We’ve all read the industry publications about the rise of the Insurtechs and the legacy direct writers continuing to gain market share as they continue to commoditize all but the large and middle markets of commercial lines insurance. Personal lines which include home, auto, life, and health insurance, along with small commercial, continue to move in the favor of insurance providers that can offer the Amazon shopping experience to consumers 24/7. Predictions about the demise of the agency distribution channel abound as capital continues to flow into start-up Insurtechs at record numbers, especially to those that promise seamless 24/7 transactions while providing the on-line shopper total control of the comparative shopping experience.
My prediction – Mega agencies led by part time agents are going to dominate the insurance industry moving forward. Only about 20% of existing agencies will survive the next decade.
— Pat (The Shopper) West 🛒 (@hedgequote) July 19, 2019
So, what can the Agency Channel Do to Combat and Reverse this Trend?… i.e. the How
Fortunately, the insurance technology companies that currently serve the agency distribution channel have been responding to this challenge. To them, it’s a matter of survival for themselves, not just their agent customers. Here are just a few tools, or actions, that every independent agency can implement today:
- Utilize a web-based CMS (Client Management System) so staff and producers can work from anywhere.
- Invest in a VOIP phone system, e.g. Ring Central, so calls can be routed and re-routed anywhere, anytime, outside of regular business hours by simply logging into the agency’s account.
- Utilize an automated email marketing system that either integrates with the agency’s CMS or is already included in it. Remember on your best day you’ll have a 20% closing ratio for internet leads. Don’t waste the remaining 80%, get them into your email marketing system.
- Utilize producer level web forms for every line of insurance the producer sells. While most multi-raters now provide web forms on the agency principle level, some already provide them at the producer level as well. For agents located in Florida and Texas, QuoteRush does offer producer level web forms that are integrated with their rater and the producer’s CMS. The CMS integration is essential since qualified prospects usually don’t buy the first time around, and if the agency has implemented action #3 (i.e. an automated email marketing system) then these prospects will automatically get touch again many more times until they either buy or tell you to go away by opting out of your prospecting database.
- Individual producers need to sell themselves and their agencies within their own social media accounts. While most agency principals would balk at the idea of spending their money driving traffic to their web sites in order to benefit their associate agents, most would encourage each of their licensed producers to promote themselves online. That said, if the local producer has her own web forms, she could utilize them within her own social media accounts without taking away from her agency principals’ marketing efforts.
- In addition to the above 5 action steps each producer should participate in one or more DMCOs (Digital Marketing Co-Operatives) enhancing their internet presence while leveraging their new-found technologies. What makes DMCOs powerful, is its ability to utilize the technology of choice for each participating DMCO member. In addition, as the producer changes her technology of choice, i.e. web form, the DMCO administrator can simply swap out the old form with the new with no interruption in the DMCOs marketing efforts. Now that’s seamless!
And now the When
As previously discussed, all six of these action steps are available now on the principal-agent level. That said, when insurance carriers and the supporting technology companies begin providing quotes & bind web forms down to the individual producer, this will be our turning point. Agents will stop losing and start gaining back market share. Why is that you say? The simple reason has to do with what most consumers want. In short, they want it all. Consumers want the Amazon shopping experience for insurance, but they also want a local competent agent available to them 24/7 to answer any questions.
Lastly, the swarm will overcome the Behemoths. Thousands of producers armed with quote and bind web forms have the ability to be found everywhere online, both individually through their emails, and social media pages and via any DMCO they wish to participate in.
At the end of the day, it’s about the survival of the agency distribution channel, along with the carriers and technology companies that support us. It will require a team effort to win this distribution war. It will require everyone associated with the agency distribution channel to make it happen, but it is achievable, and it is ultimately what most consumers want as well.
To learn more about DMCOs, how they work, or how you can start your own, please visit 1lead1buyer.com. Also, please direct any comments, criticisms and/or questions about this article to my attention, Carl Moulton at firstname.lastname@example.org . Thank you and Go InsNerds!