Digital Insurance examines the impact of digital transformation on insurance agents. For more:
One could make the case that the COVID-19 pandemic accelerated the insurance industry's digital transformation not just by requiring carriers to implement more digital processes. It also forced insurance agents to become more adaptable and communicative with their clients in the digital world.
Quoting, underwriting, policy management and claims processing have seen a digital revolution with the rise of insurtechs and automated processes, enabled through tech like AI or machine learning, and the increased adoption of such solutions is a likely result of the remote work brought on from the pandemic. Just as companies have adjusted their operations and leveraged their technology and industry knowledge to support the needs of their customers, agents, too, have adapted to their roles and responsibilities to meet the needs of their clients.
Convenience and evolving customer expectations
Dana Halicki, Grange's vice president of Customer and Agent Experience, notes that one of the most major differences an agent faces today, compared to experience prior to the pandemic, is the decreased level of in-person interactions with customers and the surge of online insurance customer check-ins.
That's a marked difference from the social realm, Halicki explains. Even if a customer is more willing to go back to pre-pandemic habits socially in their free time, when it comes to their business relationships – like with their insurance agent – they're keeping it online.
"Pre-pandemic, you had a lot of agencies who were accustomed to learning about their clients and serving their clients in a very in-person way," Halicki says. But post-pandemic, she continues, "business transactions are still occurring virtually, in part because of the convenience factor of it, both for the client and for the agent."
The Independent Insurance Agents & Brokers of America's (IIABA) Chris Cline, executive director of the Agents Council for Technology, explains that though the industry was warming up to digitalization prior to COVID-19, pandemic restrictions drove companies to more intentional action.
"The big thing was to quickly offer more options for your consumers to interact with you; whether it's making changes to their current policy or seeking new coverage, make payments, how to handle claims, and then for their staff to be able to do the work and get into all the systems and have a cohesive process," states Cline, discussing the initial challenges of working remotely during the pandemic. "I think the fascinating thing about our industry, by and large, the core processes themselves, at least by name, are fundamental: Issue new policies, solicit new marketing, handle claims and do endorsements... But the 'how' has changed pretty quickly in the way the business is conducted."
The urgency of COVID-19 was a major motivator in the digitalization of transactional customer-agent interactions and processes.
"You read some of the industry articles just around how much digital tools are used within agencies, things like e-signature and paperless policy offerings and communicating with clients via portals or social media or video messaging," Halicki says. "All of those things are new ways in which agencies are working, where technology and digital solutions just play a bigger role within the agency than they were playing pre-pandemic. It forced agents to look for those types of technology solutions to enable their business, and a lot of them have stuck post-pandemic."
Cline adds, "I think in some ways, the industry was digitizing already… COVID was, despite all the negatives and challenges, the great accelerator. Literally, in one day, we had to become far more automated just to effectively run our businesses."
Digital communication and accessibility
Martina Conlon, head of property and casualty insurance at Aite-Novarica Group, says that the outcome of all these challenges is that agents are getting more creative in the various digital channels through which they interact with their customers.
Conlon says, "The most common way for agents to interact with their prospects and policyholders was the telephone and email… After and during the pandemic, everybody has electronic signature now, everybody now has Zoom, most agents have adopted some kind of web meeting platform… and different online tools in order to collaborate in a better way."
Cline also notes the effects of digital on agent-to-client communications – digitalization has played a fundamental role in transforming communications through accessibility and education, and agencies are now embracing a more transparent and educational approach to their outreach using technology.
"Not too long ago, agencies would have been reluctant to advise or educate a consumer publicly, but now, there are phenomenal blogs and vlogs and social media content, and agencies willing to share their expertise and educate their consumers in different ways – being positioned as an expert and adding value using the tools that are available. So whether it's providing insight, marketing, or making video proposals... It's just a very different experience," Cline explains. "It's fascinating to see things now on an agency's website and social media that they would have previously viewed as proprietary, and it's just not the same anymore. I think that's just a world where different generations are more transparent… they're looking for insight and education before they buy. It's a great way to build a relationship with somebody, maybe weeks or months before you ever meet them."
Betty Bergquist, American Family Insurance's vice president of Agency Sales and Service, shares that the digitization of insurance processes during the pandemic showed positive results in customer feedback.
"When the pandemic first hit, what AmFam did to help our customers, we were the first to offer a refund to our customers, a premium relief. And I think that sets the foundation for how we reminded our customers of how committed we are to them," Bergquist explains. "I would say that that, along with our ability to quickly adapt and stay connected to them through technology, has really helped our retention rates. Our customer satisfaction scores have increased greatly during the pandemic and have remained strong since. I think the fact that we could adapt and find ways to maintain their relationship with [American Family] is being reflected in their loyalty to us."
