A decade ago, brick-and-mortar agencies added websites and followed with digital capabilities, but now some “born-digital” insurance agencies are following the traditional model by looping in advisors, according to new research.
For digital-first insurance agencies that have solved the affordability and convenience hurdle, adding agents and post-purchase customer service is part of enhancing the life insurance buying decision, the research found.
“These producers have a digital-first mindset but recognize the value of talking to advisors as well,” wrote Novarica consultants Rob McIsaac, Ken Toffolo and Steven Kaye in an April report.
Other industry experts note that while digital agencies have lower initial cost structures, much of that advantage evaporates after factoring in advertising and marketing costs to draw a consumer to a digital agency’s website.
Advertising can cost as much as four times the commission paid to a traditional agent.
So while insurers and their networks of distributors pursue lower-cost digital models in an age of cost-cutting and low interest rates, digital agencies seem to be in search of how best to the integrate the value of the skilled agent.
In short, brick-and-mortar agencies and their digital-born cousins seem to have taken two very different directions toward a middle ground consisting of a mix of digital and agent support.
Improving Call Centers
Industry executives acknowledge that young insurance buyers have challenged the customer service expectations of an industry known for slow sales cycles, long-tail risks and time horizons measured in decades.
Millennials and Generation Xers demand speed and efficiency, but insurers and agencies ignore agent contact at their peril, particularly when many insurers still have work to do improving service once the policy has been issued, the consultants wrote.
Knowing this, some companies have launched new initiatives to improve contact through call center interactions with the help of speech analytics, voice authentication and scripts customized to segment customer personas, the report said.
Jenny Life, which markets term life to “time-starved women,” through a smartphone app, dispenses with health exams, blood tests and urine samples and offers coverage from A-rated insurers for as low as $5 a month.
Policyholders can call an 888 number for policy updates and claims.
Fabric Life Agency even tried an app but found consumers didn’t want an app just to buy insurance, the consultants wrote.
Mobile support for agencies like Jenny Life, Leap Life, Bestow and Insurmi varies, the report said.
But the lesson seems to have come across loud and clear: the agent connection is a differentiator for digital-born agencies and insurers building a digital presence.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at firstname.lastname@example.org.
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