If you’ve been paying attention at all over the last few years, you’ve undoubtedly read about, or heard about, or have even seen the rise of the Digital Insurance Agent. I think we can unpack that and really dive into what that means and what it means for you as an independent insurance agency.
Digital Insurance Agent may sound pretentious or grandiose, but really, it’s just taking the insurance agency model and giving it a tech-enabled spin – mostly as it pertains to customer acquisition. In the past few years, you’ve seen this in the personal insurance space, and now it’s starting to permeate the commercial insurance side, specifically the distribution channel.
Today’s Digital Insurance Agents utilize what’s called an API (Application Programming Interface) to connect their application or portal to the insurance carriers’ systems – be it underwriting, policy management, or claims. Those that use the underwriting APIs are able to deliver quotes to users in near-instant time. Usually less than 10 seconds. APIs are an amazing tool that allows you, as an agent, to expand your distribution footprint across the web and in the commercial P&C space. It supports your ability and need to find business owners where they are – whether that’s through partnerships, associations, affiliates, or programs. You are no longer bound by your geographic footprint and instead can take niches that you’ve developed expertise in to drill deep and wide.
So, the question then becomes how do you become a Digital Insurance Agent? You have to build out a user interface and understand the technical nuance that goes into using and connecting to the carrier APIs. It’s a slow (and expensive) process that has required building teams of specialized developers. But all is not lost. Talage has developed the technology, expertise, and tools needed to make the transition a simple process for commercial insurance agents.
Why You Should Be a Digital Insurance Agent
If you’re exploring digital distribution and are asking yourself why is this important, or is it important, there are some things to consider. Digital can be for everyone. But your agency needs the desire and the drive to explore new opportunities and new channels. If you’ve got a book that’s steady and unaffected by technological enhancements, and if your customers like doing business with you the way they always have, then this might not be a fit. However, if those customers have new generations of leadership taking over and are implementing other digital tools, like online banking, in other parts of their operations, finding ways to become a digital insurance agency is probably something you should explore, and at a minimum understand. Digital isn’t going away and the insurance industry is changing.
Benefits of Being Digital
The benefits of being a digital insurance agency are the same as other industries that have adapted to a changing world. Imagine if your business could:
- Service more customers
- Incur less overhead and reduce time-consuming activities
- Provide a more immediate standard service level
What would that do for you and your business? Just as we all check bank account balances and reconcile our books using online platforms, the ability to buy and service insurance policies is rising to the top of business owners’ radars. They trust you, their agent, and they like working with you, but you aren’t available 24/7 (nor do you want to be). The relationship is important, which is why today’s agents have a distinct advantage over the start-up competition. It’s easier for you to get their tech than it is for them to get your relationships. Your ability to build and serve your business relationships is what makes you unique. To improve your relationships and continue growing your business, it’s time to take your business digital.
Being a digital Insurance agency comes with certain advantages regarding distribution and efficiency. Externally, you can focus, like you always have, on partnerships in your community. Always excelled with restaurants or hospitality? Great, use that and expand it! Put a link to your insurance application on the hospitality association or restaurant association website in your state. Do you have partnerships with CPAs or attorneys in your town? Perfect, build a link to those to streamline that process. Have you ever sent out a mail or email campaign to drive traffic? Why not include an application to complete the process of buying insurance right there? Save the prospect a step, and let them buy when they’re comfortable.
Let’s face it, we’ve become a civilization that thrives on instant gratification. Do you want to call Amazon when you need to order paper towels? Of course not. But if there’s a problem you know they’ll pick up the phone. This is the modern financial services model. Self-service, but with experts at the ready. The independent insurance agents across this country are in a unique time and space to cement their future and enhance the value they provide. You have the knowledge, the expertise, the trust, and the relationships – all you need now is the tech to back it up.
Here’s How You Do It
Ready to become a Digital Insurance Agency? You’ve got a few choices.
- You can hire a team of developers and start working with your carrier partners to get access to their APIs or hire consultants to help build it out. You’ll need to do this for every carrier.
- You could become a sub-agent to some of the digital wholesale solutions in the market (head’s up though, some of those are owned by big agencies). That’s certainly faster, but you’ll be splitting commission, and more importantly, you’re going to need to re-think your contingency planning.
- Or you can find a solution that’ll keep your model, commissions, and contingencies in place, and simply give you access to the network of APIs redefining commercial insurance distribution.
InsurTech players have been creeping up, (and sometimes creeping on the agent model) but there are some who truly understand the independent agency channel and understand how critical you are to the businesses and communities you serve and operate in. Find a partner who works with your current work processes and business models. It’s critical that agents keep their independence. And if done correctly, integrating elements of being a digital insurance agent will set you free.