A digital transformation has swept the insurance industry. The pandemic has forced the insurance industry to adapt through the use of online technology and digital systems. Insurtech has expanded the capabilities of the industry and paved the way for more accessible and personalized solutions. Similarly, general agencies and their agents can save time and money, improve efficiency, and connect with clients by incorporating digital solutions into their practice.
While insurtech provides insurance carriers and advisors with the means to work more efficiently, there is also a downside. The increased competition of insurtech poses a threat to insurance advisors. Insurance technology disruption has prompted many insurance companies to sell directly to the consumer without advisors.
If you are an insurance or financial advisor, here’s what this means for you.
Advisors Still Matter
The direct-to-consumer model has proven to be popular with consumers who look for convenience, quality, and personalization. It has also proven to be adaptable to any situation, such as buying insurance during the pandemic. Insurance companies are capitalizing on this trend by trying to reach consumers through offering other insurance products or by creating their own insurance company. Based on research from the Wall Street Journal, many of these insurtech companies are looking to become the carriers themselves, thereby displacing advisors.
However, advisors still play a crucial role in the insurance process. Advisors are responsible for closing the last mile between the carrier and the consumer. Many consumers look to an advisor to provide guidance and navigate the buying process efficiently. Not only that, but advisors know how to develop complementary strategies that occur in an emergency. These exchanges impact the client and the clients’ beneficiaries.
The consistent contact between an advisor, their client, and their clients’ family is a crucial role that often goes unnoticed. Being an advisor is about more than just selling products – it’s about developing a lasting connection with their clients and their families. An exceptional advisor maintains a relationship with their client even after the initial sale, offering recommendations and solutions when necessary. Advisors who get to know their clients and their family know their financial situation and utilize it to pass on information to the beneficiaries and settle claims.
Using insuretch to your Advantage
Despite the posing threat to insurance advisors, insurtech presents untapped capabilities to expand an advisor’s practice. McKinsey states that “insurtechs use their digital expertise to maximize value in a number of ways characteristic of truly digital enterprises.” One of the most promising capabilities offered to advisors via insurtech is increased connectivity to the consumer. Advisors who use insurtech to connect and collaborate with their clients can develop a relationship that promotes more trust, sales, and referrals.
Another way advisors can improve their practice with insurtech is through automation. Many insurtech companies provide automated processing to increase efficiencies and manage increasing consumer expectations. Advisors can apply these capabilities to marketing efforts, underwriting procedures, and workflows.
An invaluable resource that advisors can take advantage of by partnering with insurtech is data-driven insights into their clients’ financial lives. Access to these insights sets advisors up to offer personalized products and services at just the right time. By learning more about clients and their habits, advisors can tailor their practice to the consumer’s needs. Advisors can also apply the knowledge they gain to develop better relationships with their clients.
How Advisors Can Compete
McKinsey labeled insurtech as “the threat that inspires.” Insurtech can complement advisor expertise and guidance by providing digital and robust consumer experiences that align with the expectations set in place by companies such as Amazon, Uber, and Netflix. Advisors who do not embrace the disruption of insurtech will fall behind. Advisors need to embrace insurtech, but research to find a partner or service that will allow them to compete in the market.
One insurtech solution that works to accomplish this is Link by LegacyShield, a secure communication platform where advisors can conduct business with clients and collaborate on documents and policies. Link offers increased connectivity through instant messaging and file sharing, marketing and workflow automation, and next-generation insights into their clients and their entire network. To learn more about Link, download this brochure.