The bricks and mortar insurance broker is transforming. Today, some brokerages look a lot more like Google than an insurance brokerage. They have virtual employees driven by artificial intelligence (AI) who can provide slick and efficient customer service around the clock.
From a customer standpoint, this digital transformation is great because it provides a more holistic and diverse service environment. Consumer preferences are changing, with people of all ages and demographics turning to smart phones and apps to carry out their personal business.
Insurance technology is often spoken of as a threat or disruption to the intermediary channel, but it’s time that perception is “demystified,” according to John Tiene, CEO of Agency Network Exchange (ANE), a network of more than 50 independent agencies in the US.
“There’s a lot written about insurtech, saying it’s going to do this and do that to the industry. In reality, insurtechs are fueling experimentation and the development of technologies that can be taken and applied [by insurance agents],” Tiene told Insurance Business. “Over time, we’ve seen a shift in investment money from insurtechs trying to ‘disrupt’ certain elements of the distribution chain, to insurtechs developing processes that can be used within the distribution chain.
“For example, we’re starting to see significant investment into technology that can support customer service for the broker and client [by opening up more avenues of communication like text, chatbot and so on]. The next big leap will be opening those channels on a 24/7 basis. As AI technology is honed and developed, 24/7 service is going to become available to the broker and it’s going to drive a significant change in terms of how brokerages are organized.”
Technology is also boosting the relationships between carriers and agents. As insurance carriers underpin more of their underwriting processes with technology, they’re creating more efficiency in the insurance distribution chain. Analytics tools are making the process of submitting and quoting business more efficient, which is improving margins for both carriers and brokers.
Insurtech companies like Lemonade have made waves in recent years, but Tiene says brokers shouldn’t be worrying about them, as they’re likely to get snapped up by established insurance organizations who want to apply their technology.
“Technology companies that started out trying to disrupt the production line are realizing that insurance is about more than just making the sale. You’ve got to have the customer service component, the billing component, the claims component – all the elements that make up a complete insurance organization. That’s why we’re seeing investment dollars moving down to specific processes,” Tiene commented.
“These quality insurtech firms that are developing specific processes [are likely to be] purchased by insurers to help them become more efficient within their current models. [As this plays out] my long-term view is that as long as an agent can establish a meaningful relationship with a customer, the broker will always be able to have a very strong and prosperous business.”