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5 Predictions for Agents in 2018

The insurance industry has been talking about technological evolution for a long time. From the rise of insurtechs to implementing tools like client portals and e-signature, the need for digital transformation has been top-of-mind for all insurance professionals. But in 2018, the barriers have been removed, and this talk will finally evolve into significant action. The combination of competitive conditions, availability of cost-effective technology and numbers of independent agents striving for growth and better service creates the perfect storm to drive agent digital transformation.

While embracing digital is integral to competing in the market, consumers still heavily rely on the human, one-on-one service that only agents are able to provide. Great customer service is foundational for all agents. Providing the ideal mix of technology solutions and personal interaction should be at the center of an agency’s planning process as it prepares to meet customer demands and increase growth and retention.

See also: Insurtechs: 10 Super Agents, Power Brokers  

As the year comes to a close, we analyzed current trends and patterns in the insurance industry and developed five predictions for independent agents in 2018:

1. All about the infrastructure: Insureds expect on-demand service. They want their agencies to be always-on and to be able to conduct insurance business whenever and wherever they like. Agencies need systems and processes that can efficiently handle their workload. They have to have strong and flexible digital infrastructure to grow and expand. This includes interactive websites with online chat and quoting capabilities, client portals and mobile apps, next-generation agency management systems and integrated call centers for 24/7 service. In the new year, agents will be evaluating their infrastructures and expanding capabilities and services for clients.

2. Move from closed loop to open access: Agents operate in many environments. They regularly visit multiple carrier websites, manage their workload in their agency management system and pursue prospects who are gathered in their customer relationship management system. Most of these applications are closed, meaning that information put into one system won’t automatically populate into another system. This forces agents to spend time on manual workarounds and double data entry. Agents will seek to partner with companies and implement tools that can bridge the gap between various systems and choose applications that are built on open structures, meaning they “talk” to one another.

3. Pursuit of the paperless agency: E-signature is nothing new, it has been around the industry for 20 years. However, many agents still don’t use it. But in 2018, a large number of agencies will take the plunge and finally implement e-signature and other e-document tools. With a desire to not only be more efficient but also to improve the sustainability of their operation, more agencies will shift to an all-digital mentality when it comes to sending, receiving and signing documents. But this can’t be done in a vacuum. Agencies will also collaborate with carriers and be informed by regulators to help make the shift to all-digital documentation.

4. Synergistic partnerships increasing access to sales analytics: The carrier/agent partnership is about to go beyond a provider/seller framework. Agents and carriers both have access to unique information that, when shared, can help both organizations grow. Agents gather sales data such as target market behaviors, web preferences and specific product interest that can help carriers improve sales and marketing efforts. Meanwhile, carriers have the technological infrastructure and expertise enabling them to provide education, training and best-practice programs that can help agencies improve their digital capabilities. These two entities will develop stronger partnerships that will enable both of them to improve sales.

5. Agents embrace artificial intelligence (AI): For agents who are still trying to find ways to implement interactive websites, e-signature, or client portals, technologies such as machine learning, robotics and artificial intelligence seem way outside of their current capabilities. But these tools are beginning to become more commonplace, and agents will appreciate their ease and benefits and might even realize they have already been using some sort of AI. From automatic fill on certain forms to using machine learning to move key prospects to the top of the workflow to installing chatbots on websites that can resolve claims and answer clients’ simple questions, agencies will convert from trepidation to the implementation of AI that will drive key processes.

See also: Chatbots and Agents: The Dynamic Duo  

2018 will be a transformative year for independent agents with many taking significant steps toward digital adoption. But even as agents embrace technology they cannot forget the human element. As more agents adopt these digital solutions, they will have to find the balance between technological evolution and one-on-one personal customer service.

The Insurer of the Future – Part 12

Given that the customer of the future wants solutions rather than products, the employee benefits provider of the future will offer a wider range of products, all designed to work together.

Knowing that careers are becoming to be more fragmented (shorter tenure, parallel income streams, the gig economy), the employee benefits provider will also reduce its dependence on employers.

See also: The Insurer of the Future – Part 10  

The employee benefits provider of the future will offer a broad platform with multiple products (not least life, retirement, health, auto and home) open to employees of multiple companies. That doesn’t mean every employer’s scheme will be the same, as there will still be specifics tuned to the desires of individual companies. But all of the core covers will be the same, allowing the benefits provider to leverage massive buying power, securing excellent deals for employers and employees alike.

Because the core benefits are the same across companies, they’re also portable – very helpful in a world where employees hop regularly from job to job. When an employee leaves company A, he or she can port the entire benefits package to company B. If there’s any premium shortfall, the employee can pay that personally. And the employee benefits provider retains the employee as a customer for longer.

But the new proposition goes even further – because the model recognizes the gig economy and is therefore open to one-person businesses such as Uber drivers as well as employees of larger companies. This, of course, further broadens the customer base served by the provider.

