I
want to talk with you about several key technology trends that I believe will
be real game changers for insurance agents.
These
are technologies that are now, or will soon be, crucial for agents to adopt in
order to remain competitive. In tonight’s
talk, I will cover social media, agency web sites, consumer-facing web portals,
agency management systems, real-time and downloads.
Did
any of you follow the recent Space Shuttle mission to repair the Hubble Space
telescope? It was truly amazing. And, not only because of the success of the mission itself: using the micro-blogging service
Twitter, astronaut Mike Massimino became the first astronaut to “Tweet” from
space. He provided his followers
on Twitter, with a unique behind-the-scenes look at what it was like to be in
space, as he was experiencing
it. Anyone who chose to follow
Massimino on Twitter during his training, and later during his flight, could
receive his short messages and share his experiences, almost in real-time.
It’s
the informality, immediacy, relevance, and
fun that are increasingly making social media the way that millions of
people choose to connect with one-another. AND, social media is emerging as a potential game changer in
the way businesses connect with and engage their customers.
How
many of you use any form of the
social media today, such as Facebook, Twitter, MySpace, LinkedIn or blogging? Well if you’re not now, you will soon,
I can pretty much promise you that.
Indeed, technology is enabling
consumers to change their relationships with the organizations and brands in
their lives through the one-to-one and one-to-many relationships of social
networking. The profound impact of
this sociological transformation is just beginning to be felt in the insurance
and financial services industry.
In seeking
to reach a new generation of insurance buyers, who will have been “raised” on
social media, relying on the “old” technologies like e-mail and phone, alone, just won’t cut it.
How many
of you have kids in their late teens or twenties? I don’t know about you, but I can’t get my kids to respond
to e-mail anymore! I connect with
them more effectively via Facebook, as well as with texting and instant
messaging. To my kids and many of
their generation, e-mail is so “old
school” and social media offers a more informal and richer experience. E-mail is great, and will be around for
a long time to come. But, did you
know that according to Symantec, over 90% of all email today is spam! Social media offers a way to connect
with customers that goes beyond e-mail’s limitations.
So,
in order to connect with this next generation of buyers, you’ll find that
social media will be a necessary and important part of your marketing
program. And, not only to find new
buyers, but also to offer value-added services that will give you a key
differentiator and competitive advantage.
Further,
social media is not just for young
people. Facebook for example, has
more than 200 million active users. More than 100 million users log on to Facebook at least once
each day. More than two-thirds them
are outside of college. And, the
fastest growing demographic is those 35
years old and older!
So,
how can insurance agents use social media?
Well,
if you already connect with customers via e-mail and e-newsletters, using social
networking should come relatively easily. You can easily and quickly set up a Facebook page or Facebook
group to provide your existing and prospective clients with information about your
agency, your products and services as well as about your agency’s involvement in the community.
For
example, I recently learned about an agency that’s using Twitter to provide their
clients with up-to-the-minute information during local windstorms—giving more
localized and timelier information than other media, via short messages that
can be read from a smartphone or PC. By offering value-added services like this, social media can
be an extremely low-cost way to “touch” your clients more often, and keep you top-of-mind when they think about
adding coverage, changing policies, adding new policies, and other services.
Another
important factor in considering a social media strategy is in attracting and
keeping a new generation of producers
and CSRs. And, for exactly the same reasons—it’s the technology THEY use in their
lives.
We
are in the midst of a revolution. Social
media, including Twitter, Facebook, LinkedIn, MySpace and blogs, will change
the way people buy and sell insurance and provide unique and fun ways to engage
customers. Further, a Facebook
page, or blog, can also help improve your search engine ranking and increase
traffic to your Website. My
suggestion is that you just jump in
and try it.
For
our part, today, we now have a Facebook group, through which agents can share
their experiences with our products and services and get advice from other
users about what works for them, best practices and more. It also allows us to share information
about what we’re working on and get immediate feedback.
The
next technology I want to discuss is YOUR
Website.
