Balancing Act: customers demand both a digital and personal experience
BY BILL SUNESON
Prior to the COVID-19 pandemic, independent insurance agents were uniquely placed within the market. Amid a surge of companies looking to disrupt the industry with a focus on technological innovation and end-to-end digital accessibility, independent agents catered to a demographic that valued a more personalized approach.
However, the pandemic has upended the insurance world and completely transformed customer expectations. To survive, agents must embrace digital solutions going forward or risk being left behind.
Bindable recently conducted a study taking a broad look at the evolving role independent agents play in the insurance ecosystem, both pre- and post-COVID-19, and the tools and technologies today’s agents must invest in to remain relevant.
The study reveals how an industry sector that has historically been slow to adopt new technology—91% of respondents—was caught unprepared in a sudden need to operate on a fully digital and remote basis. The consequences were significant, with over three-quarters of agents reporting their businesses were adversely affected with an average 38% drop in sales and revenue.
Although the need to adopt more digital solutions was apparent before the pandemic, with nearly half of agents in the study agreeing that their customers were already searching for more digital tools and 40% saying that they were poised to invest in such tools, the COVID-19 outbreak necessitated a steep acceleration in the process.
The data suggests a scramble to digitize that left many agents at a disadvantage:
- 6 in 10 agents lamented that they were not equipped to work remotely when the pandemic hit.
- Over half (57%) wished they had better technology to see their businesses through the resulting crisis.
- One-third of agents struggled to retain clients.
- Almost half at 48% believe their client relationships suffered as a direct result of the pandemic.
Agents are currently 23% more likely to say that they are looking to invest in digital tools than they were before the pandemic, and a quarter worry that they are struggling to keep up with changes in that arena.
However, the urgency has never been greater. Over three-quarters of agents report that customers’ expectations for automated processes have increased, with nearly as many (73%) reporting that their customers expect a fully digital experience.
An inability to cater to these changing demands has ominous implications, as 43% of agents report tighter business margins and 80% agree that slow adoption of technology makes agents less valuable to carriers. Three-quarters of agents who participated in the study believe that investment in technology is critical to the very survival of their roles.
While the urgency of a digital overhaul for any business operation in a post-COVID-19 world is predictable, the data also points to a curious coexistent trend: an increase in customers’ expectations that personal interactions are available to them if they need or want them.
A whopping 91% of agents reported an increase in customers’ desires to speak to their agents when they have questions, indicating the importance of a hybrid approach that allows consumers to tailor their experiences to be as personal—or automated—as they desire.
The study makes a compelling argument for the importance of digital advancement in the current insurance environment. Technological innovations have long outpaced the ability of many businesses and consumers to keep up, and until recently there was a substantial market for a more “mom and pop” approach to business. Among certain demographics, this might even have been quite sought after, allowing some agents to resist giving their operations digital makeovers.
Recent events, however, have demonstrated with brutal clarity the importance of diversifying offerings across multiple platforms, and the enormous disadvantage businesses face if they are unprepared to cater to customers in the digital marketplace.
Bill Suneson is co-founder and CEO of Bindable.