A YouTube Business Plan

Fast-Moving Tech Trends Driving Changes in Independent Agency Strategies

By Peter Van Aartrijk

Someone said there are two ways business owners respond to change: some people act when they see the light, and others when they feel the heat. Most business owners would admit they see the light or feel the heat on any given day. Independent agency owners are no different. But a growing number of agents are trying to stay ahead of the change curve. These agents are participating along with about 50 carriers and technology providers in the Agents Council for Technology, managed by the Independent Insurance Agents & Brokers of America.

Last year, the ACT Strategic/Future Issues Work Group identified and organized the most important technology and consumer trends that it believes will continue to impact how independent agents and their carriers do business in the next five to 10 years.

Increase in computer power

Among the anticipated technology changes: big increases in computing power and storage capability. This means that virtually all communication, data exchange, and inquiry will be in “real time,” the ACT group says. The ease of entry will encourage new competition from both traditional and non-traditional sources, such as warehouse stores and affinity organizations.

Increasingly, the buying process (research to sale) will start and often finish on the Internet. Sales and servicing will be processed 24/7 via the device of the user’s choice: desktop, laptop, TV, cell phone, iPod, PDA, or other new technological devices.

Customer expectations will be for full service from anywhere at any time and from any device, seamlessly, with and without the involvement of a human being. Customers will expect to access account information from all service providers online and will become comfortable with performing increasingly complex tasks in a self-service mode. And the next generation of websites will marry voice, video, and graphics.

In light of these customer expectations, agents will have to build their brand on the Internet as consumers increasingly go online. Agents must provide customers with real-time service on the Internet, as their competitors will do.

Agents also will need to learn how to take advantage of the power of individual communication devices. One example might include doing a quote on an iPod or teleconference with a customer. Multiple portable devices will need to integrate with agency management systems and comparative raters.

Security will become a more complex issue, the ACT group says. For example:

How will agency and carrier-generated email fit agency workflow?
What controls should be placed on outgoing secure email? Can it be copied? Forwarded?
How can portable devices be secured as storage devices, as transmission devices, and from viruses of all types?
How will data be secured in transit from agents and customers?

Consumer trends

The ACT group also looked at a host of consumer-related trends and their impact on independent agents. Among the most important:

Generations: Many Baby Boomers will reach traditional retirement age, but will continue active lifestyles and often re-engage with new work, including part-time positions, in-home businesses, or volunteer pursuits.

Boomers will continue to be important insurance consumers and business owners for independent agents, and they’ll need financial services advice and products. As Boomers re-engage in the workforce, agents could hire them to perform sales and service, an area where recruitment remains difficult.

Those born after 1964 (generations X and Y) already are, or soon will be, in their prime child-rearing years, owning homes, and running businesses. They are likely to have different expectations than did their parents, which service providers will have to ascertain and deliver. The implications:

Consumers will expect their agents to be full participants in the networked world, enabling them to communicate with, receive information from, and transact business with their agents electronically.
Agencies leveraging technology fully will be in the best position to attract generation X and Y employees, and these staffers will be a great resource in fashioning messages and services that resonate with their similarly-aged peers.

Diversity: The U.S. will continue to have a more ethnically diverse population, along with many single-parent and other non-traditional households, the ACT group believes. In traditional households, both spouses working will continue to be the norm, and women will increasingly hold managerial positions.

Agents will need to use technology advances to meet the time and logistical constraints of single parents, busy clients, and customers whose ethnicity requires unique handling during interaction. The Independent Agency System should continue to seek ways to employ, communicate, customize services, and market to this diverse population.

Global economy: Local businesses will continue to expand overseas, buying and selling across the globe, and setting up remote offices internationally with U.S. and foreign employees. Plus, personal lines customers are buying residences or working internationally. Thus, agents will need expertise in identifying and managing the international risks presented by their customers, as well as the markets that can insure these risks. Agents also will need the database to track this international information and coverages.

