| E-books are distributed by Amazon on iPads. Apple receives smartphone screens from Samsung. In the business world, "coopetition" is nothing new. Every day, new partnerships are formed that are beneficial to both parties. Therefore, it should be no surprise that digital insurance carriers and Agency Principals now see value in combining their powers for good – when initially thought to be disruptive to one another. New studies have shown that consumers and businesses are reevaluating agents as a critical last mile for important consumer and business segments, even those not currently working with them.
The numbers speak for themselves. Although independent agents were predicted to end, they have remained resilient. Agents sell over 50% of overall premiums - a higher share than ever before - and this share is growing. What's the reason? As a result of the complexity of insurance. Customers need help understanding their risk profiles and running through the hypothetical situations that could impact them. In the world of risk and insurance products, agents serve as trusted advisors and can guide consumers in the right direction.
Creating a Win-Win Situation
It is possible to create a win-win situation for agents and digital carriers working together. As a result, digital carriers can reach a much larger audience. Homeowners' insurance is unlikely to be purchased directly from carriers by high-end homeowners, for example. This process requires the guidance of a trusted advisor. Working with agents can allow digital carriers focused on high-net-worth individuals to compete for their business.
Additionally, agencies/agents can help newer digital carrier brands gain acceptance and raise their profile. Especially if the name isn't always associated with insurance, some older customers might hesitate to choose a carrier with a name they don't recognize. A digital carrier's biggest promoter can be its agents.
Both ways work. Agents benefit from digital carriers in many ways. Agents cited how easy it is to work with digital carriers as a key benefit of Agentero's new agency customers' survey. They also noted that partnering with digital carriers enables them to reach new clients, particularly millennials and those seeking a more digital experience. Despite the coopetition, most independent agents are used to working with insurers with multichannel distribution strategies.
Getting the Most Out of the Partnership
There are different types of partnerships. These four areas should be considered when partnering with digital carriers.
Find the change agents. It can be challenging to convince an agency to embrace a new insurer with new products and get out of its comfort zone with the carriers they are familiar with. While agencies don't have to have all the tech in place, they should be ready to embrace digital capabilities and promote the ease of the end-to-end digital experience to their customers. Digital carriers should promote their support capabilities and be prepared to help agents get familiar with your company.
Show them how working with you will improve their customer experience. For agencies, a key selling point is how your products and capabilities can help them attract new clients. Agency owners must ensure that their agency's customers enjoy a seamless end-to-end digital experience by embracing digital capabilities.
Make it a bi-directional partnership. Provide agents with ways to make your products more competitive. Many digital carriers, for instance, only offer a single line of insurance. Agents may have difficulty selling coverage if other carriers offer more lines, allowing policy bundling and discounting for customers. Consider discounts even if you don't offer multiple lines of coverage - even if some coverage is from another carrier.
In the data—build trust. Digital carriers must ensure there are no trust issues between you and the agent. Your agents should understand that they own their data and their customers. Carriers and agents must also make sure all third parties who process data for the agency have the same standards for protecting the data. For example, if you use an aggregator or a quoting solution. Make clear what information from these solutions will be shared with you and what stays with the agency.
Tap into ready-made agent networks. Find partnerships that can expose your products to more agents. For example, emerging companies have created solutions specifically for agents looking to increase their digital capabilities and eagerness to work with tech-forward carriers. These solutions can help you identify agents and connect with them about which of your products can serve their customers. Take advantage of the data these solutions provide. Despite not being able to share agency-owned data, they can still offer valuable insights, such as conversion rates and what agents like and dislike.
Direct-to-consumer strategies were the starting point for most native digital carriers. They acquired customers largely through search engines and social media. Acquiring customers through these channels is becoming more difficult as they become saturated. Many of these carriers will likely turn to agent distribution channels for their next stage of profitable growth. Growth opportunities are available through partnerships between agents and digital carriers.
Stacie King is a consultant for ACT Supporting Member Agentero. Agentero's platform currently connects agents with 21 P&C and Life companies providing quoting, communications, and automation tools to more than 1,500 agencies. Independent insurance agents use Agentero to access tech-forward carriers and to boost their revenue. The platform connects agents to insurers prioritizing digital capabilities such as quote APIs, online binds, and paperless, enabling agents to save time and deliver a superior customer experience through efficient product distribution.
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