The Future of P&C - Bright or Bleak?

Apr 10, 2016

  1. GXR2
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    GXR2 Super Genius

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    Commoditization of auto and home insurance. The future trend of agent only carriers to direct writing as profit margins drop. Downturn of agent value to younger consumer as industry shifts toward emerging technologies. Social media group price models. Online consumer comparison raters and instant quote and issue with incorporated, automated digital signature technology. Telematics merging with collision avoidance systems, weather and terrain monitoring technology for real-time risk analisys and a pay per usage price model.

    These are some trends and I see on the horizon. Will the agent and agency model have a place? What is the future of P&C agent in the next 10-20 years.

    Let's hear your opinions.
     
    GXR2, Apr 10, 2016
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  2. Derrick
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    I've been listening to a lot of podcasts about this subject and I'm not as down as some other agents/agencies.

    I think it will evolve and change. I think in order to stay competitive our stance on technology is going to have to change. Online quoting (and turning around a set-in-stone quote in 20 minutes is a must). I think access through a web portal as well as phone application with a "chat with your agent tool" either directly or through a text to answer any questions digitally that's not e-mail. I think much like most management software, insureds need to be able to track conversations, changes, and any other logs just as much as agents.

    I think better agencies need to be more proactive in re-quoting customers. Appetites change on the personal lines. It doesn't happen all at once, and finally an insured goes shopping around and realizes that even though you have a better rate carrier, you never requoted them so they want "better service" elsewhere.

    I think smaller things like sending birthday cards and thank you cards (for first time, and requote business) is a must. In bulk, you can do it for like $1-$1.50. Considering an insured is likely paying you hundreds of dollars a year, a few cards during the year isn't bad. Plus it can be automated through some pretty cool technology. I read something on birthday cards and in this day and age sometimes it's the only card people get.

    I think P&C agencies don't take advantage of REAL life insurance planning enough. I did captive life for 2 years and there are a lot of people out there that need some term. After a year or 2 of gaining trust with our customers, we need to reach out and show them them $20-30-40/mo can protect their whole family and do good fact finders and show them why.

    I think going forward we are going to need more targeted marketing. Instead of just sending generic mailers, we need to send specific mailing lists. Like sending condo fliers to condos. Not only that, but I think it just needs to be more than "we sell condo insurance! Buy from us!" We need to write mini articles on some basics of condo insurance (with more detailed articles on your easy accessible site, like "michiganins.com/condo." With a quote button specifically for condos at the top and bottom of every article about condos. People know you and every other agency does "home auto commercial." But what do you really do? And how do they know that?

    Also social media and relaxation of the industry. Ok. What I mean by that is everyone who goes with the agency needs to like us on Facebook. We need to run referral contests. We need to sponsor charity runs and post it. We need to not only get likes on social media, but be involved in the community and even make giving back an integral part of your business. Would your prospect rather give the guy down the business, or the guy who's proven to give back to charities and stuff?

    Not pushing away non-standard customers. 40% of the people in MI don't have insurance so when a non-standard prospect with no prior calls in, agencies tend to blow these people off. That's why they go direct for their auto, even if they lapse. And that's exactly what they are going to do with their home too, but unlike auto they have to keep the home or they lose the house. Or renters.

    I don't know, just some ideas.

    EDIT: And we need to start embracing eSignatures and signing offsite like through a smartphone 20 miles away. People can't always come in and take 20-30 minutes out of their day. We need to sign them up fast and off site sometimes.
     
    Last edited: Apr 10, 2016
    Derrick, Apr 10, 2016
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  3. insurance1822
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    insurance1822 Guru

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    ^Do you own the agency? If not, this whole concept isn't your problem.
     
  4. indienoise
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    There's a big reason I gladly embrace nonstandard business. That market segment is growing, and as long as the economy is tough (and it's looking like it will be for the long term), the nonstandard segment will continue to grow. Yes, preferred business is more profitable and less work in the long run, and should be pursued, but I think of serving a range of customers as having a diversified investment portfolio.

    I also agree we need to embrace technology and the changes it brings. Lets be honest, why invest in ppc or other marketing to bring in prospects online if you can't compete with what the 800 number carriers have to offer? If someone is looking online, they want to see SOME kind of fruit for their efforts without waiting for a phone call, even if it's just a soft quote, not actually binding coverage.

    I also think Derrick is into something about creating an emotional connection with clients. Look what that does for state farm.
     
  5. Derrick
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    Not yet. Still got another year or two. Got a business and marketing plan already. It's a work in progress. Biggest thing holding me back is access to regionals. Among many other things.

    And it does concern me not only because of that but if my agency is outdated then that means I'm outdated, and out of a job.

    ----------

    I have my non standards on a single strike policy. I try to get everything at once (and entice them with multi policy discounts) to switch everything over at once. If they lapse on their auto to get tabs, I will never write their auto again but I will gladly service their home/renters insurance. Plus some of those turn out to be great risks and end up in standard and preferred pools.

    And I disagree. People still call agencies and it's worth it to invest online. Facebook, SEO, articles, PPC. I just think we need to be more accessible than the traditiona phone or, at most emails. But I agree about having an online rater even if it's just a non binding quote.

    It's kinda like SF, but you're converging costs (which we have because we're Indy), and value,l which includes shopping for you, birthday/thank you cards, calling a few weeks before every renewal to see how they are, and if there's anything they would like to talk about. This is called value innovation and it's a Blue Ocean Strategy.
     
    Last edited: Apr 10, 2016
    Derrick, Apr 10, 2016
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  6. indienoise
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    indienoise Guru

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    I should clarify. Internet leads need immediate interaction. I had to suspend my ppc campaign because I couldn't guarantee it. I will restart it once my first staff member starts, so we can make immeiate contact. My PPC was doing well - converting clicks to leads at a rate of about 20% - but it was taking me an hour or more to make contact, so I wasn't getting many answers. Online shoppers want immediate results. You've got to be able to deliver, either by immediate contact on the low tech side, or some kind of soft quote to temporarily appease them until you can make contact. I'm currently trying to resolve both sides of that before I start my ppc back up again. Point is, internet shoppers want results, and they want them now.
     
  7. nyc2phi
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    nyc2phi Guru

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    This forum is turning into a doomsday discussion board. I feel like we're one thread away from covering bunker building in our backyards.

    If you're concerned with change in the industry, hedge your bet a bit. Have other investments, work with carriers who align themselves with the independent agent model (The Hartford is a company who clearly doesn't), and lastly keep writing as much good clean business as possible. We'll be fine...
     
    nyc2phi, Apr 10, 2016
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  8. indienoise
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    indienoise Guru

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    People DO get freaked out about stuff like this. I agree It shouldn't worry most of us. I don't agree we should treat it as business as usual, the way it's been done the past 30 years. Keep what works, change what no longer does. Meanwhile, keep a finger on the pulse. Be ready for change.
     
  9. GXR2
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    GXR2 Super Genius

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    As the law stands insurance is required to be sold through licensed "agents". Would an automated, multiple carrier, online model qualify as an "agent" to quote and issue? Or would it only be allowed to generate quotes then pass it to a human "agent" to issue?
     
    GXR2, Apr 11, 2016
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  10. nyc2phi
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    Didn't google already try this an fail? Progressive has this too and I get calls all the time from people saying Progressive said you're more competitive can we go through a quote?
     
    nyc2phi, Apr 11, 2016
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