Going Direct: Where Do Agents Stand? Agent Insight Initiative - Winter 2014 Unvarnished Truths From the Battlefields of the P&C Agent
Agent Insight Initiative Agencyport Software s very first office was actually located within an insurance agency. During our earliest software building days, we were able to lean over and ask CSRs what they thought of certain features or capabilities. It was clear from the start that even though we were selling to P&C insurance carriers, building good stuff for their Agents to use meant engaging with and listening to those users a lot. Though we ve long since grown up and moved out of that agency, we ve tried to stay connected to our roots. In 2009, Agencyport took to the streets for a 4-week, van-assisted effort to gather the good, the bad and the ugly about independent P&C Agents work with their Carrier partners. We sought workflow war stories straight from the horse s mouth, and we got them. What we learned has helped guide us and our customers since. Six years later, Agencyport is back on the road, learning what Agents are happy with and frustrated by; what s important to them and what s not; what some Carriers are doing right; and how others are missing the mark. Unlike 2009, however, this effort is more than a snapshot in time. This is the Agent Insight Initiative ongoing and part of the fabric of our business. Why? Because we know that when it comes to your portal experience, Agents know best. As part of the program, we publish regular Agent Insight Reports. While they vary in theme and focus, their mission is consistent: place the Agents Worldview front and center. The Carrier/Agent relationship is complex and fluid, shifting regularly as the Property & Casualty market evolves around both of them. New thinking, issues, challenges and opportunities for both parties are constantly surfacing. We welcome your thinking on the issues we are highlighting as well as ideas you d like us to explore. Jenn Parker Solution Architect/Agent Liaison jenn.parker@agencyport.com
P&C Direct to Consumer Geico, Progressive, Esurance... By now, we re all familiar with carrier ads inviting us online to get our own car or homeowners policy quote. And more and more, companies like Hiscox and others have billboards advertising for small business owners to visit their sites for commercial lines policy needs. As technology improves and consumer expectations around self-service increase, more carriers, both small commercial and personal lines, are experimenting with offering coverage direct to potential policyholders, creating a shift in a market where Agents have historically played a crucial role. Agent Reactions Small business insurance purchased prior to 2011 did not include any online interaction. By comparison, 17% of small business insurance purchased from 2011-2013 involved some digital element. Novarica (June 2013): Direct Online Small Commercial Insurance: Preparing For The Inevitable So, how do independent Agents think this direct trend will affect their traditional carrier relationship? Do they even believe it is a trend or one with serious legs, anyway? Does it spell the end of the long valued Agent channel, or is it an opportunity for Agencies to become more efficient and profitable? Not surprisingly, reactions and opinions vary from line of business to line of business and from Agent to Agent. This range is illustrated well in a 2013 Novarica Report: Direct Online Small Commercial Insurance: Preparing For The Inevitable. At one end of the spectrum are those who see Novarica s view of this direct model s inevitability as a flawed approach. Because they feel that consumers are at risk purchasing complex insurance without Agent expertise, some Agents are unwilling to adapt to changing behaviors. At the other end are those who feel direct can make a lot of sense for everyone involved, especially them. Same Partners, Different Dances After meeting with dozens of Agents over recent months and capturing their insight on these new sales and service developments, it s clear that the direct story is still evolving. For as many Agents who dismiss or fear the direct to consumer shift, there is a growing number who are embracing it taking part in new, creative and mutually beneficial solutions with their carrier partners. More than 30% of Agents in the group believed Direct online sellers will be a significant competitor within 2-3 years. More than 40% believe a significant portion of buyers already start their shopping process online. Novarica (June 2013): Direct Online Small Commercial Insurance: Preparing For The Inevitable So, what are some of the emerging models that allow Agents to continue to bring consultative value and expertise to bear on the process? Consumer-Initiated Quoting Some carriers are beginning to offer direct to consumer portals that allow customers to initiate their quote request online. The carrier then notifies one of their Agencies to follow-up with the potential insured. This model both differentiates the carrier from the competition and lets the Agent connect with the insured to An Agencyport Insight Paper Going Direct www.agencyport.com page 3
