“One if by land, two if by sea, three if by Internet.”

If Paul Revere were alive today and working in service of the independent insurance channel, he would find not one, not two, but three lanterns shining in the Old North Church.

“The insurtech startups are coming.”

Our only hope is that his midnight ride is not wasted on a people, fast asleep, unwilling to conceive of the threat approaching.

Unlike the war American Revolutionaries fought for their freedom from the British, there will be no winner in the battle between insurtech startups and independent agents.

Everyone is looking for that great hype who will come in and “disrupt” the insurance industry, (always with the assumption this is a positive for insurance buyers).

No such thing will happen.

There will be no great destroyer of antiquated process, no savior of customer experience, no “Uber” like flip in standard methodology.

There will be no doomsday for the independent insurance agent.

[tweet_box design=”default” float=”none” excerpt=”Independent insurance agents will die a slow, dull death by 1,000 #Insurtech startups.”]Instead we will die a slow, dull death by 1,000 insurtech startups.[/tweet_box]

Maybe.

If we allow it to happen. If we do nothing. If we remain fast asleep, wrapped in our old comfortable blankets, as the sounds of warnings go riding by…

“The insurtech startups are coming.”

New technology is coming to the insurance industry, of this, there is no doubt. It will innovate inefficient process, smooth customer experience and accelerate growth for those who choose to harness it.

But as the lines between insurtech startups and traditional independent agencies blur, the winners and losers are far from determined.

My challenge to you, good friend, is will you answer the call to arms?

Insurtech: Friend or Foe?

insurtech stand offBefore we take this “Battle” analogy further, it would be prudent to first examine the nature of the threat insurtech startups pose to the independent insurance industry.

Dan Schreiber, CEO and co-founder, of Lemonade, makes headlines by unilaterally dismissing the traditional insurance model with his seemingly ignorant, (or at best naive), take that removing humans for the insurance buying process improves customer experience.

[tweet_box design=”default” float=”none” inject=”#insurtech”]It’s easy to trash the traditional insurance channel when you’ve never had to deny a claim.[/tweet_box]

For a deeper look into Lemonade and why I’m not sold on their “Disruption,” read Nick Lamparelli’s article in Insurance Thought Leadership, The Story Behind the Lemonade Hype and my own piece on P2P insurtech, 3 Reasons Why P2P Insurtech Startups Will Not Disrupt the Insurance Industry.

While some insurtech startups have come out, “guns blazing,” at the independent insurance industry, it’s prudent to first state that not all insurtech startup companies are out to “disrupt” the insurance industry.

Some, like CoverWallet, who you’ll read about below, seem to be nothing more than customer-experience focused, technology-based insurance agencies looking to carve out their place in the market.

Others still, like Bold Penguin and TechCanary, are using technology to innovate the insurance customer experience alongside the independent agent.

This point is…

There are many varieties of insurtech ccompanies in the marketplace and for different reasons, we need to be aware of them all.

The companies outlined below are just a taste of what is happening in the insurance technology marketplace.

Insurtech Foes of the Independent Agent

Embroker

Embroker is taking on the traditional insurance customer experience.

From the Embroker website:

“You wouldn’t trust your marketing budget to someone that relies on paper forms, fax machines, and gut instinct. Isn’t it time to expect more from your insurance broker?”

Are they wrong?

No.

esignatureIt’s time to admit the independent insurance industry is reluctant to adopt even fairly standard and widespread technology such as esignature.

It is time for insurance consumers to expect more from their insurance broker (agent).

Unfortunately, right now, it seems like insurtech startups, such as Embroker, are the most willing to address the gap in insurance customer experience head on.

embroker

Embroker’s technology is allowing businesses to manage their portfolio of insurance coverages with ease and on their own time.

Isn’t this what your Customer Service Representative (CSR) is supposed to do in an independent agency?

Yes.

Are CSRs available 24/7?

No.

Are CSRs limited by the technology solutions provided within the agency?

Yes.

Is it possible that the growing Millennial business owner is unwilling to abide restricted availability and limited technology solutions in their customer experience?

ABSOLUTEY.

Again from the Embroker website:

“Whether you use Embroker to buy new policies or manage an existing corporate program, our software is free of charge. Like traditional brokers, we get paid commissions by insurance carriers. Unlike traditional brokers, we earn our commission by adding value.”

I take a offense to that last line.

I was an independent agent for eight years. My wife is a second-generation owner of any agency that grew revenue double digits last year. Our family lives and breathes the independent channel.

That’s how I can say for fact:

The traditional insurance channel (independent agents) earn their commissions by adding value to insurance consumers.

Learn more about Embroker.

LESSON: If we can look past Embroker’s shallow, rage inspiring commentary, we can see the deeper issue. We’ve opened the door for organizations, like Embroker, but consistently take a laggard position on technology.

CoverWallet

In the commercial insurance customer experience space, CoverWallet is a primetime player.

