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Independents, Data, Analytics, and the Future

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What do you get when you mix the principal of an independent agency in Michigan with the principal of an independent brokerage in Ontario, and add a few questions on data, analytics, and the future of independent distribution in North America?  Answer:  A fascinating 90 minutes reaffirming the resilience of the independent system.

We’d like you to help expand the conversation.

The value of data and analytics for the independent distributor

As part of the Insurance-Canada.ca sponsored Insurance 2023 Project, the team is holding periodic conference calls addressing specific trends.  At one such call, team members Chris Hill, a partner in Erb & Erb in Kitchener, Ontario, CANADA, and Brian Bartosh,  principal at Top O’ Michigan Insurance in Alpena, Michigan, USA addressed the question:  How will expanded use of data and analytics impact the independent distributor.

The outcome of the discussion was published recently, but here are some highlights:

  • Carriers in both the US and Canada are getting more aggressive in using analytics to improve their business.  Some of the initiatives integrate brokers/agents in the design, but others could limit, or exclude, the independents from the mix (Telematics was mentioned specifically).
  • The independent agency plant in the US is actually growing, after a period of decline and stagnation, according to a recent study.  Many of the new agents entering the system have been trained in formal insurance and risk management courses and are much more aware of targeted marketing supported by data.  (We commented on other factors from this study in a recent post.)
  • Established agents in the US are pressing the agency management system vendors to incorporate data and analytics into base offerings and are using third party applications to fill in missing areas.
  • Canada is not seeing as much of this activity, but a small group of agents are  making buying decisions based on the capability of broker management systems to segment and monitor business activity.

About independents and the future

On the business side, both Hill and Bartosh are concerned about the future of the mid-sized independent distributor, but both have made the commitment to succeed and are adopting strategies to succeed.

One key element is focusing on professional management in the agency/brokerage.  Both participants felt strongly that the principals should not carry their own accounts.  Their job is to run the business for the future, which includes clear training, development, and succession plans.

What do you think?

This discussion gave us lots of food for thought. The primary takeaway for observers to this discussion was the great quantity of optimism and energy that these two distributors bring to the table. And the use of sophisticated management tools is part and parcel of their toolkits.

So, here are our questions to you:  How important are data and analytics for independent distributors.  Will they support the independent or be a part of their demise?  Are you optimistic, pessimistic, or neutral about the future of the independent system?  What are the differences you see between US and Canadian independents?

Share your opinions below.

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