Insurance agents seek digital pivot

In 2017, insurance agents face a crossroads. Long protected by complex regulation, proprietary data and sophisticated underwriting capabilities, the insurance industry has resisted digital disruption. This is no longer the case. Technology is rapidly eroding these former barriers, allowing both nimble start-ups and tenured competitors to harness valuable data enabling better pricing, customized experiences and even automated transactions. While insurance agents report stable — if not increasing — sales, they indicate digital disruption is a growing threat. Moving forward, agents will need to partner with innovative carriers to transform their role in the modern age.

Financial success today, challenges tomorrow

Mintel recently surveyed insurance agents and the resulting data paints a picture of a largely successful workforce. Over 60% of respondents note sales have increased over the past five years, as has consumer interest. But these boons also tell a story of challenges to come. While agents report that consumers age 35-54 make up the largest share of current clients, sales figures show they are failing to connect with younger consumers (age 18-34). This group only makes up an average of just 16% of current business.

Digging into the data, insurance agents identify online resources as their top competitive threat for future growth. This likely indicates stronger consumer confidence in information gathered online — especially within burgeoning younger market segments. Beyond turning to online resources as a common place to start the buying process (regardless of final purchase channel), consumers moved on to consulting advanced tools such as robo-advisers and chatbots. Mintel research on personal finance suggests agent concerns are well-founded as 45% of Millennials believe that advice through websites such as Mint.com or LearnVest is as good as advice from a financial adviser. Interest in innovative and trendy Insurtechs like Lemonade.com and Picwell.com is also on the rise.

Looking toward the future

Insurance agents know their strongest competitive advantage continues to be the very human relationship they offer to the clients they serve. Despite the influx of new technology and slick start-ups, insurance remains complicated and, often, very personal. To date, no company has been able to digitally bridge that divide. Agents can and will still be quite relevant in the digital age, but they cannot do it alone.

Today, more than four in five agents identify themselves as independent. The ability to sell products from a variety of carriers is forcing insurance providers to rethink their agent value proposition in regards to differentiated product offerings, marketing collateral, services and tools. The insurance companies that will be the most successful will be those that empower agents to:

• Compete: Agents want insurers to supply them with relevant, timely information about their clients and their competitors. When asked to rank what type of carrier communications were most valuable, competitive intelligence was the number one request agents report. While the face-to-face experience agents provide is important to many consumers, it is only useful if agents have uniquely helpful insight to share.
• Analyze: Despite perceiving online tools as a competitive threat, many agents see digital technology playing an integral part in their evolving role in the insurance industry. Not surprisingly, web tools and software ranked second on insurance agents’ carrier wish list. The modern insurance agent expects analytics-guided sales tools. And — just like the customers they serve — agents want these capabilities on seamless, mobile-ready digital platforms.
• Sell: When carriers own client servicing (and do it well), agents are free to spend more time doing what they love: selling. Not surprisingly, the number one feature insurance agents look for in a carrier is top-quality customer service, ranking well above sales support, product portfolio, reputation and even compensation. Besides offering the implicit benefit of selling customers sound products, agents look to partner with insurance companies that will ease their own operational burden. Instead of being bogged down by paperwork and protracted underwriting, insurance agents can move further into the customer advocate space.

Mintel Comperemedia’s Insurance Agent Survey provides a snapshot of the data collected from an online survey of 745 insurance providers in the life, health and property/casualty sectors and the many crossroads agents face in the digital age. Topics covered include: challenges faced by insurance producers, carrier relationships, marketing behavior and future market outlook. For more information, please contact your Comperemedia account manager or visit mintel.com/mintel-comperemedia.

Caitlin Moling is the Director of Insights, Insurance for Mintel Comperemedia. She combines her deep knowledge of the complex insurance industry with consumer research, industry trends and competitive marketing intelligence to build timely and meaningful stories for Mintel’s insurance clients. As a part of her role as a thought leader for insurance, Caitlin travels throughout the US and Canada to present insurance marketing trends and insights to major industry stakeholders.