HOW MANY commercials do you see every day about going to a website to get a quote and save money on insurance? Thanks to automation, customers can click on a few links, put in some personal information and receive a quote for an auto or homeowners’ policy. After this, they may be entered into a never-ending marketing loop of promotional offers, but they can easily access and purchase insurance products from the comfort of their own homes.
Automation of both products and processes has heavily impacted the insurance industry. Product automation is more prevalent in standard markets such as auto and homeowners’, where forms are standardized and rates are more rigid. As technology advances, I see automation playing an even larger role in the standard and surplus lines markets. The question is, how far will carriers push their boundaries? Some carriers will over-automate the product, suffer in losses and then re-evaluate the process to ultimately pull back after realizing not every account can be treated exactly the same.
There are always exceptions to the rule. Even the most standardized products will evolve to fit the changing risks. For example, I think this is a really exciting time for auto insurance. The introduction of different fuel sources; the development of autonomous cars; and speed monitors on vehicles, will cause the industry to accommodate these new technologies. Making product automation something we can utilize only after the emerging technology is completely understood. That said, I do think there’s always going to be much heavier automation in the personal lines market because of the lack of risk and policy complexity compared to commercial lines.
But I don’t think brokers should be worried. Certainly it was easier to get business before consumers had the ability to go online and get quotes, but a large element of service is lost in all this computerization. I think a lot of consumers get frustrated with the lengthy processes because they don’t understand the lingo. They want a more personalized explanation of what they’re purchasing. Even with a completely automated product, I have customers asking me to walk them through an entire application – which defeats the intention of automation. These are very educated people who just don’t understand insurance terminology and need assurances they’re getting what they’re paying for. There will always be a segment of the market buying coverage only because of a legal obligation; they don’t care what coverage they purchase. Most people using fully automated sites are in this market segment. It’s a substantial one, but brokers should cut their losses and target another consumer group or expand their product offerings.
Brokers should be automating their own businesses to keep up with carrier requirements. Since the format of delivering data is not standardized in the insurance industry, streamlining this process is more difficult. Evaluating your business processes to determine where most time is lost and gains are marginal, is a great way to start.
The quicker and easier it is to get necessary information to carriers, the sooner they can deliver products to consumers. Using different web programs can help make sure efforts are streamlined and not duplicated. Sales- and document-management programs can be a crucial for keeping your office organized and optimizing your resources. You don’t want individuals on your sales team spending hours filing leads. They should be out there getting more leads or following up on ones that were automatically prioritized.
Automation is and will continue playing a critical role in cutting costs, and in keeping the industry competitive. So it’s essential to have it in our office operations and our products. Will automation spell the end of insurance as we know it? Definitely not. As the industry changes, it’s important to embrace our changing roles as underwriters, brokers and agents. At some point, what used to work won’t work anymore, and embracing this change is important. I think the key is a fine balance between what should and shouldn’t be done manually – a balance we’ll be constantly adjusting.
Shonna Rosenberg is a surplus lines marketing underwriter who graduated from Appalachian State University with an MBA in International Business and a Bachelor degree in Risk Management & Insurance and Computer Information Systems.
