"Agents and brokers are dead. Wait. Not so fast"
This anecdote has important message for the insurance industry when it comes to disintermediation; it needs to continue to adapt to stay relevant to their customers and what they want.
The future of work is a hugely relevant topic for an industry built around face-to-face relationships. Insurance is plagued with headlines of ‘AI taking over the world’ and ‘Robo-advisors are here to stay’. However, the commercial insurance space is still dependent on people given the heterogenous nature of the data that needs capturing. Beyond this, clients are still reluctant to insure their businesses via online means, particularly once their business reaches any level of sophistication and complexity.
For insurance brokers, a role still very much exists but given the negative impact the current organisational structure has on client servicing it will likely take on a very different form…
The strategic impact of the fact that the internet has allowed consumers immediate and stress-free access to choice debunks the theory that bigger is better when it comes to the insurance industry. The inability for large insurers to take advantage of their dominant market positions was initially blamed on ‘compliance’ and the ever increasing burden of regulation. The other factor that plays a role is technology. What can insurers do to solve this issue?
"Recognizing agents' role in insurance digitilization"
It isn’t just insurance carriers and insurtechs that are driving the digital insurance movement. A key element of this trend is the evolving roles of agencies. The insurance industry was, and remains, a human-powered social network of agents and brokers, who regularly interact face to face with customers, building relationships, providing product education and being available when needed. As digital technology enters the agency space, this real-life social aspect must be preserved, and any innovations need to be geared toward enhancing and preserving those relationships. “Disruption” is not sought here – instead, it is “delighting.”
That's it for this week's Round Up. Have a great weekend.