Important Technology Trends for Insurance Agents

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.