If you have gone three days without seeing the term “insurtech,” well, you are probably on the remote Caribbean island with no means of connecting facing outward insurance world. Putting your head in the sand on some nice island may appear tempting, but there is an issue that any insurer with a vested interest in a real estate agent and broker distribution model for personal lines can't manage to disregard the situation.
SMA studies show that 30% from the approximately 600 insurtech startups being tracked are focused on disrupting and displacing conventional distribution channels – the largest of insurtech categories. Exactly what does this suggest? With great urgency, personal lines insurers have to work with agents and brokers to increase connectivity capabilities so that traditional distributors can execute sales and repair transactions at the same speed and efficiency as the newly minted distributors emanating from the insurtech world.
Most personal lines insurers are not asleep at the wheel in accordance with the overall situation. 64% of survey respondents indicate the very best business driver for purchasing agency connectivity is improved customer experience for that agent. No. 2 reason for investment, agent/customer retention, follows close behind with a 56% response rate. Despite the fact that these two reasons correlate from a strategic and tactical perspective, 37% of respondents indicate they're mainstream investors in agency connectivity, not investing for differentiation, along with a further 11% indicate they aren't investing at all. This leaves a fairly large hole for insurtech-enabled distributors they are driving straight through, gathering up customers – customers who used to be with traditional agents and brokers.
I am a large fan of remote Caribbean islands, so any reader who has been in holiday and without the insurtech ref is forgiven. However, creating seamless and transparent personal lines sales and service transactions between agents and brokers and insurers is crucial. This is actually the personal lines consumer mandate!
There are competitors in the market who've figured out the technology bit of the equation. And no it's possible to assume that tradition and familiar corporate logos are likely to protect share of the market.
Our recent SMA report, Agent-Carrier Connectivity: Personal Lines Insurers, provides survey results and looks at the subject of private lines agent connectivity. Last month, the commercial lines view of this topic was published. There are some interesting differences. Within the next few weeks, we'll close the loop using the agent and broker look at connectivity, so please stay tuned.
