2022 Holds Promise for Insurance Agents and Digital Carriers

Technology will continue to influence changes in insurance markets in 2022, especially among agents and digital carriers.

So say the people at Agentero, a digital platform and network that uses data and analytics to enable agents to proactively offer insurance choices to customers.

Agentero’s founder and CEO Luis Pino was the first employee at CoverWallet and has also worked for McKinsey & Co.

“Insurance markets are changing. For years, the discussion about technology adoption has been focused internally on improving manual processes. While that’s still important, we’re seeing so much more.

Technology is a key factor in agents’ growth strategies, including how they uncover new opportunities, expand into new markets, and interact effectively with carriers,” said Pino.

Analyzing data on its platform and research from others, Pino and his team identified four key trends for 2022:

1. Digital carriers become household names. Digital carriers are growing in brand recognition. Consumers are increasingly more comfortable buying policies from new carriers, and agents are more open to offering their products. According to S&P Global, year-over-year growth for Lemonade and Hippo was the highest in the industry for companies with at least $50 million in quarterly premiums, for example. New technologies are enabling digital insurers to get their products in front of large numbers of agents quickly, giving agents easy and fast access to newer product offerings. For many, the convenience factor and speed-to-market are opening doors to working with new carriers.

2. Big gains in supplementary products. Data analytics is helping agents uncover opportunities in their customer bases, such as car owners who rent, homeowners with pets, and small businesses that lack cyber protection. It’s an important opportunity as many of these categories are growing rapidly. For example, many people are trading homeownership for renting, and they’re shopping for new insurance, according to JD Power. While in the past, selling supplemental policies manually often took too much time, technology is enabling agents to sell lower revenue products in higher volumes.

3. Fewer barriers for start-up agencies. The barriers to starting an agency are lower than ever. The pandemic has also created virtual opportunities in which agencies are not bound by location and can operate in states where they know the customers have an appetite for certain types of insurance. Technology also makes carrier appointments easier, enabling agents to begin working with new carriers quickly and easily.

4. The independent agent model advances. For years, many people have talked about the end of the agent model. That discussion should finally end as we see record growth among independent agents in 2022. Expect the independent agent channel to continue to become stronger as more carriers — including digital carriers that were founded on direct-to-consumer models — realize the benefit of agent distribution. In addition, more legacy carriers with captive agents in the past will follow the path of Nationwide and Liberty Mutual, enabling agents to sell coverage from additional insurers. According to Foundation Capital, there has been a 32% decline in captive agents as captive agents and carriers are becoming more independent.