- Where Insurance & Technology Meet

What Do Agents & Brokers Do Anyway?

“What do agents/brokers actually do for a living?”  Over the last quarter century or so,  we have periodically asked insurance consumers and insurance carrier IT workers that question. We tend to get two very different answers, both of which are wrong.  Worse, we find the answers from the IT employees to be further from the truth than the consumers.  How does this impact technology that carriers deliver to brokers?

Some Perceptions and …

We’ve never done our poll scientifically, but the consistency of the responses over 25 years suggests that our conclusions close to reality.   The most frequent response from  carrier IT employees is: “They sell insurance.”

Insurance consumers, however, have a different take.  The vast majority of consumers say, “I don’t really know, but when I call them, they try to be helpful and my bill is usually right.”

… And Some Reality

While we don’t have deep knowledge of broker workflows, we do know something about transaction volumes.  A number of studies over the years have found a consistent distribution of work.  For the ‘typical’ personal lines broker, 10%-15% of transactions involve new business.  Another 40% of the transactions involve renewals.  The balance involve policy service, endorsements, billing inquiry, claims reporting,etc.

The customer service transactions are important to the customers, and to the insurers, but don’t typically drive any new revenue.  They do form the basis of long-term relationships with clients.

Successful brokers understand the importance of this. A recent blog post entitled  ‘Why Insurance Agents Fail’, blogger and insurance agent coach Brent Kelly, writes: “ If you are in the insurance business simply to make money, you will not succeed. Maybe in the short-term, but over time prospects and customers will see right through you. The will know you don’t care about them, you only care about you. …This is a people business. This is a relationship business. This is a service business.”

What Does This Have to do with Technology?

All very interesting, you might say, but why is this in an Insurance-Technology blog?  Many of these IT folks believe that broker technology must support driving new business.  On that basis, the natural tendency is to deploy technology that focuses on selling.  And when these employees get promoted to management positions, they direct development of applications focused on selling their companies products.

In other words, they spend most of the time on technology that impacts 10%-15% of the broekrs’ challenges.

When we have had the chance, we have sent these folks out to spend some time in a broker’s office and get them talking not just to the sales people, but to the operations folks and CSRs.  They typically come back with a better appreciation.

So, What Do You Think?

If you are a broker, do you think that our analysis rings true?  If you are work for an insurance carrier (especially if you ate in IT, do you feel you know about the broker’s job?  If not, does this screed help at all?

Leave us a note below.