Independent Agents Thrive with Technology

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There is an interesting trend I have been watching in some of the InsurTech startup companies that when they started – announced with great fanfare – they said how they were going to disintermediate the independent agent. Over the years, many have said independent agents are irrelevant.

insurance hype

Here are a few indicators that these companies are starting to change their tune. Reality will do that sometimes.

From Metromile Q2 2021 Shareholder letter

“We launched the initial phase of our new independent agent program in the second quarter of 2021, with more than 600 agents appointed to date. We are incredibly excited about how this channel diversification complements our existing model.”

From Root Q2 2021 Shareholder letter

“We are scaling our internal sales agent program and piloting a program to provide our product through independent licensed agents. Offering the human touch widens the funnel to more good drivers that can benefit from Root’s technology and enables another connection point with potential customers.”

From Lemonade Q2 2021 Shareholder letter

“While we have continued to see strong performance in our direct channels, we have been positively surprised by other means of acquisition. In Q2 21, these other distribution channels (primarily agent partners and Lemonade graduates) more than doubled their share of homeowner sales relative to Q2 20.”

Next Insurance

Next Insurance has opened their technology platform for small commercial insurance to agents. You can apply and be licensed to sell the Next line of products. They have a “Low minimum production of 1 policy per month.”

My Thoughts

Independent insurance agents and brokers have remained remarkably resilient through all the hype of the last few years that they are irrelevant and will be disintermediated. It seems consumers have voted with their wallets that many (most?) prefer the Agent to Consumer (A2C) connection. I am proud of the work we are doing at Catalyit to help insurance agents continue to thrive using technology. We are getting close to launching the platform to agents in multiple states. Be sure to get on the list to know when we are ready.

As an agent, what should be your response? Some options I can think of include:

  • Why would I want to support a competitor who is trying to take my clients?
  • Would they (pick any above or others) give me better access to a larger number of prospects I am not currently targeting?
  • Do I have the systems in place to take advantage of their marketing and technology platforms?

I’m sure there are many other considerations.

If consumers behaviors have changed, then our response could be:

  1. Keep doing what we have always done (it has worked so far).
  2. Or experiment with new distribution models and tools to reach consumers where they are.

I hope we can have a robust conversation about taking advantage of any technology tool that will help your agency better serve customers regardless of where it comes from.

What do you think? Leave a comment.

PS: I posted a version of this article on LinkedIn yesterday afternoon.

Steve Anderson provides information to insurance agents about how they can use technology to increase revenue and/or reduce expenses. He speaks professionally to hundreds of agents each year on the future of technology, the social web, and how insurance agencies can establish their Internet presence.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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