There's a lot of talk about disruption in the insurance industry, but what does it mean for the independent agent channel? ITC President Laird Rixford breaks down what disruption really means for agencies and how they can adapt.
Every fall at the InsureTech Connect conference, thousands of people in the industry gather to talk about the insuretech movement. There are many new, cool companies with innovative ideas and lots of talk about the changes in the industry, including a lot of people using the word disruption.
Now, I’m not a fan of calling it a disruption as I don’t think that it's a true disruption. I think of it as an evolution. But for all the words and talk about disruption at InsureTech Connect, there isn’t much talk about the independent agent channel and what it should do to adapt to the changes in the industry.
So, when they talk about disruption, what do they mean?
First, disruption is about engagement.
Are you reaching prospects through 20th century channels or 21st century channels?
On mobile alone, YouTube reaches more 18- to 49-year-olds than any TV network, broadcast or cable. Yet, agents still spend money advertising with companies who were once yellow pages.
How fast you respond to prospects has a direct correlation to your closing percentage. How often you communicate with clients has a direct influence on your retention. It also affects the client mortality rate, which is the average time a client stays with you.
It’s not always possible to call every prospect within minutes. But, it is not impossible to contact them. Automate your initial communication to prospects with drip email campaigns. If you’re new to drip campaigns, we’ve got a great video with tips on mistakes to avoid in your drip campaigns. Link below.
Also, disruption is about ease of use.
The technology in your agency should make it easy for producers to connect to clients and vice versa. Technology that is user friendly and allows the producer to focus on the client is key.
Check your technology. Is it easy to use or is it creating snags in client service? Is your technology advancing as consumer trends unfold? Or, is it keeping you tied to the past? Think VCR versus streaming.
Additionally, your website should be an extension of your agency. It should be more than an online business card.
On your website, clients should find answers to common questions about insurance. Provide contact forms for service or quoting. They need to be able to reach you when they need to.
When in doubt, make it easy for the consumer.
Finally, disruption is about data.
What is your client mortality rate? What is your cost per acquisition? By producer? By marketing source?
You have the tools that measure all types of things about your agency. But, remember since insurance is a relationship business, the most important things to measure have to do with the relationship itself. Like…
- How much does it cost to start a relationship? This is your acquisition cost.
- How long do you keep a relationship? This is your client mortality rate.
- How fast are you reaching out to your prospects?
- How often do you communicate with your clients?
- Does the message you send resonate with your audience? You can measure the click-through-to-open rate of your email marketing efforts for all of this.
- How much revenue does each relationship bring the agency?
Insurance will always be a relationship business, no matter how many times ads on TV or YouTube try to make it a commodity.
If you want to stay relevant and continue to have the value, adapt how you engage clients.
Update the way they can connect with you. Upgrade the information you use to analyze the value of your relationships.
This is how you as an independent agent can evolve with the changes that are happening in the industry around you instead of being disrupted.