3 Ways IAs Can Keep Their Competitive Edge in a Digital-First World

3 Ways IAs Can Keep Their Competitive Edge in a Digital-First World

Agency Operations, Personal Lines, Technology

One in five consumers say they would use Amazon for insurance. Here’s why that shouldn’t worry IAs.

In a recent survey from J.D. Power, one in five respondents said they would use Amazon or Google for home insurance. The numbers were even higher among millennials, with 33 percent saying they would be interested in getting home insurance through Amazon.

Although neither Amazon nor Google has expressed plans to enter the U.S. insurance market, this kind of news tends to put people in the industry on edge. However, at Liberty Mutual and Safeco, we believe independent agents are uniquely positioned to win with customers—both now and in the future.

Here are a few ways independent agents can prepare now for future competition:

Position IAs as trusted advisors

At Liberty Mutual and Safeco, we’ve repeatedly seen three main things customers look for when buying insurance: ease of use, breadth of offerings, and trusted counsel on which choice best fits individual needs.

Companies like Amazon and Google would offer ease and choice – letting customers easily search and compare prices from a variety of carriers. So if they enter the market, agents selling simply on price beware!

However, comparison sites cannot offer customers the advice they need. As the insurance market becomes more competitive, IAs should position themselves on their competitive advantage as trusted risk advisors; rather than just another method of comparison shopping. They need to show customers why the advice they provide is an important service.

Agents who are able to help clients understand their risk profile holistically and see what kinds of coverage best fit their needs will do leaps and bounds more for customers than Amazon or Google can do.

Build a robust web presence

Modern consumers turn to the internet first when they have questions about insurance. Agents ought to build a significant web presence that is tailored to their specific market area and provides information customers need.

IAs’ online branding should first and foremost present their value proposition as trusted advisors. Agents must also adopt the digital tools that allow the ease of use that direct carriers provide.

In our Agent for the Future™ survey, 60 percent of agents said consumers’ increasing need for online and mobile capabilities will have a major impact on their agency by 2020. However, less than half said they are comfortable with online account management, with 38 percent saying they are only somewhat comfortable with it.

Of course, digital tools like online account management and online quotes have to go hand in hand with advice. At Liberty Mutual and Safeco are developing tools to help agents engage with customers online while maintaining a focus on the agent-customer relationship.

These types of tools enable agents to provide advice in a scalable way—agents can direct customers to the webpage for information, then have more in-depth follow-up conversations to learn about the customer’s unique needs.

Take a more holistic approach

In the J.D. Power survey, 75 percent of people said they are interested in using home telematics to get discounts on insurance for proper home maintenance and security.

Agents are well positioned to advise customers on telematics—in fact, customers may see them as a less biased purveyor of information than carriers or tech companies. And Safeco’s Agent for the Future survey found that 41 percent of agents are comfortable with telematics.

Telematics devices for security, water loss and utility use are just starting to make their way into the home insurance space. In the future, as more customers start using telematics devices in their cars and homes, accidents and losses will get less frequent and less severe, which will drive down premiums in auto and home insurance.

This means that agents need to start diversifying and viewing themselves more as risk advisors than solely home and auto insurers. We at Liberty Mutual and Safeco see this as a growth opportunity for many. As technology advances, there are more and more gray areas where customers need protection. IAs can help people get a more holistic view of risk solutions they should put in place across their lives.

A great example of this kind of gray area opportunity is the customer who has a side-gig as a rideshare driver. An IA can ask the right questions to help the customer get the proper coverage for their particular needs. That’s not something a comparison site like Amazon would be able to do very easily.

If agents can prove their value as advisors, adopt digital tools and take a holistic approach to customer’s insurance needs, they will be well positioned to succeed far into the future—no matter which companies they’re competing against.

Samuel Affolter

Former Senior Director of Research and Innovation

Sam led Agent Research & Innovation discovering and developing new solutions to meet the needs of our agents and their customers. He has analytics and product management experience across a variety of insurance functions including Product, Underwriting, and Marketing. Sam spent 3.5 years at Amazon drinking the customer-centric Koolaid and brings that and an agile-motivated scrappiness with him. During his time at Liberty Mutual, his team piloted over a dozen solutions and scaled several including Safeco’s Pet Insurance and Home Warranty partnerships and being first-to-market with Safeco’s award winning Insurance Advisor skill for Amazon’s Alexa platform.

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Judieth Turner
5 years ago

I started out when agents who owned an agency were Recording Agents and did do more advising and overseeing. Then here in Texas the insurance climate changed and many agencies begin to use the customer care reps to do the quoting of new business and most new insured’s never really talk to the agent. Now there are so many new changes not necessarily to insurance but to lifestyle’s of the insured’s that its important agents wake up and see the need to educate ourselves in these area’s and become educators and advisors to our insured’s again.

4 years ago

Nice Contributions you made there. What happen when you as an agent has gone digital, but the underwriting companies you work with are still analogue?

Sam Affolter
4 years ago

Judieth – Completely agree! I love the concept – that some IAs are already pursuing – of being not simply an insurance agent, but a trusted risk advisor. The value that an agent can bring to the table isn’t simply the lowest price, but the wealth of knowledge about risk management and solutions.

Sam Affolter
4 years ago

Uzoma – Great question! Agents have a tremendous opportunity to create a more customer-oriented, digital-focus for their clients regardless of the carriers they work with. Obviously, that only increases when your carriers have those capabilities too, but there are a number of ways to help yourself without reliance on your carriers. An example would be RocketReferral or BriteBee which can enhance your digital presence, with RocketReferral helping you in the CRM space and BriteBee helping your search ranking. There are a number of other insurance-based startups that can enable your agency to do more for your customers and learn more… Read more »

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