As predicted in the last Tech Talk column, there is reason to cheer a bit about the findings of the just-released 2018 Insurance Digital Transformation Study. Clear progress has been made as agents work toward mastery of digital technology to improve customer satisfaction, grow business and increase profitability. While this progress is encouraging, it does not match the speed with which the digital landscape is changing. This technology gap will grow wider if agents do not step up their game and the result will be more lost business, including current clients.
The report, published by The Insurance Digital Revolution, an industry campaign organized by IIABA’s Agents Council for Technology (ACT), Associations & User Groups Information Exchange (AUGIE), and the PIA to drive adoption of digital technology, found that 95 percent of the agencies responding (1,970 in total) consider digital technologies “important” or “very important” to their businesses. This is a dramatic improvement compared to the 58 percent that reported digital technologies are “important” or “very important” in the 2016 study.
While independent agencies appear to be taking today’s digital challenge seriously, some are not taking effective action to tackle this challenge.
The recently released study, available at www.insurance digitalrevolution.org, illustrates just how far agencies still need to go. Here are a few key findings from the study:
- 67 percent of agencies offer e-signature, up from 54 percent in 2016. Some agents don’t offer it because all their carriers are not set up for it.
- 41 percent of agents report their websites allow prospects to get quotes — up from 20 percent in 2016.
- Only 7 percent of agents say their websites are excellent, down slightly from the 2016 survey, where 33 percent rated their websites as good, and 36 percent average.
- 57 percent report getting leads from their websites, and most (83 percent) get between one to 10 leads per month.
- 74 percent of agents use social media, dominated by Facebook (98 percent) and LinkedIn (58 percent). Some 39 percent say they are getting leads from social media.
- 39 percent of agents provide a web-based portal for clients, up from 23 percent in 2016.
These findings represent a mixed bag. Progress in social media activity and lead generation is steady but not dramatic. The report acknowledges the roadblocks in the use of digital tools, including cost (59 percent), educating the team on new technology (55 percent), time required to implement new technology (48 percent), and staff commitment to use the new workflow (43 percent).
Perhaps of more concern are three red flag findings:
- 76 percent of agencies do not provide any mobile applications for clients; 19 percent offer mobile apps, and of those they display ID cards (80 percent), report claims (76 percent), request policy changes (59 percent).
- Only 18 percent say they operate 24/7.
- 89 percent of agents do not have live chat capabilities from their websites.
These three findings suggest that most agents do not recognize the degree to which the marketplace is changing and that their failure to adapt poses long-lasting consequences.
Consumers prize convenience. Agencies that facilitate 24/7 contact gain a big competitive advantage. Conversely, agents who tell clients to “leave a message” or “call the carrier” after-hours are pushing business away needlessly. Messaging has replaced voice conversations when the goal is transactional. Millennials also operate on a “10-minute rule,” that is they will move on if a brand cannot provide the answers they need in that timeframe. The right insurance can be sold like a loaf of bread. However, agents who work to be as responsive and convenient as possible will thrive.
Some agents say that Millennials do not make up an important part of their book. Keep in mind that Millenials will become the No. 1 buying group in the next year or two. Agents who have older clients with children and expect referrals because “we’ve been serving the family for 20 years” may be sorely disappointed.
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