The rising influence of artificial intelligence will help, not hinder, independent insurance agents, a new paper from IT service provider NTT DATA argues.
Yet there remains compelling evidence to suggest that agents must adapt in order to avoid becoming obsolete.
There has been 83% growth in spending on enterprise virtual assistant (EVA) technologies in the last three years, and more than one-third of consumers say they have some interest in working with a robo-advisor for their insurance needs.
Carriers, too, are interested. Already, 32% of property/casualty personal lines are sold through digital channels, and evidence suggests that companies could achieve a 21% reduction in combined ratio by automating the sales process.
What’s more, insurance agents are falling behind. A full 80% of agents told Celent Research they are having trouble analyzing data fast enough to meet customer demand. If that isn’t met, these customers could start looking elsewhere for solutions.
“The rise of disruptive technologies in insurance is a reflection of customers’ dissatisfaction with the insurance industry’s traditionally slow and customer-unfriendly business processes,” NTT DATA wrote in “The AI Revolution in Insurance: A Reality Check.”
“Digital consumers increasingly prefer self-service purchasing and servicing models. Many…innovators hold the promise of delivering a more personalized, customer-centric insurance buying experience.”
Despite all of this, however, the human judgment and industry knowledge of insurance agents probably won’t be replaced any time soon. In this case, it’s much more likely that AI will enhance the performance of agents by providing them with better data and tools – not running them out of a job.
“AI, robots, and robo-advisors will continue to mature and will undoubtedly have a growing impact on the insurance industry and many other aspects of our lives,” says co-author Joel Collamer, vice president and insurance consulting practice lead, NTT DATA, Inc. “The more pressing question is how carriers should invest today to maintain their competitiveness and prepare for the future.”
There is significant demand from agents for carriers to improve their technological offerings. In fact, the number one request of agents surveyed by NTT DATA was for carriers to better integrate into agency management systems.
The group also recommended the following priorities for carriers:
- Providing superior customer experiences and best-in-class distribution channel strategies
- Building robust business and operational analytics to strategically expand capabilities
- Aligning for innovation, growth, and competitive advantage in the digital space
- Architecting cloud strategies, agile solutions, and flexible organizations to improve operational efficiency
“Winning carriers will follow the footwork of financial services counterparts who are using robots and AI to empower their agents – not beat them up,” the paper concluded.
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