Technology is changing the relationship between the client, producer, and the insurance carrier. While some view that as a detriment to producers, others see room for adaptation and growth that will ultimately benefit consumers, independent agents and carriers.
The servicing and purchasing relationship between agents and brokers and their clients has changed substantially over the years thanks to technology and continues to evolve, much as it did between stockbrokers and their clients, said Matt Josefowicz, head of the insurance practice at Novarica, a research and advisory firm based in New York.
"Agents once had a monopoly on the transaction. Now with direct writers, there is no monopoly, and a growing segment of the buying public is making different buying decisions, and more of them are buying online or through a call center," Josefowicz said.
As the buying public’s desire changes, Josefowicz feels agents need to transition to the advisory role for those who want to use that channel for the transaction. At one point, he notes, the industry thought the agent channel was what everyone wanted to use, but the misconception there was buyers had to use agents because that was their only way to secure insurance. Today, that’s not the case.
While agents and carriers have made good progress to make the insurance transaction more efficient, there is still a lag for the consumer, according to Yates. The challenge is to give the customer access to the insurance transaction through the agent’s portal, thereby satisfying the customer’s desire to conduct business over the Internet whenever they need to and at the same time maintaining the agent’s brand.
The challenge is to be able to offer a personal lines quote to a customer through a comparative rater system—the same rater agents use to research a quote for their clients. From there, the challenge would be to allow the customer to link over to the carrier through the agent’s portal.
"Now they are finding there is a growing population segment that is not available to them through that channel," he said. "This is a serious challenge for insurers."
Insurers need to decide who the customer is that they are going after and how that customer wants the insurance product marketed to them. If it is someone in their 20s, for instance, insurers will have to decide on a different marketing strategy for a customer who has no desire to sit and lunch with an agent and be limited to conducting their insurance business on a 9-5 schedule.
The generational change is already altering the way agents and brokers do business. Younger and savvier agents learn it is more profitable to specialize, accentuating their role as a trusted advisor and in some cases leaving the low-margin commoditized business. They are also more attuned to the possibilities of technology.
Next in line
Next in line
The trust announced the establishment of its board of insurance professionals dedicated to overseeing the LexisNexis Insurance Exchange.
The trust said its mission will be to "provide both guidance and insight" to LexisNexis Risk Solutions, which is the developer of the exchange, to ensure the exchange "fully supports the needs of the insurance distribution market, carriers, and their customers."