Brokers and independent agents havealways been the key to delivering consumer-centricity, and digitalsolutions only enhance that. (iStock)

With the recent acquisitions of digital technology firms by the major carriersBerkshire Hathaway and Allstate, a new type of digitally enhanced,consumer-focused insurance distribution model is beginning to takeshape, offering a better way of doing business for the entireinsurance industry — carriers, brokers and independent agentsalike.

It is clear that insurance distribution channels are rapidlyevolving, as the legacy systems of web-based lead generation usedby the insurance industry for years no longer works for today'sfast-paced business climate. A new, digitally enhanced model increases thecustomer-centricity of the industry and promises to help agentstogether with customers manage all of their insurance needs from asingle source.

See also: Signs of an insurance industry digitalmaster

An alternative to disruption

Web-based tools and InsurTech solutions are positioned to makethe lives of carriers, brokers and independent agents easier.The opportunities for digitalization to improveinsurance distribution channels are very clear. In the currentenvironment, the typical consumer has 10 or more insurance policiesfrom multiple carriers to meet their specific protection needs.Improving the product experience for only one of these policiesdoesn't have a significant impact on that customer, and can even bea negative impact if a customer needs 10 separate digital portalsto manage their entire insurance portfolio. Digital portals thatbring brokers and independent agents closer to consumers, on theother hand, are the real value-added evolution of the insurancedistribution value chain.

Brokers and independent agents have always been thekey to delivering consumer-centricity, and digital solutionsonly enhance that. Prior to digitization, independent agents andbrokers provided an analog version of a consumer-centric modelthrough relationships with millions of consumers. That role willremain essential as the insurance value chain digitizes; andtechnology solutions that allow agents to create a stronger bondwith their clients — as well as capabilities for commissiongeneration by cross-selling additional products — provide thedigital experience that today's always-on consumer expects.

Speed to market is the driving force behind the customer-centricfocus of digitization. Insurance solutions today need to move asfast as the market moves, and that means implementations measuredin days and weeks, not months. Most players in the market are veryfocused, looking only to improve and bring technology to theircomponent of the insurance value chain or their specific product.Lead-gen companies are focused on better ways to source anddistribute leads. Term life, auto insurance and dental carriers arefocused on improving sales of term life, auto and dental insuranceproducts. It takes a vision and the technology, resources anddesire beyond one's own niche to see things differently, from aconsumer's viewpoint across all products and insurancerelationships.

See also: Agent Study 2018: What technology devices does youragency use

Today's business standards

A report from Ernst & Young, TheFuture of Insurance in a Digital World, puts this insuranceindustry conundrum into context: "Consider the fact that onlinesocial networking services amassed 50 million users within 18months; notably, it took one retail giant 5 to 7 years, and an automanufacturer 20 years, to reach that milestone. The rates of changeand adoption are much steeper than ever before. Insurers have tobuild compelling capabilities via digital models in order to berelevant in the marketplace."

"The insurance industry is changing," according to Digitalist Magazine. "This onceproduct-driven industry is seeing an increasing need to becomeconsumer-driven. Today's average insurance customer has dozens ofchoices in providers. While they still understand that insurance isessential, they also know they have many savings options available.To compete, insurers must create a customer-driven model that'sdesigned to incorporate their customers' needs, while alsoaddressing loss prevention and better protection services. Tofacilitate this, companies are moving towards digitization."

While digitization is driving the evolution of insurancedistribution to be more consumer friendly, the role of theimportant contributions of the independent insurance agent orbroker remains relevant. The end-customers for guidance from anadvisor will remain. Agents who embrace the technology can focus onwhat they do best — advise — and let the technology supportthem.

Brian Harrigan is founder & CEO of InsurIQ, theConnecticut-based provider of insurance technologysolutions. Connect with him on LinkedIn, or send email to [email protected].

The opinions expressed here are the author's own.

See also:

Technology is not an insurance industryvillain

The future of P&C insurancedistribution