For many people, the arrival of the New Year heralds the promiseof achieving bigger and better things, reaching new heights, andperhaps accomplishing things in the new year that weren't done inthe prior year.

2017 is going to mark a pivotal year for agents and brokers asInsurTech distributors really hit the marketplace with new ways offulfilling customer sales and service expectations. Agency-carrierconnectivity (upload, download, and portal) is a critical point forsuccess on the path to being the digital agent both personal linesand commercial lines consumers expect. Depending on which path adistributor chooses, it can either be a happy New Year— or it can be a very un-Happy Year.

Related: Still using paper? Here are the 5 pillars of adigital agency

Unfortunately, Strategy MeetsAction (SMA) survey results show that many distributors have along, arduous path ahead. Sixty-three percent of respondersindicated they were mainstream investors in connectivitytechnology, not investing for differentiation, or not investing atall. This strategic and tactical direction needs to be reversed, orthose distributors will likely face a very sad New Year's Day in2018.

Small agents with under $1 million in premium are in the mostdefensive position, with 67 percent believing the number onebusiness driver for investing in connectivity technology wascustomer retention vs. 58 percent agents with over $1 million inpremium indicating that same driver. In either case, given all thechanges in distribution over the past several years, customerretention is a big deal!

Barriers to success

Being the owner or principal of an insurance agency is not aneasy job. There are many factors that contribute to success, butthere are also many barriers.

Agency survey responders indicated the top barrier to improvingconnectivity is workflow challenges, with 44 percent indicating so.It's very important for agency owners and principals to assess whythis is the case. If it is internal culture — "we havealways done it this way" — it's imperative that agencymanagement work to change this attitude as quickly as possible sothat progress can be made. The other potential cause of workflowchallenges is how insurers execute connectivity — it's atwo-way street.

Agency management needs to work with insurers on how theyconnect with the agency. If an insurer cannot change how they dealwith connectivity issues, agency owners and principals shouldassess just how much value that insurer brings to the agency, andif the inefficiencies are worth it.

SMA has looked at the connectivity issue from the perspectiveof commercial linesinsurers and personal lines insurers, and now fromthe agent and broker point of view. There weresimilar responses to many of the questions asked. For example,conflicting priorities were the number one inhibitor to investmentfor all groups. However, there were some disconnects.

Lack of satisfaction with connectivity solutions

Probably the most disconcerting were that the majority of agentsand brokers indicated a lack of needs satisfaction withconnectivity solutions. However, over 50 percent of personal linesinsurers believe that needs are being met. Clearly, there is workto be done!

While some consumers want a completely automated insurance andsales process, a good number of others want the help of aknowledgeable insurance professional, and they want a personalizedexperience. There is much opportunity for agents and brokers todeliver on those expectations, but change is needed.

On New Year's Day 2017, agents and brokers should make aresolution to adopt technology that will facilitate seamless,straight through processing to support customer requirements. Thisis not a resolution that can be broken!

Customer demands

Customers are demanding service transparency and real-timeexecution. There are some emerging InsurTech distributors who willbe very happy to fulfill the needs of customers with all the bellsand whistles customers have come to expect. New Year's Day 2018could be a sad day for the agents left behind with a deterioratingcustomer base. 

Related: Why agent connectivity is a tipping point forcommercial lines insurers

Karen Pauli is a principal atBoston-based SMA. Emailher at [email protected].This article first appeared on StrategyMeetsAction.com and isreprinted here with their permission. Opinions expressed in thisarticle are the author's own.