A new study shows that insurance agencies that use technology in sales and marketing, managing customer relationships and other sales processes sell up to 43 percent more policies per producer than agencies that rely less heavily on technology. And the gap between agencies that use technology extensively and those that do not is widening.
Those are just some of the findings of “The State of Techsurance 2015,” released by Texas-based Insurance Technologies Corporation (ITC), which develops marketing, rating and management products for the insurance industry, and Velocify, a sales acceleration software company based in California.
ITC President Laird Rixford said ITC and Velocify “offer complementary products that help agencies grow.” In discussions between the two companies they realized both were observing that agencies with significant investments in technology and are committed to the implementation of that technology were those that were experiencing growth in sales and revenue.
The companies decided to put those observations to the test. They surveyed more than 1,000 firms for their study of the effectiveness of technology in agencies’ sales and management processes.
The 20-question survey focused on six key technologies widely used by agencies today:
- Marketing Automation Software
- Lead Management Software
- Automated Dialers
- Comparative Raters (Rating Engines)
- Agency Management Systems
- Customer Relationship Management (CRM) Software
Velocify Director of Research Jorge Jeffrey said the companies relied on agency contacts from both ITC and Velocify, as well as contacts provided by the National Alliance for Insurance Education and Research in conducting the survey. Agencies of all sizes and types — independents, directs and captive — as well as some carrier personnel were represented in the survey.
“It was really an extensive survey. We had over a thousand people complete the survey,” he said.
Jeffrey, the primary analyst of the survey results, said the survey responses and the data did show that there are significant revenue and productivity gains from the implementation and use of technology.
“One interesting finding that we hadn’t initially thought about was this widening of the technology gap. … Larger agents used technology more. Directs tend to be higher users and companies that had higher growth tend to be using technology more,” Jeffrey said.
Questioned about their future use of technology, “those same three groups were the ones that told us they had plans to increase investment in technology more significantly than the ones who weren’t using it,” Jeffrey said.
“This widening gap is important for everyone to be aware of because the more it widens, the more difficult it might be for those who aren’t adopting technology to stay competitive,” he said.
Still, it’s not too late for those that aren’t using technology extensively to catch up, he said.
“The big takeaway from this as well is there is definitely still a lot of opportunity to capitalize on the technology. So even though some larger agencies and the directs are using it to a wider extent than the others it doesn’t mean that it’s too late,” Jeffrey said.
Other key findings of the study identified by ITC and Velocify include:
- Direct-to-consumer agencies and agencies with more than 100 employees lead the industry in current technology use and planned technology investments
- Though the greatest gains went to larger, direct agencies, agencies of all types and sizes saw greater revenue and productivity as technology usage increased
- Several sales and marketing technologies that proved most effective still saw relatively low usage rates
The question of why agencies are not using technology or are not using it extensively was not asked on the survey. But ITC’s Rixford said there a couple of reasons “why people do not use technology or do not use technology to its fullest. The first is they are afraid of the cost. The cost of the implementation goes much farther than the buying of the software or the solution and putting it in your office.”
You have to train your employees, make sure that they adopt it and maintain that adoption and not let its usage fall, Rixford said.
“One of the things that this survey showed was that while there might be an upfront cost, the return that you are going to get from it goes much further beyond just the ability to sell more policies. It also includes the ability to retain more business, to cross-sell more business. All of those factors add up to being able to pay for this product outright,” he said.
Secondly, Rixford said, some agencies that have purchased the products and implemented them don’t actually use them because they don’t establish an agency-wide process that is essential for taking full advantage of the technology.
“They don’t implement them long term. … They don’t have a process that verifies that they use them consistently throughout the workflow,” he said.
The most important practice in assuring successful use of technology in the agency is maintaining the oversight at a management or ownership level, Rixford said.
“It’s critical to have a system like a lead management system that is verifying that you’re hitting the checkpoints at each point in the process,” he said.
https://www.scribd.com/doc/268858706/The-State-of-Techsurance
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