The times, as they say, they are a’changing! And they’re changing even faster and more drastically than most people in the insurance sector have seen. While digital transformation began before the pandemic, COVID certainly sped up the use of digital technology because of the shutdown and consumer preference.
Trends in insurance technology have certainly changed since my generation was young. We relied on “technology” such as Rolodexes, mid-range terminals, and mid-range systems. Computers used in the workplace that may have used an intranet, but there was no such thing as the internet. We were resigned to doing business in our local area, making appointments within a drivable distance to visit our prospects, taking payments in person or waiting on a check in the mail, filing claims over the phone… I could keep going to explain the amount of hands-on work to provide customer service to our clients back when I was a young man. And if we needed to talk to one of our insurance carriers? You guessed it: we picked up the phone to give them a call.
And now? Now, digital trends in the insurance industry are exploding. They keep growing and improving how we serve our customers and prospects. I know that for many independent agents, this change can be intimidating. After all, it feels like the “future” came so suddenly, and practically every time you turn around, something new comes out. So, what does the future hold for digital trends in insurance?
Because that’s such a broad question, I have a secret to tell you before answering that. Once you understand the basics of the digital trends in insurance technology, it’s not as hard to keep up with future technology strategies.
We’re going to look at the future of digital trends in the insurance industry as they relate to:
- Setting up and running a fully virtual agency
- How the use of digital tools has destroyed the concept of geography
- Choosing the right agency management software for your needs
- What the use of artificial intelligence, machine learning, and other digital tools looks like in the insurance sector
I know it seems like a lot to cover, but I promise to make it easy. Remember that nothing says you have to take everything you read here and start using it today. You can choose one piece of digital technology and start with it. Once you’re comfortable, you can select another digital tool. And then another. Before you know it, you’ll have fewer repetitive tasks, and you’ll find yourself feeling more like a digital transformation expert.
While you’re here, don’t forget to sign-up for my email list. You’ll get the expertise you need to run an independent insurance agency that’s on the cutting-edge.
Communication as a Digital Strategy in the Future of Insurance
Of course, the insurance sector isn’t saying goodbye to the telephone. I’d say that all of us, including our customers and prospects, have a phone attached to us practically all the time.
Think about this: most states have a law against distracted driving, including cell phone use. According to nhtsa.gov, just over 3,000 people were killed in 2019 due to cell phone use. It’s a terrible thing, but my point is that when you look at others in a car, what are they doing instead of focusing on the road? What are people doing when they’re waiting in line? What are people doing when they’re supposed to be talking to another person right in front of them?
And now, think back to just a couple of years ago when the pandemic first started. So at the beginning of COVID, everybody fled home. The younger generation of workers hopped on Zoom or Google Meet. In fact, during the first year of the pandemic, Zoom removed its time restrictions on free accounts to entice people to use it for meetings or hanging out instead of face-to-face contact.
But many of my peers in my age range I know were using Skype or even GoToMeeting for six or eight months straight rather than trying something newer to them like Zoom.
Do you know what we, the insurance sector, learned from the use of this digital application? We learned that Zoom is a revolution in communications. We also learned that it was undoubtedly better than Skype or (heaven forbid) GoToMeeting, which was much more difficult to use, inconsistent, glitchy, and with a terrible user interface.
From the Zoom experience, we know that the future of insurance is that we will likely see a communications option that will make Zoom look old and clunky in five or six years. If you have the right equipment, we could be sitting across a virtual desk from each other in the future.
This communication environment would be even better because it's not a two-dimensional communication experience; it's three-dimensional. Currently, this equipment is expensive. But, in five or six years, it won't be.
And, within a decade, I bet you won't even have to wear a headset. You'll be wearing specialty eyeglasses. With any luck, this will be wireless. I know my problem is that I tend to walk away from my desk. So, I’d most likely pull everything off my desk!
This type of technology already provides a digital revolution by changing practically every aspect of a business. With this type of technology now (and in the future), you can work with people no matter where they are. That brings me to my next couple of points. Let’s start with the first one.
Fully Virtual Agencies Using Digital Technology
First, let me say that there’s absolutely nothing wrong with running a brick-and-mortar agency. However, digital technology allows you to save on formerly required agency expenses. There are other benefits to a virtual agency as well.
For example, you could find a fully qualified assistant in one town who is willing to accept less pay and is as efficient as someone in your city. However, to find, meet, hire, and manage that person, you need technology. You need core processes and systems in place to drive productivity and results because you certainly can’t manage remote workers by attendance. Because let’s face it, how would you manage that remotely? What are the techniques and tools you would use?
And, by the way, maybe you could pay someone $75,000 a year in the metro area in person, and they’ll be effective and efficient. Then, you have another candidate that could pay $45,000 a year in a smaller town, and they work remotely. They’re just as efficient and effective. Which would be better for your bottom line?