Time as currency: Agencies must adapt to customers who are shaped by busy schedules. Agents should offer options to do business when it is convenient for clients, in an efficient way.

Agencies must find – and communicate – ways that save their customers time, not cost them time. For instance, agents should explore how they might use automated “intelligent agents” to search out the best choices for customers in the shortest time.

Information: Consumers and businesses will face an increasing array of choices and greater complexity. At the same time, the Internet will offer access to more information relating to insurance and risk management.

As a result, agencies will be expected to serve as knowledgeable advisors, and they must focus on new training needs to help employees become trusted advisors. To allow staff members to take on these new roles, however, traditional processing functions need to be automated to the highest degree possible. The agency’s brand, website, and other customer touch points will need to reflect a higher degree of professionalism.

Moreover, agencies increasingly will specialize to provide value-added advice and services to their particular sectors. Agents will retain more customized data relating to customers’ preferences and particular needs.

Trust: Agents are in an excellent position to build trusting relationships with consumers. In spite of all of the technology, human beings still seek personal relationships with businesses with which they deal. The foundation for all relationships remains trust. Thus, agents should focus specifically on how they can build the level of trust with their clients:

‘Must-do issues’

Recognizing the implications of these trends, the ACT group developed a few “must-do” issues it believes the independent agency channel can—and should—address to be in a stronger position. ACT expects to continue to lead research and recommended solutions in these areas. Five “must-do” issues include:

1. Achieve a consistent industry strategy on security

The industry must determine a consistent strategy for handling security issues arising from retaining and exchanging data electronically among agents, carriers, and customers.

2. Create an ongoing agent-carrier workflow improvement forum

A forum is necessary for the ongoing consideration of workflow and business process enhancements to reduce current duplication, multiple workflows, and work-arounds. This group will seek to build a greater industry consensus on the most effective, core agent-carrier processes. The group also will seek to achieve a greater industry consensus on what customer and policy data is needed and by whom; who owns what data; where data is kept and how it is protected; what data needs to be shared and how it should be shared; and who has access to data and how various stakeholders get access to data.

3. Develop best practices information for agency websites, search engine optimization, and Internet marketing

ACT will provide agents guidance on the benefits they can derive from building their website presence and using the Internet actively as a marketing tool. This includes delineating best practices in website use and maintenance, search engine optimization, and Internet marketing (pay per click and pay per call). The ACT group also will develop recommendations for carriers to make more information and transactions available to consumers through agency websites.

4. Ongoing dialogue on future trends and their implications

ACT also will provide an ongoing forum to help keep the independent agency channel focused on technology and demographic trends and how the industry might take advantage of them or respond to the challenges presented by them. Example: “Intelligent agent” technology tools are emerging to provide consumers with decision-making information. How can independent agencies harness this type of technology to provide their employees and their customers with a higher degree of information and support and turn it from a potential threat into an opportunity?

5. Move the agency channel’s predominant workflow to real-time and download

Real-time communication through agency management systems and comparative raters, along with download, are important technology tools for independent agencies, their carriers, and technology providers to adopt. Agents must be well positioned to meet customer demands for immediate service and pro-active counseling.

Already, carriers, technology providers, and state and national agents associations, have come together to launch a coordinated campaign to promote real-time communications between agents and carriers. The key target: all independent agency owners willing to present a more modern brand to clients and prospects.

Peter van Aartrijk (peter@Aartrijk.com), managing director of The van Aartrijk Group (www.aartrijk.com), an insurance-focused marketing and communication firm, has worked with independent agents and brokers on marketing challenges for 20 years. He chairs a workgroup of IIABA’s Agents Council for Technology that is addressing website and Internet search opportunities for the independent agency channel. This article reflects the author’s views, and should not be construed as an official statement by ACT.

Posted: Thursday, May 31, 2007 12:00:00 AM. Modified: Thursday, June 28, 2007 3:48:16 PM.

(317) 875-5250 - Indianapolis | (202) 628-1558 - Washington, D.C.

Contact NAMIC | Press | Advertise | Sponsor

We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.