COVID-19 has changed many things in the insurance industry. Seemingly overnight everyone is working from home and the companies with the best digital customer experiences have the advantage.
Yet, commercial lines insurance has a long way to go when it comes to digital transformation. Services like instant quoting and binding, on-demand access to policy information and mobile claims are all features that can improve the insurance customer experience, but they haven’t all received enough attention when it comes to creating an excellent digital experience.
Some of the lag may be due to resource constraints. Some may be due to the complexity of legacy systems. And some may be due to the complexity of the industry, particularly for carriers that focus on distributing through agents and brokers where they don’t control the customer experience end-to-end.
But the pandemic has raised the stakes. Carriers and agents need to be able to do much, if not all, of the following: market, sell, bind and service commercial lines insurance online.
So, how do they get there quickly?That’s where insurtechs come in.
The idea of partnering with insurtechs has been around for several years. But it’s about to accelerate—driven in part by carriers’ need to rapidly add digital capabilities that can drive growth and solve problems. Other benefits for carriers include:
- Immediate access to inclusive technology.
Automated quoting solutions, lead generators and analytics analysis can take years and a hefty budget for carriers to develop internally. And a carrier’s standalone solution doesn’t necessarily benefit the independent agent who represents multiple carriers and would still need to access individual carrier systems to complete transactions. With inclusive insurtech solutions, carriers can give agents access to tools right away, with information all in one place, streamlining agents’ workflows.
- Getting the benefit of an expanded team of talent.
Partnerships give carriers access to talent with unique perspectives and skills. For example, an insurtech might have a leader specializing in analyzing data and could help identify new business areas or target populations for the carrier.
- The ability to compete in more new business.
Traditionally, agents have had to go to individual carrier sites to get quotes and process new business. This is time-consuming, and often agents go to the carriers they know will have competitive premiums. The problem is that carriers’ appetites change, especially in the current market. Working with insurtechs that deliver comparative rating and the ability to assess carrier appetite in real time can provide much larger market opportunities for the carriers.
This is something one of our carrier partners experienced firsthand. The insurer was ignored by an agency because the agency had a perception from many years ago that the carrier did not have competitive pricing or coverage. But once that agency started using a comparative rating solution that included the carrier’s products, they found that the carrier did actually have competitive premiums as well as a modern product offering. The carrier has seen a significant increase in policies with that agency.
- Becoming a carrier of choice with agents.
According to the 2019 JD Power Independent Agent Satisfaction study, independent agents’ overall satisfaction with both personal lines and commercial lines carriers is low, with personal lines ranking 735 (on a 1,000-point scale) and commercial ranking 720. In fact, carriers received the lowest overall satisfaction scores for any JD Power business study, even ranking lower than financial advisers (737). But the research also found that the more satisfaction an independent agent has with a carrier, the more likely they are to place business with them.\
Partnering with insurtechs can give agents access to solutions that make it easier to serve their clients and provide a better overall customer experience. Agents will be more likely to prioritize those carriers that are working to eliminate re-keying and manual entry, allowing them to get information to the customer quicker.
The Risk Is Minimal
Many insurtechs that serve the agency distribution channel market to the agents. But they need the carriers to partner with them so agents can access the information to serve clients. For a number of platforms, there is no cost to carriers to partner with the vendor, and the setup from the carrier’s side requires little effort.
There are all types of insurtechs—and they don’t all provide solutions that benefit carriers and strengthen the agency distribution channel. It’s important to seek partnerships that provide real value. Insurtechs that enable quoting, provide data, assess claim information and increase automation all offer great potential. The right carrier-insurtech partnership can create a triple threat: a win for agents, a win for insurtechs and a win for carriers. Agents will be able to provide the service customers demand. Insurtechs will have a larger base of carriers improving their product. And carriers will have access to new market opportunities that will help them grow their business.
This article originally appeared in Carrier Management Magazine, Wells Media’s publication for the P/C insurance C-suite.
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