In 2015, the insurance industry will usher in a new year with brand new business and technology priorities. The increased adoption of enterprise technology across all insurance channels has laid the foundation for extensible application and innovative technology use cases–all of which are working to improve efficiency and enable better customer service for carriers and agencies alike.
As a result of increased accessibility and quality and sophistication of technology, agents and carriers will find ample growth opportunities in 2015. But the most impactful industry changes will be driven by big data, security and mobile technologies.
In 2015, Vertafore expects the following three industry changes to take place:
Big Data Technologies Will Become More Accessible to Small & Mid-Size Agencies
The beauty of modern technologies is that as tools get more sophisticated, they often get more user friendly, intuitive and cost effective. This progression can be best illustrated with the power, reach and usability of smartphones. Smartphones have reached mass global adoption and users require little training or explanation to operate their device's features, apps or software updates. There is no reason this same logic cannot be applied to modern insurance technology systems.
For years, insurance carriers and larger agencies, with their expanded resource pools, have been leveraging data for business intelligence. The insights it provides prove extremely valuable to the process-oriented insurance business. Unfortunately, the resources required, whether financial or intellectual, are often out of the reach of the average agent–or at least historically that has been the case.
In 2015, the accessibility to basic data analytical tools provided by vendors will increase dramatically among smaller independent agencies as a result of expansion and refinement of reporting capabilities. Today, analytics technologies can be integrated within core agency management systems, which help agencies of all sizes easily unlock and leverage the powerful information already hiding within their systems. Rather than further widening the gap between large and small agencies, all agents can reap the benefits of properly applied technology–often even helping to level the playing field.
Cyber Liability Insurance and Identity Theft Protection Will Be Largest Growth Areas
For the modern insurer, protecting against the risks associated with our digital economy provides a chance to not only expand their offerings, but also to stay relevant in an evolving marketplace. Cyber liability insurance is a perfect example. We are all familiar with the high profile security breaches that have involved some of the largest box stores. Unfortunately, the risk is not limited to giant retailers or financial institutions. Once considered a "specialty" form of insurance, cyber insurance is rapidly becoming more commonplace and consequently, businesses are demanding coverage.
A recent study by Aite Group, found that cyber liability insurance has become one of the fastest growing lines of business. Fifty percent of agencies surveyed in the report cited an increase in sales for cyber liability coverage over the last 24 months. Insurance covering identity theft was also a major growth area with 55% of agencies reporting increases in sales. The study found that a key characteristic of fast growing agencies is diversification into new lines of business–44% of agencies experiencing revenue growth have done so. Cyber liability and identity theft protection rose to the top of new product lines offered.
In 2015, more agencies and carriers will roll out cyber liability insurance and identity theft protection, which will have the biggest impact on their bottom line. These strategic product lines will provide agents and carriers with more opportunity to deliver value to their customers and demonstrate their ability to react to the modern digital market from a product and coverage standpoint.
Mobility Will Drive Productivity
No matter the location, device or time of day, mobile technology is empowering producers and principals with the ability to continuously monitor the health and vitality of their accounts, overall agency performance and build their book of business.
Consider the business resources that can be reallocated when producers are able to prepare and send policies to clients from their tablet or smartphone. E-signature companies, such as DocuSign, are driving this digital movement forward. Hundreds of agencies are using this technology to accelerate their business growth and eliminate the inefficiencies tied to outdated processes. Gone are the days of handwriting a policy, mailing it to a customer, waiting for them to sign the policy, waiting for them to mail it back, then reviewing their signature only to realize they missed a page!
In the new year, agencies who leverage mobile and digital technologies will dramatically increase sales and their book of business. An agent's smartphone or tablet will become a point-of-sale device that, when integrated with technologies like DocuSign, can empower them to increase productivity from anywhere, any device, at any time.
Mobility is driving increased connection between costumers and agents, reducing friction in the ecosystem and reducing stress for all involved. Perhaps Newton would note that when agents are empowered with vitality from mobile solutions to drive their business, the equal and opposite notion would also be true: customers would be calmed and comforted knowing a sound policy is protecting their dreams.
2015 will be a year filled with growth opportunity for independent agents of all sizes. Big data, cyber liability and mobility will play starring roles in helping agents achieve set out growth goals and will make up the framework of successful insurance players of the future. Together with stronger carrier connection, agencies that make these leading enterprise technologies a priority in 2015 will experience a dramatic increase in revenue and become an insurance force to be reckoned with.
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