile access, enhanced communication and streamlined procedures to more quickly serve clients will also drive new business and customer retention.

For additional insights on how to use technology to bolster agency productivity, check out our eBook, “Working Smarter: Finding Agency Productivity Gains.”