Harnessing the Power of Data: How to Transform Your Insurance Brokerage

Business.com / Insurance / Last Modified: August 28, 2017
Photo credit: thodonal88/Shutterstock

Learn why it is imperative for insurance agents and brokers to start using data to upgrade their agencies.

Most insurance agents suffer from moderate to severe technophobia. And big data? Forget about it.

According to a McKinsey & Co. report, the average age of insurance agents is 59, and 25 percent of agents are expected to retire in 2018. Many of them are not likely to make an extra effort to learn about the new tech coming out. That leaves it to the up-and-coming generation of agents. But since they're learning the tricks of the trade from the senior staff, they're not learning to appreciate the flood of data that would be available to them through the latest technology platforms.

Does this matter? Yes, it does. Here's why.

Disintermediation threatens your very existence

More and more consumers are turning to the internet for insurance quotes. They want to do business with direct writers and cut out the middleman – the agent. They're finding cool, modern platforms that boast capabilities such as these:

  • Artificial intelligence and actionable insights that they can use to tailor an insurance plan to their unique needs

  • Data analytics to predict coverage needs

  • User-friendly interfaces

This shift toward what's known as disintermediation threatens the job of every single broker and agent. We see the proof in other industries.

Here's why: The latest platforms, for the most part, do make good on their promises. They have a single view of the customer journey. They can often tell the clients what they need, at the minimum, in terms of insurance.

And let's be honest – most brokers aren't currently adding value to the agent-client relationship. They're just adding cost and annoying sales pitches that customers don't want to sit through. Most agents aren't tailoring their advice to their clients' needs. They're not consultative. They're just glorified salespeople. At least, that is how most clients see them.

At the end of the day, those agents are actually missing sales opportunities for the brokerage by not having a data-driven, 360-degree view of a client's situation and needs. So, if consumers can buy straight from a direct writer and get better service, why do they need agents?

The answer is that they don't … unless you can integrate your knowledge with a data-driven platform and provide better service than what customers can get on their own.

Most people don't intuitively know how to create their own comprehensive insurance plan. Even when they educate themselves, they don't know the nuances of the industry, because they're not professionals. They're consumers. They may be insurance literate, but they're not fluent. You are. 

This is where a cloud-based platform gives you a leg up. You get easy access to previously siloed data, so you can get actionable intelligence and provide customers with a valuable, tailored service that they could not possibly get with a DIY approach.

The power of actionable intelligence

According to many agency principals and CFOs, it's difficult to pull any kind of usable data from their existing systems. It's trapped in a non-integrated, siloed environment, which means they can't see what's going on in the business and what's happening with their producers. They don't get real-time feedback. Most of the time, they have to wait days, weeks, or even a month or more to get sales reports. Even then, they're not getting all the data that's relevant to the business.

This is another reason why some agencies and brokerages are switching to a cloud-based platform. This type of platform lets you see everything in real time where dashboards reflect the current state of the brokerage. The focus is on the customer experience, and agents can make customized recommendations.

For example, integration with third-party applications like Outlook allows agents to capture and store customer details from email so they can be used later during a sales call. If a client mentions their child is graduating college soon, they are starting a family, or they are buying a new home, these key pieces of information can be scraped, stored and used later to recommend appropriate insurance at just the right time.

Improve the productivity and profitability of your agency

The right cloud-based management platform will be modular and flexible. But it will also provide access to the data that can help you grow your agency:

1. Agent performance tracking

Managers can monitor the performance of agents and track the time they spend on each client. They can keep tabs on the entire agency, monitor sales totals and track how much business an agent is bringing to the brokerage.

They can even drill down and see how an individual agent's sales figures, retention and persistency compare to the company as a whole. This can also provide a source of friendly competition amongst agents, motivating them to achieve their optimal performance.

2. Predictive analytics

This can help agents make smarter sales presentations by ditching cheesy and irrelevant pitches so they can get to the point with customers, recommending only appropriate products. This way, agents spend less time on clients but can actually increase sales and profits.

3. Streamlined growth

When new products come online, or when the brokerage wants to expand into different markets, the platform can be easily expanded without disrupting the day-to-day operation of the business.

4. Automation

Administrative tasks can be automated, reducing the need for manual data entry, which enables the brokerage to become more efficient and easier to scale.

Where to go from here

If you choose the wrong insurance agency management platform, you could put your brokerage in more danger of becoming obsolete than it is in right now. Most platforms don't have tight integration and secure APIs with third parties, for example. Most platforms don't give you a top-down, 360-degree view of the brokerage, and most are not data-driven.

Bottom line: most platforms don't provide easy access to the actionable intelligence you need to compete and thrive in today's insurance market. So, if you do decide to upgrade, choose wisely. Do your due diligence, and make sure you find a solution that is flexible and robust enough to meet your agency's data-harnessing needs.

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