How
many of you believe you are effectively using your Web site to reach and
attract new clients?
Peter
van Aartrijk (“are trike”), an insurance industry veteran specializing in
marketing and communications, notes that agency Web sites should act as an
agency’s busiest storefront. He
adds that he worries about the calls agents don’t get because of their poor Web
sites. He states that, “Web
visitors might naturally think if you aren’t taking care of your Web site, you
also might not be taking care of your records.”
Here
are some questions to consider about your Website:
·
Is your Web site Search Engine Optimized to
maximize natural search ranking?
·
How readily can your agency be found via
Google or other search engines?
·
What is your page ranking compared to your
competitors in the markets you serve?
·
Do you track and analyze Web traffic via
Google Analytics?
·
Does your site clearly present a compelling value
proposition and reason for
prospective clients to do business with you?
·
Is it easy to navigate?
·
Does it provide information of interest to
clients in an attractive and visually appealing manner?
·
How are you driving targeted traffic to your
site?
·
How do you capture visitors and leads?
These
are among the important factors to consider in order to ensure that your Web
site is working effectively for you.
With
these factors addressed, a great next step to creating a strong online presence
will be to add an online auto-quoting engine on your agency’s Web site. This
will give you a 24/7 quoting capability and effectively extend your marketing reach,
as well as extending the hours available to service
prospective clients. Providing
consumers with online quotes through your site can help you level the playing
field with DTC insurers that provide consumer-facing online quoting.
Ultimately,
I believe agents will have access to the tools to rapidly deploy a full-service consumer portal, by
interfacing the agency management system
to their Web site to serve-up client account information and policy data, take online
payments, process claims and more.
Agency
management systems clearly represent
a game changer. If you do not currently use an agency management system, or if you’re not fully
utilizing your existing system, here
are some key questions to consider:
·
Is your agency operating as efficiently as
you would like?
·
Where do you spend most of your time: growing your business or organizing it?
·
Do you cross-sell
effectively?
·
What is your customer retention rate?
·
Do you effectively utilize your client list
and prospect list for marketing?
·
How easily and rapidly can you access client policy information?
·
Can you download policy information and do
real-time data inquiries with my carriers?
·
Are you managing documents efficiently?
·
Are you minimizing your E&O exposure?
·
Are you drowning in paperwork?
As
you know, customer retention is an important
factor in the profitability of your agency. And, it’s important to maximize revenue per client by selling
clients multiple lines. Further,
profitability can increase, if you make your staff more productive and focus more on selling and less on managing.
Today’s
agency management systems have become indispensible enablers, for agencies to sell
more policies more quickly, cross-sell, stay competitive, control costs, and to
reduce paperwork and overhead.
Advanced agency
management systems with cross marketing capabilities,
allow agents to rapidly and easily market additional insurance products and
services to existing accounts. Using
the agency management system’s cross marketing tools to mine your existing account data, agents can, for example,
immediately identify auto policyholders that do not yet have homeowners’
insurance, or visa versa. Then,
the system can automatically e-mail, fax or print out marketing letters to
these specific clients. This can
give you an effective cross-marketing program.
On the
horizon, are marketing add-ons, which
will allow agents to plan, launch, track and measure marketing campaigns, directly from their agency management system.
I am also excited about the
prospect of making the agency management system social media-aware, going forward.
We
believe that the next generation of agency management systems, will provide an
even greater compelling value, in helping you execute and manage the new and evolving
activities your agency will be concerned with in the future.
And,
today’s agency management systems already
provide tremendous capability. Yet, many agencies that DO use these systems, do not fully take
advantage of all their
revenue-generating and cost-saving capabilities, such as real-time inquiry, downloads,
document scanning, custom reporting and cross-marketing, to name a few.
I encourage you to reach
out to your system provider to ask them how you can implement these features
and functions. For example,
webinars, training videos, newsletters and users’ groups provide a means for
you to learn how to get the most bang-for-the buck with your agency management
system.
