Even Popeye needs some help from spinach. In this post, I look at the importance of the Insurance agent and some Insurtech startups providing tech spinach to the Popeye agent.
I started out my career in this industry as a financial advisor. Being a financial advisor was always my fallback plan if my entrepreneurial ventures did not work out (which, in my late teens/ early twenties, they didn’t).
My father has been a financial advisor since I was about two years old. I have always been around the business, from interning for him, meeting various clients of his and even getting to attend some top producer trips.
Maybe I am biased about how I see the future of the agent. For the purpose of this article, I will refer to ‘agent’ as an agent, financial advisor, broker or any other intermediary selling insurance via face to face means.
Winnie the Pooh needs to weigh in
As the headline indicates, I feel Insurtech is going to make the agent stronger, rather than displace them. Two weeks ago, I attended the Broker Age event hosted Plug and Play. This event was focused on digital solutions that can help to strengthen the broker and agent proposition.
The event started with what has been one of the most enjoyable panels for me to watch since I have been attending the conference circuit.
A few weeks ago, I decided to write about this topic and began to start a ‘debate’ on topic, using the Winnie the Pooh analogy I used a few weeks ago.
Watching this panel was like watching the debate that I had drawn out in my head for this weeks’ post, and gave me some more sound bites to include.
The panel included Jason Storah, Executive VP of Aviva Canada, Chip Bacciocco, CEO of TrustedChoice.com, Kim Opheim, President of Opheim Consulting, Aaron Schiff, Founder & CEO of Matic Insurance. The panel was moderated by Richard Cagney, Managing Director of KBW. Needless to say, it was a diverse panel with varying views, which led to a exuberant discussion.
None of the panelists fully fit into the Tigger, Eeyore or Pooh buckets, as, at times, they each shared views that could be categorized into different ones. As such, I have relabeled these three characters below accordingly.
- Tigger is the excitable cat, full of enthusiasm for every new technology which will surely change the world for the better and do it right now. Tigger is a Direct to Consumer digital Insurance carrier.
- Eeyore is the old grey donkey who thinks it is all rubbish, that all this change will only end badly or won’t happen at all. Eeyore is an Insurance carrier with an established agency force and no Direct to Consumer capabilities.
- Winnie The Pooh is a humble “bear of little brain” who somehow gets to the right answer by asking good questions. We all want to be that insightful bear, but in the tech world the market is the only judge of what works or does not work. Winnie the Pooh is the same. He is someone who is looking at both and trying to question – what is the right thing for the industry and customer?
A quick personal story
My first role overseas was working on a project team where we set up an Insurance carrier in Poland. My role was to set up the Target Operating Model of the agency force for our Polish business, which included everything from recruitment of agents to the sales process with customers.
I was concerned/nervous, because up until that time, I had only been a financial advisor and wholesaler and was not sure if I could deliver. I had the following conversation with my former boss a few weeks after joining the project (he was running the project and is a qualified actuary by trade):
Me: ‘I know nothing about back office operations, actuarial/product pricing, how to set up a branch. How am I supposed to define the requirements of what the Agents need when I have never actually worked in these areas?
Boss (with a smile): ‘You have quoted and sold policies to customers, right? You’ve spoken to them about how the underwriting works and then worked with operations people to make sure the policy issued correctly, correct? You’ve walked a customer through a policy document, helped them with a claim, dealt with multiple servicing issues and back office people on their behalf, right?’.
Boss: ‘Then you know a lot more than most of the people that you are going to be working with on this project…as a lot of them have only seen one area of the business, whereas sales people have to interact with all areas of the business. I will always say, the sales person is one of the smartest people in the whole company and typically will make more money than most of the CEO’s too!’
In our next meeting, in which every workstream lead was present (product, operations, actuarial, etc), my boss stood up in front of everyone and said ‘this business will only succeed if the agent is successful. The agent is the heart of this business and will drive our growth. As such, we need to put all of our efforts in place to support the agent in our business model, which also means giving Stephen the support he needs to be able to build the best operating model he can for our success in Poland.’
(Thanks ML for giving me the confidence those days. FJ, you too.)
Some start-ups enabling rather than replacing the agent
There were many start-ups that presented at the Plug & Play Broker Age event. As the event was more focused on brokers, some of these solutions were specifically for the small business and commercial space. I mention a few of these start-ups below, which primarily focus on enabling the agent/broker.
