Get connected

Insurance is a business that is grounded in connections — with clients and with technology. To transact business successfully, independent agents need to develop relationships with their customers and create client loyalty. And equally important, agents need to be intimate with today’s technology. Falling short on either type of relationship could lead to failure.

Just look at the effect the Web has had on automobile insurance as an example. According to comScore Inc., which tracks activity in the digital world:

• Auto insurance policies purchased online increased 58 percent from 2005 to 2006.
• Consumers submitted more than 70 million online rate quotes from 2004 to 2006, and noted that the Internet was critical to their research.
• The total number of auto insurance quotes they submitted online increased 15 percent between 2005 and 2006.
• And in just in January and February of this year, the number of auto insurance quotes submitted online increased 29 percent, plus the number of policies purchased online increased 45 percent, from the figures posted during the same period in 2006.

The statistics tell a simple story that resonates with nearly every generation from X, Y, Z and down that uses technology as part of its daily activities. From sending out party invitations to making dinner reservations to watching sports, everything is done with the latest and greatest gadget. And while you may believe we’re years away before these “young’ uns” start to make insurance buying decisions, you’re wrong.

At a recent dot-com event, the leaders of multi-million dollar companies networked while simultaneously texting away on their “crackberrries.” Many had what they dubbed private “offline” conversations with each other, no doubt about their latest idea for a stealth software or Internet-based company. Many of the executives also represented well-established companies such as PayPal, Facebook and Google, that have more than a quarter of a million customers and millions of dollars in backing. And perhaps even more impressive, many of the managers — the ones making buying and leadership decisions for the companies they founded — were under the age of 30.

A few months ago, when Seattle-based Safeco Insurance announced it would be selling insurance online, independent agents feared for their livelihoods. CEO Paula Roseput Reynolds quickly tried to reassure agents that she was not moving her company to a new sales model. Instead, she said she was hoping to “give confidence to consumers,” providing those who wanted to shop online a method of doing so.

Reynolds wisely recognized that to stay in the game, her company had to join the digital world. Companies that only sell online may not be profiting yet, she recognized. But with 40 percent of people shopping and doing research online, to remain connected with customers, the insurance industry needs to embrace technology, she said.

Reynolds admitted she sometimes thinks of Safeco as “just a technology company with insurance as a reason to be.”

“This is a technology arms race where some will win and some will lose,” she added.

So as you form connections with the business leaders in your community, ask yourself whether your company is failing to maintain its client connections because it isn’t plugged into technology. If you are, it’s not too late to reassess where you perceive the future of your agency to be.