Is your agency adding friction to the insurance distribution channel?

August 5, 2020 /

Customer expectations in a modern age

Times are changing. Technology is modernizing. Expectations are growing.

Because of an evolved customer expectation, the industry is trying to stay ahead, with innovations in areas like personalization, data, and digitization. Trends like these are shaping the way insurance works in 2020.

And consumers are loving it.

“Customer expectations for chat response times are higher than they are with email — the average wait time for chat is 45 seconds.”

More than 6 out of 10 U.S. consumers say that their go-to channel for simple inquiries is a digital self-serve tool (such as a website, mobile app, voice response system or online chat).”

The distribution channel

Despite the innovations in technology and changing customer expectations regarding insurance, there is still headway to be made.

The distribution channel, while it has treated independent agents well in the past, is hardly as frictionless as it should be. Routine processes such as quoting and renewing can sometimes take weeks. Add the inevitability of navigating new risks and coverages onto this lengthy process, and your clients may already be looking elsewhere for their coverage needs. These processes just don’t meet modern expectations, and agents who have not adapted to a more digital, modern world, are frustrated with losing customers.

But this doesn’t have to be your agency’s reality. There has to be a simpler, more automated way.

The gap between agents and carriers

Agents are the helpful and dependable bridge between client and carrier. And to ultimately get clients the information they need, agents often work with multiple carriers. But receiving and comparing quotes manually can take tons of time.

Take the typical car insurance process. A customer needs a quote from an agent, so the agent gathers as much information as possible and relays this information to the carrier. The only thing to do now is wait, sometimes for days or even weeks, to hear back from the carrier. By this time, the client may have already lost patience and moved on to receive more efficient service, like with captive agents or direct writers.

If your agency works with multiple carriers, this process can waste valuable time. In fact, the Big I’s 2018 Agency Universe Study states that the average number of carriers that agents worked with was 16.4. Imagine trying to be efficient while getting quotes and comparing them manually from 16 different carriers at once.

In a time when clients expect and often receive nearly instantaneous information or media from other services, the insurance distribution channel is no exception.

Shouldn’t this process be faster? Actually, it can be.

Be a more effective bridge

Clients expect nothing less than the right coverage at the right price, without waiting weeks—or even days—to get it. This means your agency must be connected to your carriers through technology that speaks the same language. This makes it easier to receive and compare rates with just a few clicks of a button, and without having to wait weeks to receive the information.

Your agency can deliver these results by utilizing software to provide quick coverage at the best price and bridge the connectivity gap between agents and carriers.

Unfamiliar risks and times of uncertainty

Another hiccup in the independent agency channel is the unexpected—during times of uncertainty, new risks and coverages pop up in the insurance industry frequently. This leaves your agency vulnerable to out-of-date information and can deprive your clients of the coverage they need.

For example, the coronavirus pandemic sparked changes to business interruption insurance, workers’ compensation, and personal auto lines. Without proper industry data or insights on new risks, commercial insurance got messy, and clients were severely underserviced.

Among these problems, having dependable data to drive your agency’s decisions is paramount; your agents are the valuable glue holding the relationship with clients together, and making informed decisions based on data and insights can only help this.

Cover your clients no matter what

Uncertainty can bring opportunity. Expanding into new lines of business can mean more short-term and long-term business and that your clients are properly insured. Your agents will have more opportunity to cross-sell and foster client relationships with advice from clean data and insights; when your client needs coverage in a new industry, geography, or simply additional coverage, boom, you’ve got them.

Is your agency causing friction?

Think about the way your agency interacts with clients as well as carriers.

  • Are routine processes like quoting, comparing, and renewing costing you time, clients, and therefore money?
  • Are you connected with your carrier with technology that can compare rates in minutes, rather than days?
  • Do you have insight into your business? Are you able to identify what’s working and what’s not working?
  • Do you know how to properly use data and insights to your and your clients’ advantage?
  • Is change in the world or the industry holding your agency back from keeping clients covered and happy?

The solution 

The distribution channel functions to drive information from carrier to agent to client. However, at its core, it lacks a usability that has become more and more necessary with modern expectations. Agencies today can access the tools to bridge that inefficient gap and stay up to date on risks and coverages to not only cover clients’ base needs quickly and efficiently but also anticipate other areas of coverage they might be missing. Agencies that arm themselves with solutions that automate and simplify the distribution channel can cut quote and renewal time drastically, while proactively advising on new and changing risks for the end-insured. Becoming a prepared and knowledgeable advisor with knowledge and insights will increase your agency’s value while fostering overall growth and modernization.