A major concern for independent agents is the fear they will be made obsolete by technology. If customers can buy policies at the point of car purchase or home purchase, for example, what’s the agent’s role? If insurance consumers can do a thorough price comparison on their phone, why would they go to an independent agent?
This is a valid concern. A study by insurance ratings and review site Clearsurance found that nearly half of the people they surveyed would buy an insurance policy online.
While it’s true that technology offers some benefits and can assist customers in finding insurance coverage, it can’t replace the human touch. People are still important, says technology journalist Ron Miller. No matter how advanced our technology becomes, a high percentage of customers still want to interact with people rather than machines.
Here’s why the human touch is so valuable in the insurance industry.
Agents Can Assess a Customer’s Individual Needs
Technology has come a long way and is certainly an asset for modern customers. People can lower their premiums by using fitness apps and wearable devices that track their dietary habits, weight and fitness progress says Vidushi Singh at insurtech solutions provider Mantra Labs.
Customers can also use personal assistants like Alexa to research insurance coverage options to find deals and get basic answers to their questions, adds insurance writer Janet Hunt. They can even shop for a policy, buy it and file a claim through a mobile device.
However, it’s still no match for the one-on-one, personal experience that a good independent agent provides, explains independent analyst and consultant Craig Weber. Although technology can do a lot, it’s still no substitute for interacting with a human being.
That’s because each customer has a unique set of needs that come into play when they’re looking for insurance. Technology is simply unequipped to fully assess those nuanced needs. A good agent, however, can converse with a customer, make a connection and take specific preferences into account in order to identify the optimal policy.
Independent agents are especially ideal for individuals with complicated risks, says Virginia Hamill, staff writer at Fit Small Business. When a one-size-fits-all approach just won’t cut it, an independent agent is a valuable person for someone to have on their side.
They can also offer advice on how to bundle policies in a way that provides comprehensive coverage without overspending, adds the team at Grange Insurance. In turn, the customer can rest easy knowing they’re fully covered and are only spending money on insurance they truly need.
Agents Provide Personalized Service
Personalization is a vital part of sales and marketing in the 21st century. There’s a growing trend where consumers not only want personalized offers and solutions, they expect it.
“No matter the industry, a consumer expects to be known and communicated with accordingly. The insurance industry is certainly no exception,” says V12, a leading marketing provider of customer acquisition solutions. “Eighty percent of insurance consumers are looking for personalized offers, messages, pricing and recommendations from their auto, home or life insurance providers.”
Although technology does offer some level of personalization, you could argue that it’s nowhere near the level of that a professional independent agent can offer. Even a quick conversation can provide the agent with the key information needed to customize their offer and match a customer with the exact coverage they need at a reasonable price. And when you factor in long-term relationships where a customer has been getting coverage from an agent for years, the level of personalization is unparalleled.
Customers are the priority, says the team at Oklahoma City insurance agency, Thrive Insurance. With a personal knowledge of each customer’s unique circumstances, agents are able to offer highly customized solutions rather than quick fixes that don’t provide relevant or adequate coverage.
Not only is this advantageous to the customer, it’s crucial to the longevity of an insurance agency. Customer experience speaker Shep Hyken writes that a meaningful, personalized experience often results in increased revenue and loyalty. Forty percent of American consumers spend more than they initially planned to because of personalized service, and 44 percent say they will likely buy again because of it.
Technology Can’t Read Human Emotion
Let’s face it. Insurance can be complicated. Trying to figure out complex terms and jargon along with the intricacies of different insurance policies is tricky, explains insurance advice website Obrella.
“There are several types of coverage, deductibles and options available as well as different levels of mandated coverage from state-to-state in the US,” adds Seth Birnbaum, CEO of online auto insurance marketplace EverQuote. “With bundling options, laws and discounts — it can be difficult to create an online experience that gracefully handles such complexity.”
While it’s true that technology can provide answers to basic questions and point customers in the right direction, it simply can’t match the level of service that an independent agent can provide. For example, a person may have to spend several minutes sifting through a website or app trying to find an answer to a pressing question. And even then, the information they find can be limited.
But if they’re speaking directly with an experienced agent, they can get a comprehensive answer, with their personal history and specific needs taken into account. This is an enormous advantage considering that customers place such a high value on customer service, writes executive coach Brent Kelly.
Although the new generation of insurance customers are more tech-centric than previous generations, they still want the same things like ease of buying and outstanding customer service. And it’s impossible for AI or robotics to replicate what independent agents can offer.
Not only that, an agent can read a customer’s emotions and is sensitive to whatever issue they may be going through at the moment — something that technology has yet to fully achieve. Although modern AI has plenty of cognitive ability, there’s no emotional intelligence behind it, says Gabi Zijderveld, chief marketing officer at emotion recognition technology company, Affectiva.
“Many of our interactions with A.I. systems are currently very transactional, and often superficial and ineffective. That’s because these systems don’t truly understand how we’re reacting to them, and are therefore unable to adapt to how we’re engaging with them. We think that’s a fundamental flaw in technology today,” she explains.
On the other hand, say for instance a person’s home was seriously damaged as the result of a natural disaster. An independent agent would be able to empathize and understand exactly what the homeowner is going through. They would act with compassion as they answer their customer’s questions and offer advice on what to do next. Being able to read emotions and put yourself in another person’s shoes is incredibly important in the insurance industry, which is a big reason why many customers still prefer to deal with humans rather than technology.
The Experience Factor
Finally, there’s the experience that independent agents bring to the table. Technology can’t be built with the totality of an agent’s work experience. Veteran have been part of the insurance industry for several years, and some for decades. During that time, they’ve learned the ins and outs of the insurance world and accumulated a wealth of knowledge that’s hard to quantify.
It’s this experience combined with the understanding of how to deliver an amazing customer experience that makes independent agents such an asset. They act as trusted advisors who look out for their customers and as advocates when customers file a claim, explains the team at The Hanover Insurance Group.
Independent agents are licensed professionals who possess a special set of skills to help their customers navigate the insurance process, adds insurance consultant Marianne Bonner. In the event of an accident, they can be a huge help when filling out claims forms and will walk customers through claims handling procedures.
This translates into a simplified experience for insurance customers, writes family-owned insurance brokerage SAHOURI. An independent agent handles all of the complex, confusing aspects of insurance on the customer’s behalf, while offering their personal experience to make things as streamlined as possible.
Continuing to Thrive in a Digital Marketplace
Technology and AI certainly have their benefits and are now a big part of the insurance world. But at the end of the day, there are just some things they can’t account for. That’s part of the reason why 60 percent of people who bought insurance directly online within the past decade ended up switching back to an independent agent, according to The Hanover Group. Although technology can do a lot, it still can’t replace the uniquely human skill set that independent agents possess.
“This is not about being a luddite,” Ron Miller adds. “Technology marches relentlessly forward, and it would be foolish to argue otherwise, but some things remain fundamental, and people-to-people communication will continue to be one of them.”
So it’s important to remember this when identifying your unique selling proposition and emphasize the points mentioned above when marketing your business. Doing so should help you flourish even as technology becomes increasingly intertwined in the insurance industry.
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