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People have been forecasting the death of the insurance broker for more than 30 years. And yet, the resilient intermediaries remain alive and strong in today’s challenging insurance backdrop.
If an insurance shopper goes online to research a new homeowners’ policy, does that mean they’re going to bypass the broker? Not necessarily, no.
If an insurance carrier asks for a client’s cell phone number so they can text them important billing information and reminders, does that mean the carrier’s going to ditch the broker and go direct? Again, the answer is: not necessarily, no.
“The great thing about technology is that it cannot be stopped. Those that have tried to stop it have failed. A broker who tries to control everything will quickly start to lose control. But brokers, independent agents and insurance carriers can work together to ensure that technology is leveraged in the right way to better serve the agent and policyholder control is maintained,” said Aaron Franz, vice president and head of strategy at American Modern Insurance Group.
“Brokers and independent agents need to have a certain level of trust in their carrier partners and clientele if they want to survive and thrive today,” he added. “They need to trust in carriers to provide customer-centric technological innovation and self-service tools, so brokers can focus on what matters most to them and the policyholder.”
Human interaction is the key value proposition for the insurance broker. Delivering products with expertise, concern and integrity will never become irrelevant. It’s also a value proposition that can “never truly be digitized,” according to Franz.
However, the way the policyholder likes to conduct business is changing. There are more and more ROPO customers (Research Online, Purchase Offline) who are conducting independent research but then going to the human agent to buy the policy and ensure they’re doing everything correctly.
“It’s ironic that as more and more information becomes available to the consumer at the click of a button, the agent’s advisory role actually grows in importance,” Franz told Insurance Business. “Even though the information is easy to access, it’s not necessarily easy to understand, and this is where the broker’s explanation and emotional support really comes into play.
“But brokers must meet consumers where they want to be met. They need to see technology as an enabler, which not only allows consumers to shop in the way they want, but also allows the broker to focus on their most valuable proposition.”
