Is Your “Tech Stack” a Spreadsheet? Three Causes to Put money into Insurtech Now
This post is part of a series sponsored by AgentSync.
The insurance industry has been around for thousands of years. But that’s no reason why your agency should still work like it did in 1916! One of the greatest advantages of the modern insurance industry is its ability to provide generational opportunities for thousands of families. The downside is that the previous generation technology often comes with the package.
It’s hard to imagine a business running with paper files and spreadsheets in 2021, but the insurance industry is notorious for being behind when it comes to adopting technology. Chances are, at least a few people reading this right now feel very challenged!
We have already written about the types of technology insurance agencies need to prioritize if they are to be attractive to investors or buyers in future M&A activity. Even if selling your agency is the last thing you think about, digitization still has great advantages. Here are three of the best reasons why your agency should invest in Insurtech now.
Your competitors are investing in technology
OK, so peer pressure isn’t always the best reason to do something. But in this case, the fact that some insurance agencies are quickly leaving the industry behind in adopting technology has two major implications:
- First, those who do not turn to technology and use it to their advantage will soon be left behind for those who do.
- Second, there is still time to be an early (er) adopter and stand out from the crowd by using technology to improve your business processes and customer experience.
Now that Millennials are the largest age group in the United States, your current and future customer base won’t be patient with slow, manual processes. Your agency’s future clients are digital natives who expect a level of accuracy, transparency, and control when buying insurance that an old-fashioned agency simply cannot offer.
Apart from the Millennials, the second largest subgroup of the population (baby boomers) is also becoming more tech-savvy every year. Research from 2019 shows that 68 percent of boomers own a smartphone and 11 percent use their smartphone as their primary online access. Those numbers are no doubt higher now, especially as COVID-19 forced almost everyone to step up their tech game.
The point is, almost no one still loves doing things “the old way” when it’s slower, less personalized, and not possible from anywhere. If your agency isn’t using Insurtech solutions that provide the service customers want, a competitor definitely will.
Your workforce longs for better ways to do things
Just as your prospects choose an agency that offers them a modern experience rather than converting their lives to 1950, your agency employees (including producers and customer service reps) want access to technology that makes their jobs easier.
Think about how much time your producers spend on tasks that are not really income. Think about how much time your customer service reps (CSRs) spend on tasks that aren’t directly serving customers. And if you’re not sure how much time that is, we recommend asking them because we guarantee they will.
Not only does the agency lose money to producers who don’t sell and CSRs who don’t focus on loyalty relationships, but the employees themselves are frustrated with their lack of productivity when they spend time on day-to-day tasks.
We know it sounds like a broken record, but the point cannot be stressed enough: with the aging insurance workforce and the battle for new talent for the industry, technology is key and acts as a differentiator for the agencies who embrace us it.
Technology can increase your sales and reduce expenses
Increasing your sales and reducing your operating costs are side effects of the first two reasons, but we thought it deserves a mention of its own. In addition to increasing sales and reducing expenses just because agency staff work more efficiently and customers extend year after year, investing in technology can directly bring new insurance deals.
- Automating email addressing and tracking doesn’t take any extra time for the people you pay, and can result in deals being closed that might otherwise have fallen out of your sales pipeline.
- The ability to quickly onboard licensed agents from different states and know that their credentials are valid means your agency can make more money if those producers start production faster.
- Word of mouth plays a huge role in how most independent agencies find new clients. There are now tools to help you reach out to your current clients, ask for recommendations, and even post them on the web without the manual intervention of your agency. These positive online reviews can lead straight to new business when people decide which agency to turn to for a quote.
Undoubtedly, there are many more reasons why your agency should invest in modern technology. From attracting more and better producers to avoiding fines and penalties, bringing technology to your insurance business is sure to be a solid investment.
Vendor licensing and compliance management are an area where technology investments can have a big impact. Watch a demo to learn how implementing a manufacturer compliance management system can grow the agency.
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