At the recent Big I Young Agents' Conference, the Agency Council for Technology's Strategic Future Issues Work Group held a roundtable session with 10 young agents to see how they view customers' changing expectations and the best ways for agents to implement the kind of technological tools needed to meet customers' future needs. The agents said that staying abreast of the latest uses of the Internet, carrier web sites, and the efficiency offered by the ability to communicate by e-mail is crucial to remaining competitive. But along with those changes, the agents said agencies needed to re-examine the kind of value-added services they can provide customers that extend beyond just the price of a policy.
Young Agents' Profiles
The agents who participated in the roundtable were between 20 and 30 years of age and were primarily focused on providing consumers with commercial lines coverage. Most of the agents came from family agencies both large and small that were located in rural and suburban locations. The agents noted that they are operating on tight deadlines and are seeking ways to create more opportunities to spend time with their families.
One thing the agents had in common was the ease with which they used the Internet. It is the first place they go for information about a product or to facilitate the means to resolve any problems. As consumers, the agents noted they do a lot of their buying online to save time and avoid web sites that don't provide good services. The agents are totally comfortable using a credit card online and they like the value-added services provided by reputable web sites. For example, in cases where a consumer counts on a web site to provide a monthly product, consumers appreciate web retailers that either automatically resend the product or send out e-mail alerts informing the customer it is time to reorder an item. They also appreciate alerts when there is new information about a client, competitor, vendor, carrier, or industry.
One area where technology has had a tremendous impact is on communication. Due to the volume of questions and other inquiries, many agents seek out ways to separate their personal lives and professional obligations. Some agents use instant messaging within their agencies and use text messaging in their personal lives. They particularly like text messaging because they reserve it for personal messages to family and friends. The agents noted that they primarily use e-mail when communicating with commercial clients and carriers, again as a means to separate their personal lives from their roles as agents. The young agents also rely on electronic newsletters to get their industry news, although they still depend on information provided by industry magazines.
Changing Customer Expectations
Agents are finding that more and more customers are knowledgeable about the Internet and other technological changes and want convenient options to deal with their agents. The agents believe most of their customers have searched for insurance coverage on the Internet and received quotes, especially in personal lines such as automobile insurance. One agent quoted a recent study that found over 50 percent of customers who purchased automobile insurance from an agent also sought a quote online.
The agents believe that their customers perceive personal lines and small commercial lines to be a commodity that is widely available. One agent estimated that 20 percent of his customers are with him for service as opposed to the 80 percent who focused on the price of coverage. Another agent pointed out that most of his customers could replace him as an agent and stay with the same carrier because so many agents represent the carrier. Still another said that even though his agency provides his construction clients loss control and human resource services, price continues to be the number one factor when it comes to retaining clients. The agents said another change they see is that customers want the option of paying their premiums by using credit cards so they can receive airline miles and points for rental cars or hotels. Several carriers offer this option, but the agents said this remains a challenge on agency-billed business.
The agents said that their clients' main interest in an agency's web site is to gain access to information about billing methods, making payments, printing proof of automobile insurance, and certificates of insurance. Some of the agencies are generating online sales for certain specialty lines, such as travel insurance. However, agencies have yet to find a way to have a major impact on other lines of business.
A Shift in the Agency Paradigm
Among other things, the discussion brought out the need for a major shift in the type of value that independent agencies deliver. The value is no longer in the transactions that the agency performs. Customers today take those as a given. One agent said, "If we just turn ourselves into order takers, we're out of business."
The new value for personal lines customers might be proactive risk assessment, providing cost-savings options, claim counseling, and disaster-planning advice. For commercial lines customers, it might be risk counseling with a special understanding of a particular industry. Other services could come in the area of claim-experience analysis for loss control, verifying experience modifications, assisting with the audit process, human resource needs, and legal and accounting services.
A paradigm shift in the value the agency provides its customers requires changes in the functions agency employees perform. The processing of transactions needs to be automated to the maximum extent possible so that employees are freed up to provide value-added services. In order to accomplish this goal, there must be an additional paradigm shift that dictates how agency employees do their work, how agents transact business with carriers, and in the number of transactions customers can perform for themselves on agency web sites. Industry initiatives such moving toward a paperless office and enhancing the agency's web site are critical tools agencies need to make to accomplish these goals.
Some of the young agents expressed their frustrations with many of the older customer service representatives who are reluctant to change and adopt the new technology tools that are available. One mentioned how the younger CSRs rely on electronic forms, while the older workers are reluctant to move away from paper files. Another agent noted the importance of the agency taking the time to train CSRs on the capabilities of their agency management systems so that more of the system's time-saving features are used. The young agents also expressed their frustrations with some older agency principals "who stand in the way" of the agency's attempts to make necessary changes to using technology and implementing value-added services.
How Carriers Can Help
The young agents had several recommendations as to how carriers could help agencies transition from the old ways of doing business to the new. Among other things, the agents offered a number of suggestions, such as:
Reduce the time it takes for a customer to receive a quote and eliminate as many of the "40 extra questions" as possible.
Use the Internet to pre-file underwriting information such as building size, age, and condition. The same holds true for automobiles, where agents can use the Internet to provide information about the car including its age, number of miles, and other data.
When the carrier has an interaction with the customer, share that information with the agent. For example, the agent should be notified when the customer has filed a claim.
Help agents provide customers with valuable risk management and loss control information by making real-time claim data easily available to agents.
Provide a robust search engine on the carrier's web site so the agent can retrieve information as needed. Make it easy to locate any needed forms, endorsements, and manuals.
Use e-mail notifications sparingly and only when important. Agents said that when carriers send three or four e-mails a week, they delete them without reading them.
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