Insurance Carrier Journey: Why they are Going Direct and What it Means for the Insurance Agents?
Insurance carrier journeys are changing the way they work in the insurance industry. The improvement in technology in the insurance business has led to the development of new opportunities for the insurance carrier journey. A large number of insurance carriers have started to ignore the traditional insurance model. They are serving direct to the customers.
The direct-to-consumer strategy gives the insurance carrier journey the advantage of reaching new customers, addressing the needs of digital consumers, and adding another channel to generate sales. Adding on to this, some of the other reasons behind insurance carrier going direct without using insurance agents are as follows:
Cut down insurance agents
The first reason why an insurance company might be interested to serve customers directly is the reduced cost by cutting down the middlemen. Insurance carriers no longer need to hire insurance agents to do the selling of their insurance policy.
Meet the needs of the customers
By using direct to customer method, the insurance companies work more closely with the customers. They can gain more information on the kinds of policies they can sell to the customers. This provides them with an opportunity to cross-sell insurance policies. Insurance carriers can introduce bundles after they understand the needs of the customers.
Offer insurance policies at a cheaper rate for the customers.
When the insurance companies serve directly to the customers, they can cut down the cost of hiring an insurance agent. This reduced operating cost of insurance carrier journey would be reflected in the price of insurance policies they provide to the customers.
What does this mean for insurance agents?
Insurance carrier journey with technology to serve direct to the customers seems to replace the insurance agents. But does the technology replace insurance agents? Insurance agencies can cope up with technological disruption and the use of direct to customer method by insurance carriers by shifting their focus to an area that cannot be touched by tech. Agents must focus on the advisory role and let technology handle tedious and data entry insurance tasks.
Clients would require a personal touch from the insurance agents. They would require guidance on compliance rules and insurance implementations. Clients would need advice from agents on how to make insurance a part of their financial picture. Insurance agencies can become consultants rather than salespeople who add value to their clients.
Technology is the future of insurance. Like fintech in banks, technology in insurance is more likely to become dominant in the coming years. You, as an insurance agent, need to learn how to incorporate technology into your business to thrive in the new environment. You can also use technology to enhance your relationship with the insurance companies. Both insurance agents and insurance carriers list their relationship with each other as one of the top three drivers of their success. Therefore, you need to focus on using technology in your favor and improving the relationship with your insurance carrier journey.
