Mastering The Insurance Phase Change

Posted by Michael Jans on 5/24/16 10:00 AM

For more than 20 years, Agency Revolution has studied one question: "What makes some agents & brokers more successful than others." While some things change - tactics, techniques, even consumer behavior - others remain the same. Leaders must constantly assess the shifting insurance environment and adapt to remain competitive. Agency Revolution has compiled some of its key findings about success in todays insurance world, which will be published in a new eBook, "11 Points of Difference: What Fast Growth Agencies & Brokerages Do That Others Don't (And Why They Will Own The Future." Put yourself on the waiting list for a free copy by clicking here. You'll be notified as soon as it is ready. This blog post is an excerpt.

Point of Difference #3: Mastering The Insurance Phase Change

You may not notice the difference between ice that’s 25 degrees and ice that’s 26 degrees. But when it becomes 32 degrees everything changes. Or when it hits 212. It’s not even water. It’s steam. 

A lot of people think that the change in our channel is like that. We’ve been losing market share for over 20 years. Tiny degrees at a time.

The vast majority of insurance consumers reserach online

  • Consumer behavior has changed dramatically. Remember when insurance marketing meant taking out a yellow pages ad and hanging out at the Chamber? (To say nothing of the short-lived innovative technologies like fax and voice broadcasting.)
  • Once upon a time, the agent-broker channel was the default way to buy insurance. Consumers have choices now. Now the venture capital community promises more, uniquely innovative competitors (as the new sub-industry of ‘insure-tech’ has emerged.)

More and more consumers are buying online. (Inconceivable at the time our firm was founded.)

More and more consumers purchase their insurance online

  • Having a local agent or broker used to be the #1 driver of customer satisfaction. Not so much anymore.

Every year consumer behavior is moving towards digital platforms

  • Boards of insurance carriers are not ignorant of the gradual, consistent loss of channel market share. And they don’t seem to be willing to place all their bets on a channel that has been sluggish to adapt to new realities. CEO’s of longtime agent-only distribution systems are creating in-house competitors, diversifying their bets by competing directly against their traditional salesforce.
  • And, it seems that we’re not just seeing changes in personal lines. Small commercial lines faces impending threats from emerging digital competitors.

Even small commercial lines prospects are starting to shift towards the internet for their insurance buying needs

  • And middle market commercial lines? They may not be threatened by outside-of-channel competitors. They are already threatened by firms who are mastering connected technologies

This isn’t meant to dishearten. The hard work of strategy often requires the courage to develop a clear-eyed and unflinching analysis of what’s happening in the real world, so you can deploy your assets most wisely.

According to an industry wide survey our firm conducted, 96% of agents and brokers feel that “the world is changing faster” than their firm.

Is the world changing faster than your firm?

The responsible leader knows that in order to win, serve and retain the consumer, they must be present with the consumer.

‘New fangled’ digital technologies available to agents & brokers aren’t used to get ahead of the consumer. Today’s consumer is so far ahead of the agent-broker channel – in the everyday use of modern communication technologies – the challenge, there’s no need to jump ahead of the consumer.

The challenge is simply to be present with them. Today’s technology doesn’t just facilitate it. The consumer’s adoption of those technologies requires it.

As a coda to this point, we’re all familiar with the damage done to the travel agent industry by new technologies. What is less known is that those who survived sell three times more airline miles than the average pre-internet travel agent.

Fewer agencies and brokerages less, and a bigger average size

Consumers set the standard for how businesses communicate.

Rewards flow to those who adapt to and master the technologies they demand.

Topics: Insurance Marketing

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One More Thing! What do you think? How will you and your peers use this to grow your agency or brokerage? Share your thoughts in the comment section below and *please share this article if you found it informative.