One of my earliest experiences with insurance technology was helping my dad set up the first computer in his agency when I was a teenager. Using a computer for insurance quotes was very innovative back in 1989.
Never could I have predicted then that 30 years later, my agency, Excalibur Insurance, would be communicating with customers through an AI chatbot and an Amazon Alexa voice search function.
Insurance technology is changing faster than ever. The insurance industry has traditionally been slow to change, but with customers demanding digital services and major companies investing in insurtech, we’re going to see some major shifts in the industry in the next few years.
While there’s no sure way of knowing exactly how things will change in the future, here are a few technology trends I’m watching—and I think all independent insurance agents should keep an eye on, too.
The rise of data and data management platforms
“Internet of things” (IoT) technology is catching on in many areas, producing a wealth of data about how people live, work, drive and manage their homes. IoT data, plus the data gathered as more interactions take place online, can be a gold mine for carriers and agents if they can figure out how to use it.
In the next few years, we will see more insurance companies and agencies hiring data scientists. Agents will start to build data management platforms (DMPs) that will allow them to capture information from all their platforms and systems. This information will allow agents to look at clients’ behavior and start anticipating client needs. It will help agents know how best to communicate with clients, segment marketing materials and retain clients over time.
This is the industry’s blockbuster moment in which agents can control their data. Understanding and managing data is going to be a critical part of every agency’s future.
Better chatbots and AI
We built our 24/7 chatbot at Excalibur a few years ago. Now, we view AIDEN (Artificial Intelligent Digital Excalibur Navigator) as a crucial part of our team. AIDEN can help keep the conversation going when our staff isn’t in the office. She doesn’t take any time off and can handle inquiries from multiple people at the same time. Plus, she documents every interaction.
Right now, AIDEN can only give people real-time answers to about 125 questions, but she’s constantly learning. Chat bots like AIDEN will soon be able to do way more. I anticipate that in a few years, AIDEN will be able to better provide advice and be able to do a lot of things our staff does. That’s not to say she’ll replace our staff, but she’ll be able to handle many routine questions and tasks, freeing our staff up to do more.
It’s important for independent agents to give customers options for how they want to interact with the agency, and chat bots will play a large role in that. As I recently heard someone say, “artificial intelligence will never replace an agent, but agents who use artificial intelligence will replace those who don’t.”
Virtual reality is becoming more readily available to the public. As it does, we may start to see virtual and augmented reality come into the insurance space. Some companies are already starting to use it for safety demonstrations and employee training, but it may have more applications in the future.
For example, imagine if you could take a picture or video of a person’s house, then drop it into a program and watch 20 different scenarios of things that could damage or destroy that home. This use of virtual reality could help simplify risk analysis. Plus, it would be a lot easier to sell insurance when people could see what might happen to their home.
What does this mean for IAs?
In these three areas and others, the insurance industry is ripe for disruption. Insurtech companies are starting to take advantage of these opportunities. But I believe that IAs are in a great position to disrupt the industry because we control the experience.
Just like Airbnb doesn’t own any properties and Uber doesn’t own any taxis, agents and brokers don’t own any insurance companies or policies. We sell policies, and we can make some changes on those products and experiences. If we dial in properly in the next five years, we can be complete difference makers. This means adopting new technology that can improve customer experience, pushing companies to share data and forging connections to drive the industry forward.
The insurance industry will continue to be a business built on relationships. We still live in a human-to-human world, so technology is never going to completely replace agents. But if the advancements in insurance technology can accelerate connections and help us better serve our customers, then they are a win for all of us.