Tech Talk: Digital Dinosaurs and Insurance Competency

I have had agents tell me they have lost clients because of their “digital deficiencies,” which can include outdated websites and email systems and the lack of mobile capabilities.

The exact mix of factors vary, however they all boil down to one result: these agents pushed clients into the arms of competitors with sporadic contact and by making themselves less accessible online. In a more ominous development, we have also heard of instances in which some clients are questioning the insurance competence of agents with these digital deficiencies.

The premise is logical. Competitive pressures are pushing most businesses to go digital with better internal systems and websites, social media outreach and heavier reliance on smartphone technology. These businesses use digital tools because they save time and money. They expect the businesses they patronize to use the same tools for the same reasons.

Cyber risks, including malware, viruses, data and identity theft, and breaches via personal smartphone access pose a growing threat.

In this column, we have covered how agencies can address these cyber threats for their own operations. Many agents, however, are still unprepared for many of these threats and present a decidedly outdated digital presence. Yet more of their clients look to them for help in understanding digital risks and insuring them. As a consequence, if an agent does not “practice what they preach,” some clients are questioning the value of their insurance counsel. It may not be fair, however perception, as the saying goes, is reality.

One cyber coverage expert challenged the premise saying it is “highly flawed” and that an agent does not need to be digital savvy to talk about cyber risk in a knowledgeable way. That may be true for some insurance buyers, but for others, the digitally deficient agent is a red flag.

Insurance technology expert Steve Anderson disagrees that the premise is flawed.

“Agencies which use outdated digital tools, or none at all, are certainly at risk of not being able to attract the digital consumer,” he said. “There is a growing expectation that businesses will be available digitally. If an agency can’t use simple digital communication tools, are they going to be able to protect private and secure information? I do think this is a question that impacts a company’s decision on who they want to do business with.”

Anderson said some consumers might be a bit more forgiving of agencies that are not on the “cutting edge.” He added, however, that the larger a business is the more likely they are to expect a higher level of digital competency in vendors and suppliers, including the professionals they deal with.

Agent Chris Paradiso agreed.

“We have to stay focused on what’s right for the client, not just what’s right for us as agents. I don’t want customers, I want clients,” he said.

Paradiso said the fact that so many agents still don’t have a mobile app defies logic. He said larger clients are more likely to notice whether or not their agents are digitally up-to-date.

He also cautioned that the situation is changing, and more and more businesses and individual consumers will expect digital competence from their agents. We could find no formal studies on this issue, however we hope some are initiated, and soon.