At the end of November, I attended the Connected Insurance USA Summit, a conference that brought together hundreds of leaders in insurance to talk about strategies, innovations and the future of the insurance industry.
Conference events were split up into three categories: customer engagement, product development and innovative technology. And a big theme of the conference was the idea of finding better ways to connect all the players in the insurance industry—from carriers to agents to customers.
The conference highlighted a few major shifts that will shape the future of insurance. Here are some trends that independent agents (IAs) should be aware of heading into 2019.
Insurance as a solution, not a product
The reality is that insurance is not top of mind for most consumers. The key to making it more top of mind is presenting customers with insurance as a solution or experience rather than as a product.
There are a few ways this can happen, but it starts with focusing on the customer’s needs and creating more robust touch points with clients. Consumers expect personalized service, so carriers and agents have to think more broadly about what consumers need instead of just selling them a standard product. Focusing on customer needs and communicating well can lead to richer conversations about how to provide solutions that make life simpler for customers.
Current examples of insurance as a solution look like collaborating with other companies to blend a client’s mortgage and home owner’s insurance into one monthly payment. Or it might look like packaging auto insurance in with the monthly cost of buying and maintaining a car. These types of collaborations would make insurance part of an all-in-one solution instead of an irritating additional step for people buying a home or car.
Many conversations at the conference showed that carriers and insurance companies are starting to think this way, and IAs should too. IAs are well positioned to have in-depth conversations about customers’ needs and help them find simple, tailored insurance solutions.
Preventing risk rather than just responding to losses
We’re currently seeing a shift in the insurance paradigm. Insurance is changing from a loss-centric model to a more prediction-centric model—and down the road, we’ll see it shift to a more behavior-centric model as insurers have more data on how consumers operate.
Increasingly, the insurance industry is less about responding to losses and more about proactively anticipating and preventing those losses as much as possible. This is made possible through data provided by new technology and smart devices.
Connected devices in people’s homes and cars can help insurers more accurately assess risk and price policies. And devices can also help prevent or minimize losses from things like water damage, theft, energy use and more. This shift benefits carriers, agents and consumers—no one wants to have a claim.
However, many consumers are still skeptical about this new technology. Independent agents will play a large role in educating customers about IoT technology and how it might impact their insurance policies.
Meeting customers where they are
As all these shifts take place, agents and carriers need to ask how we can meet customers where they are and provide what they need. We also need to ask, “How do we prepare our customers for what’s coming next?”
Consumers now expect digital access and instant service, but they are still slow to adopt things like smart technology and telematics devices. Consumers are often hesitant to share personal data with companies, and they tend to be skeptical of a carrier trying to get them to adopt new technology.
For example, a large carrier recently started using satellite imagery to capture images of policyholders’ homes before and after storms. But when the claims department contacted policyholders about potential damage, the policyholders hung up on them. The customers weren’t expecting that call from their carrier. However, when their local insurance agent called about storm damage, the policyholders took the call.
This is just one example of how critical independent agents are in the process of easing consumers into new technology and streamlining the shift from response to prevention. IAs can help educate customers about the tangible benefits of things like satellite imagery, smart technology, using drones for claims adjustments and more—things that will be essential parts of the future landscape of insurance. Customers are willing to use tech and provide data if they know it will reduce their premiums and benefit them, so IAs can communicate that value.
These changes in insurance will take time, but agents can start preparing their customers now and figuring out where the logical touch points might be as things like smart technology make their way into the insurance space.
As trusted advisors, agents will continue to be key players in the insurance industry and play an essential role in helping make insurance more personalized and relevant in people’s everyday lives.