See also: 4 Hot Spots for Innovation in Insurance  

In time, workers’ loyalty will perhaps become more focused on their employee benefits provider than on their individual employers – re-positioning this segment of the industry and opening up further opportunities for innovation.

Earlier articles in this series can be found here.

The Insurer of the Future – Part 11

As I indicated in Part 10, I’m expecting the future role of the broker or agent to be severely curtailed. But that’s not to say there’s no role for intermediaries of a different type.

In commercial lines, I expect to see an expansion of the push that some of the brokers have already made into broader risk management. The Risk Manager of the Future will provide a holistic risk management service to its biggest corporate clients – drawing heavily on IoT and big data analytics to predict risks real-time and prevent them from crystallizing.

Only a small part of the risk manager’s service will involve insurance, but the risk placement process will be highly efficient. The risk manager will be seamlessly integrated with a wide network of insurers that, together, can meet all of the insurance needs of clients.

See also: The Insurer of the Future – Part 10  

The risk manager will place business in two ways: standard and bespoke. However, those terms describe the relationship not with clients, but with partner insurers.

If a risk is standard, such as marine or aircraft cover, the Risk Manager of the Future will already have made arrangements to place pre-agreed percentages or exposure bands with a range of different insurers. And those business rules will be built into a “risk placement hub” linked directly into those insurers’ core systems. This means that the risk can be underwritten in accordance with those pre-agreed arrangements, and policy documents generated, in a matter of seconds.

If, on the other hand, the risk doesn’t match previously agreed arrangements, the Risk Manager of the Future‘s “cognitive placement engine” will swing into action. This will pull together all the information it can on the risk, trawling multiple internal and external sources. It will then automatically pass that data to the underwriting systems of multiple different insurers, negotiating pricing with the AI engines of those individual Insurers and constructing the optimum cover for a client — making trade-offs between the different insurers as appropriate.

Again, once the cover package has been designed and placed, policy documents will be generated automatically and issued to the client.

See also: Innovation: ‘Where Do We Start?’  

Using the power of data analytics and AI, this entire process, end-to-end, will take no more than a couple of minutes.

The Insurer of the Future – Part 10

The earlier articles in this series can be found here

Last year, I moved from the U.K. to the U.S. I tried to arrange insurance directly with the brand names I knew best – but it quickly got difficult. I didn’t have a U.S. credit history, I didn’t have a U.S. insurance history, and I’d only just got a U.S. job.

I realized I needed a broker.

See also: How to Support the Agent of the Future  

That broker was Michelle, and she worked wonders for me. She got me the covers I needed, at a good price, at the right insurer for my circumstances. She was thoughtful, courteous and speedy, and I’ve been delighted by her service. As far as I’m concerned, Michelle earned every cent of her commission.

But I never met Michelle. I never even spoke to her. Everything we did, we did by email.

Which got me thinking – how do I know Michelle isn’t an artificial intelligence (AI) system?

For the Insurer of the Future, I think she will be. In the future, there’s nothing Michelle did for me that couldn’t be done by a properly trained, and properly connected, machine. In the Insurer of the Future’s world, human brokers won’t be needed any more.

I can guess what many of you are thinking: “Hah! Let’s see how much he likes a remote machine when his basement floods.” And you’re probably right. In those circumstances, I might indeed want someone to come and (metaphorically) hold my hand.

But if my basement floods, and a real person does turn up, and she tells me her name’s Michelle – won’t that give me what I need?

I think so. If I need a real person, I’ll be happy that a real person turns up. They don’t even need to be an agent or broker – the Insurer of the Future’s on-site claims handler will be fine, thank you very much.

See also: Insurtechs: 10 Super Agents, Power Brokers  

Some tell me I might be right for personal lines, but commercial lines is more complicated. Well, yes – a lot more data will typically need to be located, analyzed and acted upon. But locating, analyzing and acting on data is exactly what machines can usually do better than humans. Which means it’s even more likely that commercial lines brokers will be disappear.

The Insurer of the Future – Part 9

The other entries in this series can be found here.

As we’ve seen in previous parts, the Insurer of the Future will have far fewer employees in pricing and underwriting, in claims, in product development and in the back office.

Overall, therefore, the Insurer of the Future will have far fewer employees per million of premium than its predecessors. Many tasks previously performed by humans will now be delivered by software.

See also: The Key to Digital Innovation Success  

But that means that the remaining humans, fulfilling key strategic and risk management roles, are far more important than they were.

They will have to be the very best professionals available. Their recruitment, training, development and motivation will have to be top-notch.

They’ll need the very best of support to help them be successful.

They’ll have self-help tools at their fingertips, expert systems support, world-class knowledge management capabilities and collaboration tools to ensure they can deliver to their full potential.

They’ll be part of a culture that is dynamic and exciting, in an environment of constant change – and they will relish every minute of it.

Chances are that, on average, they’ll also be significantly better paid.

See also: Where Are All Our Thought Leaders?