Wellthie – Wellthie, is an Insurance marketplace and sales optimization platform for brokers and carriers to help with the end to end sales process of Insurance to small businesses. The platform offers live quoting from top medical and ancillary carriers nationwide, contribution modeling, customized proposals, an integrated CRM and more.
Hello ZUM -Hello ZUM is a start-up out of Latin America that aims to ‘Organize the World’s Insurance Information in One Click’. The management team of Hello ZUM is made up of veteran Insurance industry professionals. Their solution is a SaaS platform that was born out of looking at 2 areas; 1) the different roles in the Insurance industry and how they will evolve in a new digital environment and 2) how they interact with each other and exchange information. Hello ZUM helps to provide all the different stakeholders within the insurance ecosystem with consistent information, which helps make operations and distributors more efficient and ultimately provide a better customer experience, while generating significant cost reduction.
Client Desk – Client Desk is a Canada based software start-up focused on giving tools to brokers and carriers, focusing on engagement, self servicing and claims management. They provide a white-labeled policyholder web portal and mobile app, as well as a management dashboard used internally by brokers and agents.
HazardHub – HazardHub has two goals – ‘(1) to create the best geographic hazard data available and (2) make it free for every person in the United States to see the risks around their property’. This can help individuals and their brokers to identify the specific risks that may be around their property. You can try it for free here and sign up for the API here, which will give you up to 10 enquiries a day for free! For carriers and brokers that want to incorporate HazardHub data into their quoting and rating routines, HazardHub offers a novel pay on the bind approach to pricing.
acuteIQ – acuteIQ is an AI platform that helps brokers and agents with customer acquisition and prospecting by searching a database of 21 million small/medium sized businesses.
A few weeks ago, I wrote about my experience of buying health Insurance this year. After doing all my research online (as outlined in my article), I also spent time talking to two different agents.
I was amazed at the information that they shared with me that I couldn’t find online; which included information on the evolution of ACA and how it’s affected their business, their client’s experience with different carriers, as well as many other general tips on what I should be looking at for my own Insurance needs as a repatriated entrepreneur.
These conversations were my inspiration for my article this week. I was reminded about how the role of the agent is much more than only selling and servicing, but about knowing ongoing trends, regulations and being able to ask the right questions to individuals to determine what the most appropriate route is to go with the advice they want to provide.
Can AI and a chatbot provide for this? Possibly. But for people like me (and I know I’m not the only one), I prefer talking to a real-live person, who is paid for knowing all the complexities of the market and industry to guide me. As I used to say in my financial planning days to prospective clients ‘just because you can use WebMD to diagnose your problems doesn’t mean you will perform the surgery on yourself, right?’
That’s not to say that agents don’t face a risk. Some of the more simple personal and commercial lines may be able to be sold direct (though in my opinion, there will almost always need to be a live person to be a back up to answer questions for a customer who purchases online).
The more complex lines and individual circumstances, specifically when it comes to estate/legacy planning, tax sheltering and comprehensive solutions for businesses (both small and large), will need to be assisted by agents. Further, I can’t see super high net worth customers using digital only as their means for buying insurance.
Agents need to start eating their spinach. They need to invest in educating themselves as well as in digital tools which can help to enhance the customer experience. In the digital age, customer experience is going to the key differentiator. I personally use an agent because I want to have the expertise of a live person to bounce ideas off of. But, if the agent I am working with as well as the carrier they are representing both have tools to make my experience with them more engaging (and back office systems that also run smoothly), then I will a happy policyholder.
In posts here and in conversations I have daily, I keep saying that Insurtech start-ups need to have an Insurance person on their team (either as an advisor or part of their management team). I’m going to take that a step further; they need someone who has done Insurance sales. If they really want to learn the business, this is going to be the best way for them to do so.
Stephen Goldstein is an experienced Insurance executive and Insurtech dealmaker with a core focus on growing revenue, launching go to market initiatives and advising industry leaders.
Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.
Great post, Stephen! Pretty thorough with balanced arguments and articulation of personal opinions. Although I generally agree with the points you’ve made, I can resonate the most with your Winnie the Pooh perspective on “Policy Delivery & Product Explanation.” A good process/job well done in the beginning can avoid the pain that comes with misunderstanding the contract after a terrible event happens (which sucks!) and can instill trust in the agent/carrier, improving the NPS score.