What could you do with that money that you save? Maybe you could invest it in marketing. That brings me to my next point.
Geography Is Dead Thanks to Digital Technology
Before digital technology, we agents were mainly relegated to the areas we serve. Now, we still are in one sense due to where we are licensed. So, as I talk about this concept, always keep your licensing in mind. Also, remember that nothing stops you from deciding to up your licensing game, either.
Before we had all of these trends in insurance technology that enabled us to meet and talk with people all over the nation, we had to meet our customers and prospects in person or talk to them on the phone. We had to take payments in person, wait for checks in the mail, or even run credit cards over the phone. And let’s not forget taking cash and making change. Unless part of your growth strategy back then included traveling or opening other agencies, growth was limited to our general area.
Digital transformation has changed that. You can now be a digital-first insurer in Oklahoma who markets in Washington state and writes insurance policies there. Long live digital technology in the insurance sector. Talk about an affordable way to grow your agency!
And, again, you can recruit from anywhere. You can stay right here in Oklahoma City (or wherever you are) while looking for the right people who want to work for you from across the nation. It’s going to continue to be this way.
It just makes better financial sense for the future of insurance.
Most people who want to become a digital-first insurer ask the fundamental question: How do I manage my agency using technology? So, that’s the next topic we need to talk about because that’s a core process now and will continue to be very important as a digital strategy in the future.
Agency Management System: Your Core System
An agency management system is a software as a service digital insurance solution for agencies that helps you make better use of your book of business and run a better agency. You can be more efficient, more effective, and get a lot of data from it that can impact your decisions about customer service and marketing, among other things.
The choice of an agency management system is a huge and profound decision. However, despite the expense, this isn’t just a decision you make every decade or two. The truth is that the world we live in today is much faster moving than that. And agencies need to look at technology not as a one-time investment, like a building, but as an ongoing investment.
The wrong way to think about it is to say to yourself, "Hey, I'm buying this system that will last 15 years." No, it's, "I'm buying this thing, and it may be outmoded in 24 to 36 months, so how do I make it profitable for me in that time so when I’m ready to transition to a new system in 36 months I won’t have lost money?”
An agency management system is a financial investment and when it is made correctly, it can pay you back in remarkable ways. Think about how you can make the system profitable for you as you look at the features and the type of data it can give you. Ask yourself the following.
- What does it do in terms of claims processing?
- Can it communicate directly with the insurance carriers you use?
- What data can it give you related to insurance policies and customer service?
- How can you use it for cross-selling? Does it give you specific cross-selling opportunities?
Some agency management systems give you that information directly. And as time goes on, the tools and data for each will just get better and better.
The Future of Digital Trends in the Insurance Industry: Artificial Intelligence & Machine Learning
The future of digital trends in the insurance industry also includes more artificial intelligence and machine learning. While the two are similar, they are not the same.
An example of using artificial intelligence in the insurance sector is using a chatbot on your website that can answer basic questions about how claims processing occurs or provides customer service information. Another example is processing a free quote. It requires input from a human to give specific output. The data is entirely reliant on what is first provided.
Machine learning is a form of artificial intelligence, but it works differently. A person can provide data, and the AI provides output. Over time, the AI learns so that it can provide better output. How much the AI can learn depends on how it was programmed in the first place. It’s a very sophisticated digital tool that will become an insurtech trend for digital-first insurers looking to impact the younger crowd and for agents looking to do away with repetitive tasks.
Digital Strategy Is Yours for the Taking
Trends in insurance technology will continue to come and go because that’s just how technology works. Things change. Yet, your digital strategy is just that: yours. Yes, there could be better digital applicants and tools that you can use for customer service and satisfaction as time goes on, but you can get started now. You know at least a little something about technology because you made it to my site to read this blog.
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Always keen on helping others make their dreams come true, Tony and his team have helped independent agents grow into more than 250 independent agencies. This has made OAA the number one ranked Strategic Master Agency of SIAA for the last 5 years, and one of Oklahoma's 25 Best Companies to Work for.
Tony loves to share his knowledge, insight and wisdom through his bestselling books as well as in free mediums including podcasts and blogs.
Tony and his family are members of Crossings Community Church, and he is very active in community initiatives: he’s chairman of It’s My Community Initiative, Inc., a nonprofit working with disadvantaged people in Oklahoma City; and chairman of the Oklahoma Board of Juvenile Affairs., and he has served through many other organizations including the Salvation Army, Last Frontier Council of the Boy Scouts of America, and the Rotary Club.
In his spare time, Tony enjoys time with his family. He’s also an active outdoorsman and instrument-rated commercial pilot.