validate that the coverages are appropriate, offer consult and, ultimately, bind the policy. The Agent benefits from having business pushed to them and the insured benefits from the Agent s expertise and service during the life of the policy. As long as Agents are being paid a standard commission, they feel strongly positive about this approach. (Figure 1) Credit Union Kiosks One carrier we learned about is installing insurance kiosks in local credit unions that also own insurance Agencies. In this scenario, credit unions working with customers on home or car loans direct these clients to a computer kiosk where they re stepped through an online process of securing the desired insurance coverages. The user experience and underwriting questions are all authored by the credit unions Agencies, guaranteeing the understanding of the new business requests. After the policies are bound, the Agents receive a commission and service the insured going forward. In effect, the kiosks serve as an enhanced sales tool for the Agents. Figure 1: Novarica (June 2013): Direct Online Small Commercial Insurance: Preparing For The Inevitable Carrier Direct via Agencies In some cases, Agencies themselves are offering a carrier s direct option to their customers via their own Agency website. Technically-advanced carriers offer products to consumers through portals themed as Agency websites. Consumers can visit their local Agency online, get a quote, and purchase a policy directly from the carrier. These portals are configuration-based, allowing carriers to offer unique versions to each of their Agency partners without those Agencies needing an IT staff. If the consumer has an issue during the quoting process, they re already within their Agent s website and can easily contact them for help. Most personal and small commercial lines customers will interact with their Agents and carriers across the full range of channels: in-person, through mobile devices, and by phone, Internet and video conference. 2012 McKinsey Auto Insurance Customer Insight Research These carrier-backed Agency sites are not limited to quoting; service functions like billing inquiry and claims notifications can also be offered. Some carrier service centers are set up such that when a policyholder calls with a question or request, the carrier answers the phone as if it were the Agency. Agents are always looking for a web presence that differentiates them from their competition. Carriers who can offer these beneficial features enhance their relationships with Agents rather than strain them. An Agencyport Insight Paper Going Direct www.agencyport.com page 4
Balance and Creativity Ultimately, making direct work for carriers and their Agents is a balancing act. At the center is the new reality that today s insurance buyer/policyholder is increasingly self-sufficient and impatient on one hand, and in need of expert, personal guidance on the other. She expects to be able to use modern technology to do the simple stuff (make a payment, find the appropriate contact at her carrier or Agency, etc.) on her own and in her own time. She also wants to know that she has access to a knowledgeable individual to help guide her through more complex issues if she needs it. Carriers and Agents have to make both possible for her, and ensure their own benefits at the same time. Business needs and key values to each other (and the insured) must be clearly defined. Which tasks are most profitable for each? Which aren t? Where are each party s brands built? Where and how can Agents and carriers drive business to each other? Carrier service centers like the one outlined earlier are a great example of the importance and potential success of this balancing act finding a line that allows a carrier to successfully offer customer service through an Agency without encroaching on the Agent s value (or perceived value) to its customers. Agents don t want customers believing that selling policies is of greater importance to them than servicing the policyholders afterwards, but there are circumstances where carrier involvement can be of great value to an Agency allowing a policyholder to access a certificate of insurance during off hours at an Agency, for example. Creative problem-solving and willingness to think beyond traditional models can be three-way relationship builders for insureds, Agencies and carriers. And in our estimation and that of so many of the Agents we talk with it will be essential for success in the future. Policyholder Insight I moved my policy because the carrier didn t support online payment - MA Personal Auto Policyholder TrustedChoice, a partnership between the Independent Insurance Agents & Brokers of America and a variety of investor carrier companies, is dedicated to recapturing personal and commercial lines insurance for the independent Agency channel through the use of technology. Learn more at www.trustedchoice.com. Agent Insight I don t want to spend my time checking a bill status, especially when my clients want to do this for themselves. I m supportive of carriers helping with this; it gives me more time to quote business - NH-based personal and commercial lines CSR 2014, Agencyport Software. All rights reserved. Reproduction or redistribution strictly prohibited. This report may not be shared without permission from Agencyport. An Agencyport Insight Paper Going Direct www.agencyport.com page 5