Agents, Brokers, and Carriers: COVID-19 as an Accelerator of the Pivot to Digital for Life Insurance
Blog: Capgemini CTO Blog
Life insurance companies have been working to improve their speed to market for new and refreshed products, but they have struggled to effectively message these improvements to frontline agents and brokers. Even as more customers shop online, the value of the agent and broker model still exists for many customers and prospects. Thanks to the lengthy and very highly publicized COVID-19 pandemic, the life, annuities, and even group benefits businesses have seen significant growth in interest for life insurance products, supplemental health products, and income protection products, despite the economic downturn. Many companies that previously struggled with other initiatives/priorities to push digital initiatives for agents/brokers are now seeing an urgent need to enable their agents for current – and future – opportunities via a digital channel. While some of these efforts include direct digital channels, most life/annuity/health products require significant education (and compliance) components which will take time (and innovation) to address digitally (unlike personal lines P&C products such as auto insurance). As a result, digitally enabling the agent is the fastest path to adapting to the current environment.
Customers are—at least for now—more inclined to work with brokers/agents, typically local and (eventually) in-person. For the large majority of carriers that rely at least in part on agents/brokers, the relationship is vital to their marketing, sales, servicing, and retention, and their current business models rely on it. Unless and until these carriers fundamentally change their business models and/or business processes, they need to work with agents/brokers to enable them to sell and service customers in what is—during a pandemic—a digital-only world. Various themes are flourishing with regard to digital enablement, and the objectives have never been clearer. Through a digitally enabled front office, agents and brokers can focus on high-priority tasks without wasting energy on the “low value-add transactions,” as Seth Rachlin, Executive Vice President and Global Insurance Lead at Capgemini indicates (“How Insurance Brokers are Augmenting Their Value Proposition,” Bethan Moorcraft, Insurance Business America, October 2020). Agents are augmenting their value proposition and building better connections with the customer with these tools but can only do so when a carrier supports it.
Using digital tools, carriers will also want to ensure that each interaction with the customer—whether that interaction is via the agent or direct (e.g., via self-service tools from the carrier)—is insightful and can go beyond traditional communication. Across the value chain, there is an opportunity for meaningful interactions, but there are also what many call “choke-points.” “Meaningful” interactions are those vital discussion points that can engage the customer and collect relevant information in which the customer shares critical information for an agent or carrier to understand their needs. Carriers must define opportunities to create “meaningful dialogue,” whether it is to distinguish their own product or provide insightful information on coverages (or exclusions). By looking at each point in the value chain, companies can create meaningful interactions without continuous follow-ups.
Building a bridge across distribution channels will become crucial as independent brokerages (agencies) have divergent expectations from captive agents and will require alignment as carriers establish new direct channels with the customer. Carriers will need to develop solutions that can span the entire insurance value chain, from product development through claims. Building workflows for the carrier/brokerage, having straight through processing where possible and intelligent automation where it’s not, streamlining document processing, and aligning a data management strategy between carriers and distribution partners will all be critical aspects of “digitalizing” the carrier/agent/customer relationship.
Digital is only part of the solution, though. Digital sales and service must be enabled by “digital-ready” products that are simpler, easier to educate the customer about, and easier to buy (e.g., no fluid samples). The evolution of life products has already started, and the push from both COVID and demographic changes (entire generations that prefer digital to human interactions) has pushed the market to make those changes even faster. Digital tools, digital products, and the replacement of legacy processes and systems will be needed to optimize how carriers interact with both with the agent and the customer as preferences shift (whether due to pandemics or simply generational shifts).
In the upcoming weeks, we will share a series of posts that include:
- Building connections
- Insightful interactions
- Digital themes for insightful carrier-broker interactions
- The future of agent/carrier connectivity