How to Be an Agent of Change: Turning Recommendations into Commissions with Telematics
It doesn’t take a rocket scientist to understand the magnitude of disruption the world has undergone in the past year – but it might take an insurance agent to convey just how beneficial a new telematics-based policy might be for your “new normal.”
Recent research shows that the auto insurance market is ready for connected insurance, and now is the time for carriers and independent agents to capitalize on it.
Prior to the pandemic, a survey of 1,250 consumers found that 90% of consumers would be interested in telematics as part of their insurance policy after learning about the program’s offerings. However, 43% of those same consumers said that they had never been offered such a program. For those already with telematics policies, almost half joined a program because of an attractive discount, while 34% did so because their agent recommended it (Alix Partners, 2019). This shows how powerful agent recommendation can be.
Interest in connected insurance solutions has only grown over the past year, widening the already sizable gap between interest and market penetration. While perceived barriers around technology and privacy once existed, so many have shifted to a digital-only environment, that those factors have lessened. 95% of drivers in a recent study indicated that they are now more likely to switch to telematics-based policies compared to pre-pandemic – even if a monthly fee is associated with the switch (CMT, 2021).
The onus is now on the agents. As trusted advisors, agents can convert recommendations into commissions by educating themselves on the benefits of telematics and becoming comfortable with selling policies. Benefits to the consumer include policies that are more personalized, more equitable, and more engaging – research shows that more engaged drivers become better drivers. Benefits to the carrier include a more profitable book of business as drivers are constantly improving and begin to engage with the insurer more regularly than at annual renewal.
The pandemic has accelerated a trend that was already in process, where drivers were looking for a change in how they bought insurance. The consumer has identified what they want. The insurance industry has the technology – now they just have to sell it.