The
next technology I want to discuss with you represents a dramatic improvement in workflow. I’m referring to Real-Time.
So,
what exactly is real-time?
Real-Time,
is simply the ability to click on a button from a client file in your agency
management system, for immediate access to carrier information on that client. The transaction may be a quote, billing
inquiry, claim inquiry, loss runs, policy view, endorsements or a request for
information. This approach
provides a single workflow for client servicing or quoting and improves the
delivery of service to clients.
The
Agent Council for Technology, or ACT’s, definition of Real-Time, states that
real-time data exchanges and transactions start and end in the agency’s
management system or comparative rater.
Today’s
advanced agency management systems
provide Real-Time Inquiry, which allows the agent to access the carrier’s
website directly from their agency management system for: Policy Inquiry,
Billing Inquiry, Claims Inquiry, Website Logon, Payment Posting and Endorsement
Bridging. When coupled with a
comparative rater, Real-Time Rating is also provided.
The
ROI for real-time is very compelling.
ACT,
has conducted studies, which have shown, that for agencies using at least one real-time tool, most of
these agencies cite up to 60 minutes-per-day in savings.
Additional
and significant timesavings, are also
afforded through Carrier Downloads.
Carrier
download is the movement of customer policy data from an insurer, directly to the
agency management system. This
download normally occurs as a batch process after a transaction is performed by
an agent, such as adding a vehicle or changing a deductible; or by the insurer,
such as the creation of an automatic renewal notice.
With
carrier downloads, no action need be taken by the agent. The information is automatically
downloaded to the agency management system database, daily. Such information
includes: client data, ACORD form information, and policy data, such as line of
business, coverage, company, and premium information.
Here
are some of the benefits of carrier download:
·
It eliminates your staff’s processing
backlog.
·
Your staff will not need to rekey data, thus, eliminating the chance
for manual input errors.
·
The information in your system will be
current and will match the policy detail in the carrier’s system.
·
It enables you, to realize the workflow
objective of relying on the agency management system as the primary source of information when communicating
with your customer.
·
Your agency can focus on service and sales, not data entry.
·
And, when implemented with all your carriers
it will eliminate paper processing.
On
the horizon, are claims download, commissions download and potentially
more.
As
you can see, fully utilizing the powerful capabilities of your agency
management system, when coupled with real-time and downloads, can
help you turn up the heat in your marketing program, increase revenues, reduce
overhead and eliminate errors.
So, given
the importance of technology to the success of the independent agent, how much
should you budget for information technology
going forward?
According
to ACT, in their report entitled, “A vision of the Future for Agency
Technology”, the average technology spend for insurance agencies ranges from 1.9%
to 2.9% of net revenues (where net revenues equals agency revenues less commission
expenses).
In
fact, some market leaders are spending more than 3.5%. For example, Daly Insurance of
Michigan, a 2009 National Underwriter Agency Technology Achievement Award
Finalist, reports that it spends 4% of its net revenues on IT. This agency cites technology leadership
as a key value-add for their clients, giving them an important competitive
advantage.
Like
any other business, insurance agencies adopt new technology at different rates. Some agencies like to be among the
first to adopt a new technology.
These early adopters see technology as a differentiator and as a
competitive advantage. On the
other end of the spectrum, other agents take a far more conservative approach, adopting a technology once it’s fully proven
and in been in the mainstream for some time. Most, however, fall somewhere in-between. There’s generally no right or wrong
approach.
What you need to do is to be aware of key trends in technology and to track them. You should jump in when you believe it
will add value to your business and
to your customers. That value can be in offering better
service, giving you a cost advantage, writing more policies to more clients, or
providing you with a key differentiator.
Any of these can represent a
competitive advantage for your business.
In
closing, I believe that the technologies I’ve discussed here are now, or
will soon be, crucial for the independent agent to adopt in order to remain
competitive going forward. It will
be interesting to track these and see which ones actually do make the most
impact in the future.
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