Over the past few years, dire predictions about the independent agent’s future have gotten a lot of attention. With consumers increasingly adopting the latest technology-driven shopping and buying behaviors, some industry observers have questioned whether the independent agent will be able to remain relevant.
But new research suggests that the independent agent is uniquely positioned to win with the biggest and increasingly influential segment of consumers.
Generation Y (those consumers now aged 19-35) is the only growing generation among U.S. adult consumers. By 2030 they will constitute more than one-third of adults in this country, and they will remain the largest generation until 2042. Their needs and preferences will be important drivers in the insurance marketplace for the next 27 years — the rest of my career and most likely yours, too. Having grown up with digital devices and always-on connectivity, these “digital natives” are generally assumed to prefer online shopping over human contact. But do they really want to buy and manage insurance coverage with their thumbs?
Survey says … maybe not.
In a May 2015 research study commissioned by Safeco Insurance, 31 percent of Generation Y consumers placed themselves in a segment that values independent advice, choice among insurance companies, an expert advocate, and ease of understanding their insurance options.
Somewhat surprisingly, this proportion is higher than that found among Generation X (24 percent), Baby Boomers (23 percent) and Seniors (18 percent).
The implication: as Generation Y continues to grow into the insurance marketplace, independent agents will see an increase in the share of consumers preferring their unique value proposition of ease, choice and advice:
- Provide tools that make it easy to understand, buy and manage coverage.
- Provide the widest possible array of options to meet policyholders’ specific needs.
- Share your expertise and advocacy to help policyholders make the best decisions about their coverage.
Each channel that sells insurance has its own strengths.
Direct-to-consumer carriers often provide easy transactions for pre-packaged products. Comparison websites provide choice between the products of different companies and online transactions. And consumers can get a range of advice and access to online tools through exclusive agents.
But only the independent agent offers ease, choice and advice — a unique combination with the power to attract today’s consumers, especially Generation Y.
On the “ease” front, the good news is that it is easier and cheaper than ever to deploy the online tools demanded by Millennials. Today any business can stand up a mobile-ready website that supports e-commerce in a few days, with only a modest budget and no technical expertise. All agents need to be active online with their own web and mobile capabilities and through industry portals like TrustedChoice.com.
The other good news is that you can use the newest tools of engagement effectively in just a few minutes per day.
“You can do 15 minutes a day and just keep having things posted,” says Angelyn Truetel Zarange of SouthGroup Insurance in Biloxi, Miss., who uses Facebook to share information relevant to the agency’s 3,000 followers across the Gulf Coast community. “You can do something different every day. You can check your stats one day, do a blog one day, you can Facebook one day, LinkedIn one day, Twitter one day. And it’s doing the ‘different’ things that tend to pull you up and increase your visibility.”
There has been a lot of industry talk about “adapting to 21st-century customer expectations” and what the “agent of the future” will look like. This conversation is both healthy and useful, but there’s one fundamental problem with the premise: “agent of the future” sounds like someone who hasn’t arrived yet — someone who exists only in our collective imagination. But agents like Angelyn are thriving in today’s climate, and are poised to continue thriving as the market evolves. She is an agent of today, an agent for the future.
Angelyn isn’t alone, not by a longshot. There are countless others like her, a legion of independent agents who are playing to their unique strength — the combination of ease, choice and advice — while embracing the new rules and tools of engagement.
And now we know… that’s exactly what the rising generation of customers will prefer.
Nickerson is president of Safeco Insurance. He has been with Safeco since September 2008, formerly serving as chief operating officer. Nickerson has more than 28 years of industry experience serving previously with Liberty Mutual Insurance.