In the age of digital transformation and the artificial intelligence (AI) revolution, the agent continues to be the most critical stakeholder in the insurance distribution landscape. Embracing advanced digital tools and automation will ensure agents drive future growth for their insurance companies.
According to an
The changing role of agents in the digital world
Digital technologies are revolutionizing the role of insurance agents.
Traditionally tasked with selling and servicing policies, the agent of the future is a proactive fiduciary consultant and advisor, leveraging technology to provide enhanced functions and offerings. As they transition from product-centric to customer-centric, agents will serve as "financial doctors" or even 'finfluencers' (financial influencers) capable of driving market sentiment.
AI-enhanced operations, sales and processes will give agents the time to cultivate long-term relationships to help them stand out in a crowded marketplace. Less time spent on transaction-based selling and servicing means more time for personalized sales and advice. Forward-looking agents seek new and innovative products to meet the changing needs of their policyholders. Analytical tools will improve the agent's ability to cross-sell, offer innovative solutions, customize products, and provide greater value to policyholders.
Meanwhile, agents want to be more involved with the underwriting process, transforming their role from being transactional to more solutions-oriented. To achieve this, it is vital for carriers to invest in world-class front-office capabilities and provide agents with the appropriate tools. These include, but are not limited to, risk mitigation tools, meaningful customer data, and the ability to seamlessly integrate with third-party information.
AI's role in the insurance industry
Although the industry is traditionally resistant to change, AI is having a remarkable impact on how carriers, agents and customers operate and interact. This advancement directly affects the carrier's overall business growth. As a result,
Traditionally slow to adopt new technologies, carriers often invest in customer-facing applications instead of addressing distribution infrastructure concerns. By introducing AI-enabled technologies that support agents, carriers invest in the agent experience by helping them enhance sales, maintain their focus on selling, and stitch together customer relationship management (CRM) and sales performance management (SPM) experiences.
Companies that don't adapt to developing trends and technologies risk losing their agents to more forward-thinking competitors. In today's competitive insurance market, it's vital for carriers to invest in the tools and experiences that provide advantages to their agent workforce. If they don't, they risk losing their best and brightest agents to competitors.
Adopt a "crawl, walk, run" approach for an enhanced experience
Ultimately, investing in new technologies is worth the time and expense. Nonetheless, embracing these technologies is a slow progression. To ensure a successful transition, it's best for the industry to adopt a crawl, walk, run approach. The "crawl" approach involves using market-leading tools to integrate the agent's experience into a comprehensive "agent portal." A portal offers a unified view that manages an agent's compliance, onboarding, training, compensation and book-of-business requirements. For instance, if a carrier's agent workforce utilizes a specific CRM system, it is beneficial to use a compensation tool that integrates seamlessly with their CRM platform.
The "walk" approach leverages the advent of mature AI platforms to extend the agent's current capabilities. GenAI and other democratized AI technologies handle tasks like policy servicing and traditional product sales, letting agents focus on building long-term, value-driven relationships with their clients. AI tools will enable agents to capture and process customer data through multiple channels, including conversations, and help drive real-time decision-making around product fit, coverage needs or 'next-best action.' AI can also provide feedback to agents regarding their conversations, helping them become more adept at solving problems and improving interactions.
The "run" approach has yet to be determined, but it will likely involve a significant amount of insurance sold through automated and embedded channels. Agents will leverage advanced AI and their personal social media following to influence customer behavior and build a brand for their insurance company, positioning themselves as trusted advisers. They also will use their deep knowledge of the customer and their needs to inform product innovation.
One company that has already turned the notion of insurance on its head is
As AI is embraced, the insurance landscape will change by consolidating smaller agencies and brokerages into larger ones. This is because more available data will generate more insights, and companies that have invested in data, AI and machine learning will have a significant advantage over the competition.
"Forward-thinking agents see that AI is a tool to enhance — not replace — the vital work they do as trusted advisors,"
Avoid missteps
Although the insurance industry tends to be slower in adopting technology than other sectors, there is still the danger of getting carried away with the exciting new tools that pop up daily. That's why it's vital for insurance companies to be aware of how a particular technology works, its impact on the agent experience, and whether it can increase revenue, reduce costs or improve market share. It's easy to jump on the bandwagon before understanding the long-term effects of embracing a new product.
While technology hasn't been the focus for most insurance companies until recently, that reluctance may bode well in terms of not getting caught up in the hype and ensuring that the tools the industry ultimately incorporates will provide long-term net gains. Carriers, such as
