In today’s age, you either evolve with the times or risk going extinct, and the insurance industry is feeling the pressure to adapt with technologies aimed at elevating the consumer experience and simplifying company processes. For some, new, innovative ideas cause “disruption” to the status quo, jeopardizing the very essence of insurance business.
“Now, I’m not a fan of calling it a disruption as I don’t think that it’s a true disruption,” says Laird Rixford, president at Insurance Technologies Corporation (ITC). “I think of it as an evolution. But for all the words and talk about disruption at InsureTech Connect, there isn’t much talk about the independent agent channel and what it should do to adapt to the changes in the industry.”
So, what exactly is disruption?
For Rixford, disruption is about engagement, about ease of use and about data– are you reaching prospects through 20th century means or by 21st century channels? Does your agency technology make it easy for producers to connect with clients and vice versa? What is your client mortality rate?
“On mobile alone, YouTube reaches more 18- to 49-year-olds than any TV network, broadcast or cable. Yet, agents still spend money advertising with companies who were once yellow pages,” he says. “[Also] technology that is user friendly and allows the producer to focus on the client is key.”
In addition, having tools that measure all types of data about an agency, from cost per acquisition and how fast you respond to prospects to the average time a client stays a client, are critical to measure.
“Remember, since insurance is a relationship business, the most important things to measure have to do with the relationship itself,” Rixford says.
- How much does it cost to start a relationship? This is your acquisition cost.
- How long do you keep a relationship? This is your client mortality rate.
- How fast are you reaching out to your prospects?
- How often do you communicate with your clients?
- Does the message you send resonate with your audience? You can measure the click-through-to-open rate of your email marketing efforts for all of this.
- How much revenue does each relationship bring the agency?
“Insurance will always be a relationship business, no matter how many times ads on TV or YouTube try to make it a commodity. If you want to stay relevant and continue to have the value, adapt how you engage clients. Update the way they can connect with you. Upgrade the information you use to analyze the value of your relationships. This is how you, as an independent agent, can evolve with the changes that are happening in the industry around you instead of being disrupted,” he concludes.