Change happens gradually and then all at once.
The sentiment is certainly true of the insurance industry. The slow progression toward digital transformation became critical overnight with the COVID pandemic. Everyone in our industry has had to shift how they work or interact with customers in some way.
This year has been all about response and survival, but it’s time to look forward. Digital transformation is no longer a trend – it is the trend. This push toward digitization is leading to several emerging developments as a result.
Here are the top trends that insurance agents should pay attention to so that you can continue gearing your practice for success in a rapidly changing industry.
Insurers are mandating digitization
For major insurers, providing digital pathways for insurance has quickly shifted from a want to a need. Paper applications, long the industry standard, will no longer be accepted by many carriers. Instead, they’re putting major investments into new pathways for efficiently transferring data as well as technology like human API to obtain client information and health records.
It’s critical that agents adjust their practices to meet the new speed of business set by the insurers. You must be able to execute business faster and speed up processes. That will almost certainly involve adopting new technologies and workflows. According to Marc Schwartz, Principal at Windsor Insurance, this may also mean only focusing on a few carriers and learning their platforms really well. (Read more from our Q&A with Schwartz on insurance technology here.)
Whatever the case, digital pathways for insurance are no longer an option or a perk to offer clients. The digital space is becoming the new hub of insurance business – where client communication, information sharing, and policy delivery will all take place.
Customer personalization growing in popularity
Digital leaders in other industries have raised the expectations of insurance customers, who now expect a personalized and flexible customer journey. Omnichannel interactions will be the norm moving forward with consumers using a variety of online and offline channels before buying an insurance policy.
The good news is that personalization provides many opportunities to increase sales and improve brand loyalty. In fact, a McKinsey study found engaging with potential life insurance customers through multichannel, personalized customer interactions has the ability to reduce customer acquisition costs by up to 50% and reduce customer churn by up to 30%.
There are several reasons why. One, omnichannel interactions provide more opportunities for agents to proactively reach out to potential clients likely to lapse. Fewer customers get lost in the sales cycle with multi-channel outreach.
Another major reason is that the life insurance sales cycle is being redesigned. Instead of a one-time purchase that is very occasionally reviewed or renewed, life insurance underwriting is being considered more a continuous process.
Using data-driven digital tools, agents can be more connected with their clients and continue adjusting policies over time to meet clients’ changing needs. For example, with an advisor-rich insurtech platform like Link by LegacyShield, advisors and clients can continuously communicate. As they collaborate in the platform, advisors gain advanced insights into clients’ important life details. They also receive notifications when clients view a file or make changes so that they can reach out to clients at the right time. The result is more sales for the advisor and better, more personalized coverage for clients.
Regulatory challenges require flexible solutions
While digitization provides a number of benefits, like automating manual, repetitive activities and providing a superior customer experience, it does pose new challenges. Most notably, data privacy and regulatory compliance are major concerns for the industry.
Insurers have already been the targets of some of the biggest data breaches, and 52% of insurers expect to boost spending on data privacy in 2021. State and national legislators are introducing and passing new insurance data security laws designed to better protect clients’ information.
Keeping up with all the changing regulations is a job in itself – and not one that insurance agents can afford to do. Again, this is where the value of an advisor-centric platform comes into play. When you use an insurtech platform designed to protect data security and meet all insurance regulations, you can spend less time making sure you’re following regulatory compliance, and more time communicating with clients and digitally sharing the information and policies they need.
Change may be happening quickly right now in the insurance industry, but that also makes it an exciting time. Agents who remain flexible and open to new opportunities will be at the helm of positive change for their clients and their business.
For more information on how to successfully navigate the new insurance landscape, check out our blog, “Insurance Agents: Move Into Change or Be Left Behind.”