Insurance Agents Have Come to Embrace Insurtech. When Will Carriers?

There used to be a time when independent insurance agents were wary of what disruption insurtech might bring.

They feared a future where all insurance transactions were done digitally — eliminating the need for the familiar agent that had become synonymous with expertise and service in the industry.

But for all of the worry and speculation about what insurtech companies were making possible, total disruption never came, and in fact, independent insurance agents and brokers are finding themselves wanting to see more change by leveraging technology themselves.

A future where all insurance purchases happen online simply hasn’t come, and likely never will. The profile of an online buyer is different from the profile of a risk manager at a medium-sized manufacturer. All small business owners are different and that is a good thing because they can always find their outlet whether with a direct writer, online (with an e-agent or direct to carriers) or with an independent agent or broker.

Insurtech has simply found its proper place in the distribution landscape albeit with a more efficient model for risk placement.

Agents have long searched for ways to do small business more effectively — specifically, gathering more quotes from more carriers and in less time. The hope is time not spent in the weeds gathering quotes can be spent selling more products and policies along with the personal touches that agents strive to provide. Ironically many insurtech firms that independent agents once feared are actually developing solutions to make this a reality.

However, in order for this progress to happen, insurance carriers need to explore and eventually embrace the progress being made by insurtech firms, who are looking to improve, not disrupt or infringe, upon the traditional carrier business model.

The real future of insurance is carriers partnering with insurtechs to enable better speed and choice within agencies. There seems to be progress. Most major national insurance companies have invested in innovation hubs while others have announced partnerships with smaller startups.

Insurance carriers have been doing some excellent work tapping the incredible amount of historic data found in their books of business and combining that rich information with third-party data to improve the speed and quality of the quoting process.

In many cases, some have been able to refine that data so well that an address and basic business information is all it takes to generate a quote, streamlining underwriting process. This internal digital advancement is a welcome sign for insurtechs — if the carriers are able to generate quotes quicker and more effectively, these quotes can be integrated into insurtech solutions agents and brokers use. At the end of the day, it empowers something nearly everyone in the insurance sphere has been demanding for decades — choice.

Insurtechs as disruptors is a fear that was never realized. Instead, insurtechs have proven to be willing partners and providers of valuable solutions for carriers. If the demand for faster, more accurate policy quotes from agents is to be realized, carriers must also be willing to partner, invest and integrate their data into insurtech platforms. If this happens, insurtechs will be seen in the industry for what they truly are — enablers of better business.

Kroeger is executive vice president of strategy and business development at Insureon.