Insurtech: It’s not Just for Carriers Anymore

Until recently, insurtech not only was perceived as a competitive threat to independent agents, there was little startup activity dedicated to tackling the operational needs of insurance agents and brokers. That’s not the case anymore, according to one industry professional who specializes in technology-related products and services for insurance firms.

“There’s this perception that insurtech is really for carriers and it’s our competition as independent agents. I want to dispel that myth because there’s some really great insurtech solutions that are for the independent agent,” said Doug Mohr, vice president, Industry Relations & Partnerships, at Vertafore.

Speaking at the Independent Insurance Agents of Texas’ Joe Vincent Management Seminar in Austin in late January, Mohr said there’s now significant investment in insurtech providers that are addressing problems specific to the independent agent channel.

Insurtechs are “starting from scratch … so they’re able to solve problems that we have had in our industry for years that we really haven’t had dedicated resources on,” he said.

There’s now a focus on technology to help agents grow their books of business, particularly commercial insurance business, retain the business they already have, and communicate more efficiently with their customers.

When it comes to renewals, a lot of available applications “have retention tools. … They will help you monitor and manage the retention. And make you more connected with your insureds through that renewal process,” Mohr said. Many are using machine learning to recognize patterns and discrepancies in an agency’s book of business, and to compare and check policies, both at renewal and during a policy audit. They help ensure no exclusions or coverages were missed when a particular piece of business was first written.

A lot of technological development is occurring in the area of process efficiency, Mohr said. For instance, take market appetite — “being able to match up your carrier’s appetite with a particular piece of business that you’re looking to place. There are some really exciting process efficiency solutions … in the marketplace.”

There has been a lot of interest the commercial submissions process — targeting the work involved in filling out a large commercial submission. When the account is being sent to multiple markets the process is further compounded and, so far, agency management systems haven’t done a good job of streamlining that process, he said.

“There have been six or eight startup companies in the last three, four years that are just solving that particular problem,” Mohr said.

Digital distribution in both commercial lines and personal lines is also being addressed. For example, on the commercial lines side, there are startup solutions focused on quoting and binding. On the personal lines side, there have been significant developments aimed at automation and rating. “It’s taking the rating capabilities you might do in house and pushing those out to your website … and allowing your prospects, new business, to be able to get an initial rate from your website,” Mohr said.

He acknowledged that rating automation is a sensitive topic. There are a lot of agents who want customers to interact with them in person. “But we have to realize that the insureds want to do it on their time, the way they want to do it. That may start with rating on your website.” However, he cautioned, “you can’t be following up with them three days later. You have to have a strategy for a quick follow up.”

For agents considering investing new technologies, Mohr had several recommendations.

1. Don’t adopt technology for technology sake. Set your business goals first — for the year, for the quarter, for the month — and then look at technologies that will help you achieve them. “If you’re not acquiring technology to solve a fundamental business goal, it’s my hypothesis it will most likely fail,” Mohr said.

2. Use what you already have. “Frankly, a large percentage of our customers that use our technology aren’t using it to its fullest. Look within what you already own and utilize what you have,” he said. It may take going back to your agency management system partners and checking out any new developments they might have. If your current agency management or comparative rating systems aren’t up to the task, then start looking into other alternatives.

3. Create a list of what’s available in the marketplace. Evaluate your options. When you try out a solution, evaluate it with a fine-tooth comb and be willing to fail. “It’s better to fail fast than to keep investing in something that’s not going to work.”

4. If you’ve got a system that works, use it and build on it. Mohr said one of the biggest mistakes agencies make is to get their system up and running, and then abandon it. He recommended having a staff member dedicated to the continued improvements in the system and an annual training budget to keep staff up to date.