This post is part of a series sponsored by Insurance Technologies Corporation (ITC).
Google’s entry into insurance lead generation and aggregation worried agents and carriers. Would Google disrupt the industry as they do to so many other industries? Would they short circuit research-driven consumers by dominating the top results? The industry’s concern about Google Compare was legitimate.
Then a year ago, Google abruptly announced they would be exiting the market one short month later. The industry sighed a collective relief amidst high fives and a symphony of I-told-you-so.
A multitude of articles came out about their exit. Each one detailing two main points. Why Google decided to pack it in. And, why the industry should take notice of real change that was taking place. A change in consumer research and purchasing habits.
Why did Google decide to enter the market?
Over the past few years, consumers’ habits have changed. According to the last five comScore reports, more and more shoppers are researching insurance online. And, the number of people requesting more information or actually buying online continues to increase.
Google attempted to capitalize on this change. They touted study after study that consumers are willing and able to buy a policy online. But before, and after, their exit, there were other players noticing the same trend. And, guess what? They are still around.
What has happened since?
On the surface it looks like little has changed in the year since Google Compare’s exit. Dig a little deeper, and you will find that there has been a flurry of changes in and around the industry.
The most notable being the billions of dollars coming into the industry to chase connected consumers. This includes a $192 million investment in MetroMile by investor Mark Cuban. (Coincidentally Cuban also invested $17 million in The Zebra in 2016.) A $34 million B round of funding for Lemonade. Also, Hippo raised $14 million and ACE’s $33 million investment in Coverhound.
The majority of these investments took place in 2016. The fruits of these investments should become public soon, if not already.
These insurtech capitalizations are just a few of the many investments in our industry. The firms that have and continue to invest in insurtech are investing significantly more money than Google did.
And, it’s not just auto insurance. These investments are also driving new startup firms into homeowners, personal article policies, commercial and cyber liability.
Last October a conference called InsureTech Connect highlighted this movement. Startups, venture capital firms, private equity firms, and carriers attended the event. Traditional insurance agents and the technology vendors that serve them were surprisingly absent.
The topics at the event covered the broad spectrum of insurance and included every line of business. The majority of breakouts focused on technology and automating the agent of tomorrow. As in, replacing the agent of today.
How are carriers reacting?
Lead generators and aggregators are changing the normal flow of new business. They are doing this through the redirection of consumers away from traditional agents. And, they are starting to offer insurance coverage through new and unique ways. Think pay as you go insurance. Or, instant claim service using artificial intelligence driven chat bots.
Carriers have taken notice. Their eyes are open, and they are monitoring the changing landscape. They are beefing up their investment in technology and opening direct call centers. They are even revamping their products to match the wants of today’s insureds.
Are the agents adapting fast enough?
In the past few years, many agents have buried their heads in the sand. For many it continues to be business as usual. Or, they’re shifting their primary offering from personal lines to commercial.
Others have recognized the need for fundamental change for themselves.
These adaptive agents have been open to the changing landscape. They are finding ways to compete by changing their status quo mindset.
They are transforming their agencies into a sales-based culture. They use technology, such as comparative rating and automated agency marketing systems, to make it easy to do business with them. They are providing the quick, versatile buying and service experience consumers are demanding.
More than that, these agents are providing more value. They are updating their processes away from policy management. Instead, they are focusing on nurturing the complete client relationship.
Most importantly, these adapting agents are hungry for knowledge. They keep in touch with the latest trends and attend shows such as InsureTech Connect. Speaking of which, the few agents who were at the show are ones whom I know are forward thinking and, thus, are growing.
What does the future hold?
Investment in insurance and its subsequent technology is showing no signs of slowing.
Will we see players leave the market as Google did? Sure. Will we see others succeed? Absolutely. The industry can no longer hold out hope that these new players will wither away and die. Too much has been invested in it.
Finally, we must not mistake the real driver of this new way of thinking … the modern insurance buyer. They are the ones asking for and using these new ways to research and purchase insurance. You have to be ready to answer.