- Where Insurance & Technology Meet

The Curse to an Independent Broker May Be The Cure

We have noticed a spate of surveys and commentary on the decline of the independent agent/broker system.   But people who know brokers suggests that the good ones are very  resilient and have a history of turning adversity to strength.  And, in these times, technology plays a critical role.

We recently posted on research by the US Independent Insurance Agents and Brokers Association which suggested that between a quarter and  a third of consumers believe that it is easier, faster, and cheaper to purchase insurance over the Internet or through a toll free number than through an independent.  A Candian survey sponsored by TD Insurance , and reported in Canadian Underwriter, found that “when it comes to making significant decisions regarding insurance products and services, 63% of Canadians don’t go to an insurance provider, but instead ask their friends, family or colleagues for advice (25%), rely on searching the Internet (33%), or simply go with their gut.”

So what can independents do, besides wait to die?  Well, Steve Doucette, founder and lead executive of the Great Northwest Insurance Company, penned an article in PropertyCasualty360 which places the responsibility  for the challenges with the independents themselves:First, agents no longer provide customer service, companies do. This has led to the devaluation of the agency. Second, the ability to brand the agency name has disappeared because agency service has disappeared. Third, agents have allowed the Internet to be claimed by the direct-to-consumer companies.”

Doucette then examines each of these challenges and offers the agents a prescription for turning them into advantages by doing what they do best:  “First, agents must reclaim customer service. Second, they must build on their customer service to brand their agency and focus again on practical techniques for agency branding.  Third, agents must develop interactive Websites capable of providing all elements of interactive service such that all sales and service emanates through and culminates at the agency Website.”

But the agents need support from carriers as well for this to work.  Doucette’s advice is for carriers to focus on what they do best:   “First, they (carriers) must re-engineer themselves for low overhead. Second, they must recognize the strength of the Agency system is service, and that customer service done locally is superior. Third, they must build the technology to move all customer service back to the agency level, by providing technology that works through, and not around, the agency interactive Website. The company portal must become the agency portal.”

All of this has been said before, but the challenges have never been as great for agents.  And, we believe, social media tools are provide unique leverage points.

It could be very interesting.