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When VP of Marketing at Insurance Technologies Corporation Becky Schroeder attended the recent InsureTech Connect 2016 in Las Vegas, she made a stark realization: only a small fraction of the attendees were insurance agents. Dedicated to insurance technology, the inaugural event attracted around 1,500 people, most of whom were entrepreneurs, investors and insurance executives. Insurance agents were missing, however, and Schroeder sees the lack of presence as a big problem.
“The discussions covered every part of the insurance industry. This included distribution, products, claims, underwriting, data, regulation, marketing and even customer experience,” Schroeder says. “There are people out there who see tremendous opportunity in our industry. They are looking to replace agents with bots and artificial intelligence and take agents’ commissions in the process.”
So, for those agents who weren’t at the event, what do they need to know about insurtech?
It’s raining cash in Insurtech
“According to CB Insights, there have been 78 investment deals with insurtech startups so far this year; that’s 50% more deals than in all 2015,” Schroeder says. “Last year $2.5 billion of investments went to insurtech companies. 2016 is on track to surpass that. Investors and startups see the independent agent channel as antiquated and not great at attracting modern consumers. But, they also recognize the hard work involved.”
“It’s not a matter of if one of these big-eyed dreamer startups will figure out how to provide value at the level you do. It’s a matter of when.”
Are You Paying Attention?
Schroeder believes that insurance agents who ignore the rise of insurtech do so at their peril. She gives the example of how both Blockbuster and Borders were usurped by the disruptive innovators Netflix and Amazon respectively.
“It would be a mistake to ignore what is happening in the industry,” Schroeder says. “These insurtech startups are coming. Many of them will fail, but it only takes one. Agents have survived many obstacles that were meant to be their end: direct writers and the internet to name a couple of the recent ones.”
Schroeder is certain that agents can survive this next challenge and even strive for greater success and grow their businesses. “But to do so, you have to pay attention to what’s happening and not turn your back on it,” she says. “And, you need to adjust to meet consumer expectations and demands.”
Stay Positive
Although agents do face a challenge to remain competitive in the modern market, Schroeder encourages agents to remain positive. Despite the rise of technology, consumers still desire human expertise and advice.
“Even for auto insurance, more than 81 percent of shoppers prefer to buy from an agent rather than online,” she says. “But, to assume that number won’t ever change would be a huge mistake.”
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