In the past few years we have seen the insurance industry go through some major changes. Whether it’s getting your leads through inbound customer calling, using social media or buying leads, the insurance world has changed. As an Agent, you need to make sure you keep up with these changes and adapt how you do business to keep your agency on the cutting edge. Let’s look at three major trends that have changed the world of Insurance.
- Technology
I have written before how technology has become such a major part of our daily lives, and how as an Agent to continue to move forward you need to add technology to your Agency. It is not just adding e-newsletters, social media or digital survey’s that are a trend within the insurance industry it is also the fact that data and information are so much more available to the everyday insurance customer. They no longer need to be in the know about insurance to find exactly what they want. With everything being digital they can get 10 insurance agents calling them with quotes from filling out one online form. Customers can cherry pick what they want from their insurer and if they don’t like it they can switch in six months to another insurer found decisively through the internet.
- Cost reduction
Price. This can go together with the technology trend, in that due to the immense about of insurance data at their fingers tips customers are able hunt for what will fit them financially much easier than ever before. This new way of insurance shopping is directly effecting the way the industry has always done business. According to the Chicagotribune.com, “direct insurers — those that sell policies directly to consumers through the mail, the Internet or telephone solicitations — had an average ‘acquisition cost’ of $487 per policy in 2014, while captive insurers — those relying heavily on exclusive agents — spent an average of $792.” Adam Klauber, an analyst with the Chicago-based investment bank also found, these lower acquisition costs are driving higher premium growth for the direct insurers, thus allowing them to sell policies at a more competitive rate. Don’t think this is a one and done deal either. More than likely, these cost changes will only continue to grow with policies lowering as business and technology continue to shape how we find and purchase insurance.
- Demographic Change
This year, people born between 1980 and 1991 have the most buying power of any generation and they really like to protect their belongings. This demographic change has had a huge effect on how insurers not only find new customers, but also how they interact with them. In my post, 3 Tips for Selling Insurance to Millennials, I touch on ways to bridge the demographic insurance gap, and find ways to reach them. Obviously, one of the big ones is through technology, with loyalty and relationship building tailing closely behind.
There are obviously many other current trends plaguing the 2017 insurance industry. The three discussed can be studied separately, but are probably best when looked at together to see what direction your agency should be heading for the future.