The Changing Role of Insurance Agents

AM Best reported recently that the CEO of a top-five personal lines insurer made the following comment at an investor conference:

“Three-quarters of the service work local agents handle can be done faster, cheaper, and better through a centralized, integrated service organization [the company] is building,” said the CEO, noting that, “eventually computers will replace people in this service group.”

These comments will likely drive many executive leadership teams and boards of directors to revisit their distribution and customer experience strategies. When carriers with significant market share make bold statements about products, pricing, services, or distribution, it often creates a ripple effect. Regardless of whether they believe in this future-state scenario, carriers of all sizes should reflect on the future of insurance and the role of the agent in their digital strategy.

Being an agent is not easy. Their partner carriers are constantly pushing for new, profitable growth, and their clients are seeking the best price and service. Agents are in the middle, navigating the field of play as a trusted advisor between these relationships while trying to grow their business, demonstrate value and relevance, and develop new, meaningful relationships.

New business sales are what every insurance carrier and agent are seeking, and that is where people’s energy should be focused. If servicing can be made easy using technology, it allows more time for sales—so both the carrier and agent win. Great agencies have a sales culture and the capacity to win new customers, and culture is an important asset for any organization. Carriers that are able to harness the strengths of high-performing agencies and surround them with products, technology, and services that enhance the customer experience are likely to have the greatest success. Sales production has been the primary method of measuring success in agent-carrier relationships, and it will continue to be at the center of all conversations related to digital transformations within the agent channel.

Carriers and agents can embrace many techniques to reduce service demands and increase the capacity for sales focus and growth. Here are just a few ideas.

  • Enable customer self-service at the time of sale and each service experience. For years, insurance carriers have been actively investing in and deploying customer self-service portals and mobile apps. Unfortunately, many carriers initially overlooked the agent experience for delivering these offerings and focused more on getting a customer app or portal to market. Greater involvement by the agent to educate the consumer at the time of sale (or renewal) on the value of carrier self-service capabilities can save everyone time.
  • Automate transactional activities with natural language processing (NLP) and robotic process automation (RPA). Improvements in NLP and RPA technology can help carriers streamline common service transactions. Most carriers have adopted some form of RPA to gain internal efficiencies in underwriting and claims workflows, but few have evaluated agent or CSR workflows with the same intent. Enhanced NLP capabilities will allow agents to process PDF and scanned documents more effectively by automating administrative tasks and simplifying data entry into agency management systems, comparative raters, carrier portals, or systems of engagement.
  • Utilize cyborgs to enhance customer experience while improving efficiencies for agency staff. Rather than focusing on replacing the agents with robots, carriers are likely to find greater success by providing agents with capabilities that allow them to be a more effective trusted advisor. Humans are still best at communicating with humans, and cyborgs are proving more effective at creating a positive customer experience than chatbots. Chat with AI can augment sales and service experiences with insights that enhance the customer or claimant experience.

Each of these tactics offers an opportunity to enhance the customer experience and free up agent capacity. However, for carriers and agents to actually operationalize these kinds of capabilities, they will have to let go of the past and likely redefine the framework of their operating relationship for the future.

How do you prepare your distributors, and your organization, for that change?

  • Culture is one of the most important competitive assets for any organization, so innovate with the intent to develop the culture first. All too often organizations embrace the call to be innovative by setting a short-term financial goal and then labeling their tactics for achieving the goal as a form of innovation. Companies will find greater long-term success by focusing on the development of their culture before tying innovation outcomes to short-term financial goals. A CIO who focuses on the rate at which their team can deliver an MVP is likely to have greater long-term success than one who measures the company’s ability to achieve their premium goals for the current year.
  • Be selective when experimenting with distribution partners. Not all agents and brokers are ready for the changes an organization has planned. Onboarding a select group of distribution partners before starting the journey can be helpful in transforming the rest of the channel longer term. Invest in these early adopters—their time and perspective are vital to the success of your transformational journey. Operationalizing AI, chatbots, or cyborgs into the distribution channel or customer experience will require communication with agents. Early feedback from agents as part of ongoing development cycles will pay off.
  • Ensure that every member of the team, including distribution partners, understands the reasons for change is critical to achieving long-term transformational success. Agents are more likely to follow companies that communicate a vision of how technology will influence their working relationship. Developing a clear strategy, roadmap, and corporate communication plan that all parties can refer to is critical to sustaining a consistent, transparent message.

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