What if the COVID-19 pandemic had struck in 1980 instead of 2020? Without widespread internet connectivity, cloud software and video conferencing, the insurance industry may have been up a creek without a paddle (and dressed in a neon tracksuit). Instead, in 2020 many independent agents leveraged technology to maintain and even grow their businesses despite the economic turbulence.
But COVID-19 is not in the rearview mirror yet. Many agents continue to struggle with paperless processes, remote relationship building and digital communications. It can feel difficult to keep people at the center of business when most people are secluded at home and avoiding in-person interactions.
Still, it is never too late for independent agents to modernize their business and recommit to building stronger relationships. Three insurtech trends are critical to adapting to this moment and thriving.
E-Signatures & Payments
Electronic signatures and payments are gamechangers for independent agents (pandemic or not). Providing these capabilities has real advantages. Clients are timelier when they can click a few buttons to approve a document rather than print, sign and scan (or mail) dozens of pages. They are also more likely to pay premiums on time when they can use a credit card or set up automated ACH payments.
After COVID-19 struck, some insurtech providers saw a 20% uptick in e-signature adoption -- a pace unheard of in this industry. The same opportunity exists in digital payments. CB Insights, a technology analyst firm, reports that in 2019, paper checks accounted for 52% of disbursements in the insurance industry compared to just 22% on average in other industries.
ACH payments, which made up less than a quarter of insurance disbursements that same year, are 10 times less expensive than cutting a check, CB Insights claims. Although credit cards, mobile wallets and pay-by-text services may impose higher fees than checks or ACH, the improvement in customer experience is more than worth it.
Contrary to what agents sometimes fear, clients appreciate the ability to do (some) things for themselves and on their own time. In the same way that clients don't want to wait until 9 a.m. to call a bank for their account balance, clients find it easier to switch an auto policy on or off through a mobile app than to call an agent.
For example, United Western Insurance Brokers (UWIB), a Seattle-based agency, expected new business to fall off a cliff in spring 2020. Instead, UWIB wrote more new premiums than at the same time in 2019. Why? UWIB had self-service client portals, e-signatures and e-payments already up and running before the pandemic -- making them attractive to both existing and new clients.
Particularly for digital natives (Gen Y and Z), the insurance process is more welcoming if they can navigate routine tasks when and how they want.
Automated Client Engagement
In most industries, automated emails are impersonal. They fill in "Dear Doug" but send the same (often irrelevant) offers and information to each recipient. But marketing automation platforms -- the lingo for mass digital communications -- can work well in insurance, provided they are integrated with an agency's management system (AMS) and backed by an agent's understanding of their clients' industries and content needs.
When these platforms can access up-to-date AMS data, they can automatically send reminders on upcoming renewals, solicit reviews from happy clients, and create segmented lists to provide relevant risk management content based on lines of business, geography and much more.
For example, an Alabama-based trucking company concerned about hurricane exposure might not want a primer on New England's next ice storm -- unless it operates there or competes with firms based in New England. In other words, agents who spend time getting to know their clients' businesses have greater ability to send personalized, timely communications.
No Turning Back
During COVID-19, technology hasn't eroded relationships. If anything, it has given insurance clients more freedom and comfort in how they engage with agents. Independent agents who have adopted e-signatures and digital payments, self-service tools and marketing automation are equipped to thrive in 2021 and even grow their book of business. Agents who haven't adopted these technologies will be at a disadvantage with COVID-wary clients who want an efficient and safe experience.
There are still numerous opportunities to modernize agencies, strengthen relationships and remind clients that they matter.
Doug Mohr is vice president, Industry Relations and Partnerships, at Vertafore.