Last time, I wrote about two facts that call into question the continuing value of insurance agents in the sale of insurance.  One impacts their utility for carriers and the other customer.

To read that blog please click here.

These two facts ought to disturb every agency owner.  But, do they mean the end of the business?

I don’t think so.  The fact that insurance companies can do a better job of predicting loss based on an algorithm rather than an agent’s knowledge isn’t news.  The idea that you can drive growth with advertising is also ancient history.  The fact that an insurance customer will shortly be able to get a quote in nano seconds, by typing their address in a Google search window, doesn’t mean agents are obsolete.

It just means agents must change what they do to continue to create value.

The task bar search and quote capability are exciting to me.  As a commercial insurance agent, it means that I can eliminate 5 to 10 hours of work for myself and a CSR to get a quote done for a prospect.  That will potentially free up hundreds of hours a year!  I can spend that time prospecting for even more customers, or I can spend that time really getting to know the customer.  Isn’t that what relationships that last are built on? Both things will help me make even more money, by helping more people in the future.

I remember 1982, when personal computers first started becoming widespread.  There were many predictions that massive unemployment would be the result.  The outcome was massive productivity gains, followed by rising incomes.  I believe these new technologies offer the promise.

Are agents worthless to insurance companies, in a future where algorithms give better underwriting results?  I think they are worth more.

The biggest value agents have always represented is putting the business on the books.  As agents have more time, due to automation, they can drive even more business, as I describe here, for their carriers.  To pay for the new technologies, carriers will require ever more revenue, and this plays to the agent’s advantage, if she uses the freed time to be an even better prospector and relationship builder.

However, agents who don’t adapt their business models very quickly will find that they have no place in the very near future.  Agents who are slow to change, won’t be just left behind, they’ll be left to die.  For entrepreneurial, risk taking, experiment making, agents we are preparing to enter a gold rush.  For everyone else, the golden days are now officially in the past.  Which kind of agent are you?

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