Why insurance agents must embrace tech for customers

In 2021, the insurance industry employed roughly 420,000 agents in the U.S. alone. It's a profession that, for most of the industry's evolution, was indelibly linked to the very core of what made insurance, insurance.

As the proliferating cluster of insurtechs and adjacent startups continues to expand automation and hone efficiency wherever the industry allows, fear has risen among insurance agents that they may soon be replaced entirely by automated systems. 

A changing industry is inevitable, but it doesn't have to come at the expense of agents.

Insurance agents offer an irreplaceable personal touch, acting as trustworthy figures, ready to step in when their customers need help most. That said, they must also be prepared to embrace the very technology and automated tools that threaten them and learn how to utilize these tools to improve the ways they work.

Building trust
Insurance agents can still play a critical role for consumers. A tangible touchpoint for policyholders, agents alleviate the burden of navigating cumbersome, confusing policies and offer the assurance of a human connection. 

When people interact with their insurance policy, they are often in crisis, unlikely to be in the headspace for dealing with automated phone systems or chatbots. Even as the case for automation or self-service digital experiences grows, human interaction remains compelling. Roughly 60% of consumers still prefer speaking to a real person over a chatbot, even if a wait is involved. 

Empathy and humanity remain powerful advantages for human agents in creating a relationship of trust with customers and policyholders – a business necessity that tech simply can't replicate. 

Agents must adapt
But empathy alone won't save insurance agents. Although little has changed in terms of phone etiquette or the art of talking clients through a policy, the flow of information and productivity today is rapidly changing. Agents must be prepared to keep up.

It is promising, then, that the ecosystem is already adapting – investing in the future by utilizing tech to up the effectiveness of processes throughout the value chain and boost overall growth.

Digital adoption has big implications for how successful agents will be in retaining customers: despite the continued importance of human interaction, 41% of policyholders report they would abandon a provider who lacks sufficient digital capabilities. It is unsurprising, then, that agencies that prioritized technological adoption grew about 60% more on average than those with low technology adoption rates.

However, there's a flipside. Insurtechs and other industry disruptors must recognize that legacy insurers, which still set the tone for much of the industry, are unlikely to change their business processes overnight. In the same way that legacy enterprises must adapt to new ways of working, new players in the space must also integrate innovation along the preexisting grooves of the insurance ecosystem, which still relies heavily on agents for success.

Finding the right tech
Adopting new tech tools just for the sake of not lagging is a fool's errand. Rather, insurance agents must be strategic about which technology they embrace, and why. Is it for reaching new customers? Communicating with existing ones? Agents must identify their audience, assess primary needs and adopt technology that addresses them.

Start by considering how potential clients prefer to interact – i.e., a website versus a mobile app versus phone calls. There are many features and tools to consider in the policyholder's journey: from online pricing solutions that ease the onboarding process to video conferencing capabilities that facilitate quick customer connection, and more.

Other useful tools include advanced data analytics which give agents the ability to target high-quality leads and address festering issues before they become unmanageable. Data analytics are also uniquely capable of analyzing customers' risk and crafting highly personalized offerings and can even detect fraud by spotting minute discrepancies that might go unnoticed by human eyes.

Shaping the future
"Change or go home," this powerful message rings true for professionals of any kind in our fast paced, rapidly evolving world. Indeed, the power to stave off replacement lies with agents themselves.

By leveraging the perennial need for human connection and a personal touch while also adopting technology and digital strategies to optimize efficiency and effectiveness, today's insurance agents will not only ensure their future in the industry – they will be able to shape it.