The majority of insurance agencies (77 percent) directly attribute their fiscal growth during 2012-2013 to the use of technology, according to a new industry survey.
The survey, conducted by Vertafore at this year’s NetVU (Network of Vertafore Users) conference, was designed to identify the sentiment among insurance agents using technology.
Key findings include:
- Agencies that were once considered small have increased their revenue size in recent years. As a result, they are now categorized as medium-sized agencies.
- Smaller agencies say mobile technology has been beneficial, and data shows they have embraced it more than larger agencies.
“The results of our survey reflect the positive impact that technology is having on the way agents and brokers prospect, conduct and retain business,” said Bruce Winterburn, vice president of industry relations for Vertafore. “As new regulations emerge and business processes change, agents have to adapt and evolve to meet the new demands of their clients.”
Growing Out of a Segment
Medium sized firms (26-75 employees) grew the most in 2012; 28 percent experienced nearly 10 percent to 20 percent growth, while 64 percent grew approximately 2 percent to 10 percent.
Other segments also witnessed growth:
- 23 percent of large agencies (76+ employees) have grown 10 percent to 20 percent and 56 percent have grown 2 percent to 10 percent
- 17 percent of small agencies (1-25 employees) have grown 10 percent to 20 percent and 72 percent have grown 2 percent to 10 percent
Of those medium-sized firms surveyed, nearly a quarter (22 percent) outgrew the small agency segment since 2010 moving into the medium-sized agency segment by 2012. These figures complement the Big “I” 2012 Agency Universe Study which revealed that since 2010, the percentage of small agencies has decreased from 32 percent to 28 percent while the percentage of medium-small agencies has increased from 42 percent to 46 percent.
“As a result of their technology investments, many smaller agencies have had an opportunity to add and manage businesses that they did not previously have the capacity to support,” said Winterburn. “As agencies of all sizes take advantage of tools available to them, new revenue and growth opportunities have emerged.”
Mobile features and functionality continue to play an important role for insurance agencies across the country. The largest number of agencies (47 percent), feel that mobile has helped them grow and evolve alongside their clients, according to the survey. But, 27 percent say it has not helped them grow, while 25 percent are unsure. However an equal amount of large agencies feel that mobile has been a help (40 percent) and a hindrance (40 percent).
“The dichotomy in the large agency sentiment may likely be attributed to the lack of mobile access and training currently available for agents,” said Winterburn. “We see the adoption of mobile usage, by agencies of all sizes, as an opportunity to participate in the technology shift occurring right now within the insurance industry.”
The survey of 157 insurance professionals was conducted in-person by Vertafore at the 2013 NetVu Conference in Grapevine, Texas, on March 7-8, 2013. The survey includes responses from both owners and employees of U.S. based insurance agencies. The margin-of-error for this survey is +/- 7 percentage points for numbers based on the entire sample.