The email subject line read “Paper Storm.” It was sent by a 70-something high-networth personal lines client whose commercial account with us generates well over six fi gures in commission revenue. He’s got our attention. Here’s how the message read:
“My dear insurance wizards: In the last few weeks, I have been inundated with mail from our insurance providers [the carriers]. Forms upon forms upon forms. I have never seen so much paper. What am I supposed to do with all of this? It makes me want to seriously consider the possibility of self-insuring. I think I am going to go completely off the grid.” Again, this client is not a 20-yearold inseparable from his smartphone and the cyber world. He’s in his 70s, and he’s in pursuit of a simpler life.
My first thought was, “Someone please tell the carriers to stop ‘helping’ us!” But then I took a moment to refl ect (and calm down). We deployed the quick fix, redirecting the carriers to send all their paper for this client to us, his insurance agents. Now we’re brainstorming a digital WOW to send to our VIP to o set the carrier-generated setback.
The insurance industry is certainly in transition. Insurance consumers want human wisdom and interaction facilitated online by everything that is better served by
technology. However, today, most insurance carriers are still working through a tangle of legacy administration systems (often 30 or more) before they can become digitally easy to do business with.
It’s truly a race where the first out wins. Getting carriers to deliver data and documents digitally and through downloads is critical, but is sometimes like playing
‘Whack-A-Mole’ at the county fair. You get one carrier set up, and someone brings two more on board that are not. It’s about progress, not perfection.
In the meantime, it’s the insurance agents who are playing Wizard of Oz, shifting things manually behind the scenes so that service appears fully digital to clients. And that wizardry is expensive, potentially knocking two to fi ve percentage points o of agency EBITDA.
The good news is that most carriers understand the end game and are asking the right questions. It’s about saving time and saving clicks. It’s also about using third-party data to get information for agents to ‘review’ rather than ‘enter.’
The question is not whether the e ort will be worth it, but how long it will take. Timing is critical. We are slipping in the polls. When asked in a recent survey what industry sectors have the best customer service, insurance came in at the bottom, ranking above only the automotive and utilities sectors.
Improving our customer service ranking as an industry requires that we become strong consumer advocates bringing both insurance expertise and digital solutions.
The challenge is that only a small percentage of insurance people are ready, willing and able to help bridge the gap between traditional and digital insurance.
The traditional model knows insurance. But traditional, as we know it, is not the sustainable model. Many traditional insurance people are aging out and/or are not interested or capable of working digitally in any signifi cant way.
The digital agency understands that tech is the key to excellent customer service and scalable growth, but without deep insurance expertise, the digital agency will continue to bring in new business, only to see it run out the back door.
Whether we realize it or not, as insurance professionals, we have already begun positioning ourselves with regard to our role in the future of the insurance industry. I’d say 50% of insurance people today want to ride out their careers doing things as they’ve always done them and hold on as long as they can. Thirty percent are embracing enough technology to keep their jobs. Two percent are the disruptors who often get beat to a pulp (but we thank them for opening our eyes). Ten percent are the newbies who, once committed to insurance, will morph the industry even further down the road.
The final 8% are today’s early adopters, insurance professionals who are working hard to move the traditional mountains and live the digital insurance dream. They are the few who stand ready to profi t enormously in the next few years.
Lynne Wallace is the CEO and president of VANTREO Insurance Brokerage and VANTREO Insurance Partners, and co-founder of NDOI, the National Directory of Insurance.