BLOG: Insurance agents lose 50,000 policies

Insurance agents and agencies are being held to a new higher standard related to not only the quality of the client deliverable, but the time consumed in the insurance process, writes Lynne Wallace of NDOI.

Insurance News

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This week's news featured an article about yet another tech company now selling insurance. This one offers a comparative online auto insurance rater and has added "fulfillment" to its revenue stream. This means they are also selling and servicing insurance policies on behalf of the carriers being compared. The company reportedly sold over 50,000 auto insurance policies in the last twelve months...and added "between 7 and 15 percent of the premium price" — what we call "the commission"— to their revenue stream. In addition, the company plans to start selling business insurance to start-ups.

And in health insurance, compliance requirements of the "Affordable Care Act" continue to fuel a tech world firestorm that threatens to put yet another segment of insurance agents out of business.

When the ACA first became reality, the insurance agent community offered "how to" guides, hotlines and Excel calculators to help meet client needs. Yet, almost as soon as the new content hit agency websites, it became apparent that our "traditional" response and support would never keep up with the tracking, categorizing, calculating and report generating needed for ACA compliance. The real and only solution? Technology. And the tech community jumped in not only with online compliance solutions but are grabbing the insurance commissions along with it.

So why did 50,000 people move their existing auto insurance (most likely from independent or captive insurance agents) and place it with a tech company? Why do thousands of business owners transfer their employee benefits insurance to a tech company without changing anything about their insurance plan?

The answer lies in something that is in much higher demand than "a great service relationship" or "incredible rates." Technology is offering our clients a lot more "time" and at often warp speed. It gives consumers the ability to broadly shop their options, meet detailed regulatory requirements, process existing manual workflows, and finalize their insurance purchase, almost instantly.

As a result, insurance agents and agencies are being held to a new higher standard related to not only the quality of the client deliverable, but the time consumed in the insurance process. I am imagining a day when a disclosure on services related to "time consumption" is required in much the same way calories are specified on a candy bar.

So what can independent agents do to take advantage of this accelerating trend?

First, we must implement technology to deliver the next generation of customer service (no wait, no work, totally proactive) and to propel internal agency workflows. If you can't build it, rent the platform(s) you need. And agents working together towards solutions will get there faster than trying to go it alone.

Even your most faithful client will ultimately choose the option that serves them better.

Have a question? Let us know. We are here to help.

Lynne Wallace is the CEO and president of VANTREO Insurance Brokerage and co-founder of NDOI, the National Directory of Insurance.

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