Risk Adviser
The Balancing Act

• Dick Lavey
• July 2019
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Over the past five years, the insurance industry has experienced a transformative shift in the way it approaches innovation and digital advancements. The growth of robust digital tools for carriers and agents is rapidly improving customer interactions, self-service capabilities and overall customer satisfaction—and this pace doesn't seem to be slowing down. In fact, Willis Towers Watson reported that in the fourth quarter of 2018 alone, the industry committed $1.6 billion toward insurtech investments.

While these investments were once thought to be more beneficial for direct writers than for carriers and independent insurance agents, it has become clear that is not the case. Digital investments have worked best in support of the independent agency channel, driving a more efficient digital experience for all parties involved, while retaining the expert advice and counsel agents offer.

As the world becomes more connected and more complex, so too are the insurance needs of small and large businesses. So, the need for expert advice is greater than ever. At the same time, customers are doing more research and seeking education online before making purchasing decisions. A recent study by eCommerce Foundation found that 88% of consumers began the purchasing process with online research. The key to success for our industry is to leverage digital tools to drive efficiency while allowing the agency channel to continue to do what it does best—provide guidance and expertise.

The most successful innovation initiatives have combined technology with human expertise and experience to create more of a “digital-assist-digital” model for customers. This is a best-of-both-worlds scenario. Customers get the enhanced digital capabilities they've come to expect while the valued expertise of their trusted agent advisers is readily available, and the agent can quote, bind and issue policies in a more efficient workflow with carriers.

Ideally, new technologies will allow independent agents to stay in their current work environments but bring efficiencies to their workflow, so that they can focus their efforts on providing counsel. This challenges current agency management system providers and carriers to work together. An example of this collaboration is agents being able to access small commercial underwriting appetites from multiple carriers in a single place, and transfer that information from their agency management system into the carrier's point-of-sale system. This helps agents increase speed to quote and improve the customer experience.

As we expand our digital footprint across the industry, we must determine the degree of “assist” that various customer segments require or desire, and then look at how we can make that available to them. Some will want more advice than others, depending on the complexity of their insurance needs. Midsize businesses will most likely require more counsel than a micro-small commercial customer in the digital buying journey. The key is to understand the various customer segmentations and deliver a digital experience that allows customers to choose the level of service desired. Leveraged properly, digital advancements represent a tremendous opportunity and potential for our industry. We have worked hard to increase our digital presence and it's an exciting time for our industry as we are seeing the results of our efforts. Insurance will always be a complex purchase, so it's more important than ever to partner to find innovative ways to leverage technology and drive greater efficiencies while engaging the expertise of independent agents.