What makes CoverWallet a potential force in the online commercial insurance space?

It’s two things:

1) Clean and clear customer experience. The CoverWallet website is easy to navigate, provides deep, rich answers to common insurance questions and offers multiple contact options throughout the site.

2) Prioritize access to human agents. CoverWallet, unlike many of their insurtech peers, has chosen to highlight human agents throughout their online customer experience.

coverwallet

It’s #2 that gives CoverWallet a shot.

Most insurtech startups focus on removing humans from the equation. There is very little, if any, evidence that insurance consumers prefer an insurance sales process that removes “Human Agents.”

CoverWallet is combining an improved customer experience with a “Human Agent” option. These guys could be serious players in the commercial insurance marketplace for years to come.

Learn more about CoverWallet.

LESSON: “Human Agents” are still the keystone of the insurance buying process. However, insurance buyers will continue to become more discriminating in the level customer experience they’re willing to abide in reaching a “Human Agent.”

Ladder

Ladder Insurance Services, Inc is taking a full-frontal attack to traditional life insurance sales.

The Ladder website cites a distaste for “…high pressure sales tactics, expensive products, and slow processes” as the impetus for creating “better life insurance.”

“No agents. We have eliminated direct, commissioned sales agents. We give you the service you want without any unwanted sales pitches.”

ladder life insurance quote

According to their marketing, Ladder is focused on “Re-engineering” life insurance. What that exactly is being “Re-engineered,” (outside of a modern UX), I can’t say.

That being said, they are taking the current en vogue, “Anti Broker” mantra so many other insurtech startups have based their messaging around.

What differentiates Ladder from the dozens, if not hundreds, of other D2C Internet life insurance players, again I can’t say. However, having recently received $14M in Series A funding round, led by Caanon Partners, Ladder seems to have positioned themselves with every opportunity for success.

Currently Ladder only write life insurance in California.

Learn more about Ladder.

LESSON: User experience matters. So much so, venture capital firms are willing to place large bets (if you consider $14M ‘large’) on insurance brokers whose primary differentiation apparently rests on the removal of “Human Agents” and a slick user experience.

Insurtech Friends of the Independent Agent

TechCanary

Agency Management Systems and innovation are not concepts often considered synonymous with each other.

Born from one independent agent’s frustration and dissatisfaction with the restrictive nature of legacy agency management systems, TechCanary natively leverages the Salesforce.com platform to provide flexibility and control to the agency itself.

techcanary

Technology solutions must be able to speak to one another. By building TechCanary directly into Salesforce.com, agents have access to the AppExchange. Apps from companies such as Docusign, Quickbooks, Google, icontact, Skype, RingCentral, Evernote, and thousands more have developed solutions, paid and free, that can be quickly and easily integrated into an agency workflow.

While other agency management systems continue to innovate, (much respect to power player Vertafore and the work they do for agents across the country, big and small), too many of these systems continue to be walled gardens.

TechCanary shows us that there is another path, an open path, where tools seemlessly communicate, helping independent agents rapidly improve their insurance customer experience.

Learn more about TechCanary here.

LESSON: The next wave of insurance technology will provide flexibility and adaptiveness to independent agents.

Bold Penguin

Bold Penguin is working to become an “Embroker” type technology-driven sales platform, but for independent agents.

It’s easy to look at the tools some insurtech startups have created for themselves and make excuses as to why we will never have such things.

Thankfully, there are insurance technology companies, like Bold Penguin, building tools, not just for themselves, but to serve the larger pool of insurance agents.

bold penguin home

As with all fresh entrants to the insurance space, Bold Penguin is focused on improving customer experience.

Bold Penguin’s philosophy, in many ways, is similar to that of TrustedChoice.com.

There is enormous opportunity in online commercial lines lead generation, but human agents still need to answer the phone and close the business.

Bold Penguin’s platform helps facilitate that connection.

Click here to listen to our recent interview with Bold Penguin co-founder, Ilya Bodner.

Learn more about BoldPenguin here.

LESSON: Traditional insurance providers need insurtech startups to push innovation within the industry. Independent agents must capitalize on the new tools being made available to them.

TrustedChoice.com

TrustedChoice.com was founded as a platform to help independent insurance agents fight back against their direct and captive competition in the digital marketplace.

This mandate forces TrustedChoice.com to fight on two fronts:

  • Expanding the Trusted Choice brand reach.
  • Generating new online sales opportunities for independent agents.

In 2016, TrustedChoice.com will attract over 4,200,000 visitors and deliver over 100,000 one-to-one insurance referrals to agents across the US.

find an insurance agent

What differentiates TrustedChoice.com?

Close ratio.

When independent agents connect with a TrustedChoice.com referral, that opportunity is closed between 45-65% of the time.

That is a ridiculous close ratio.

What’s the secret?

We force consumers to choose an agent.

This creates built-in buy-in. Essentially, referrals from TrustedChoice.com are already sold.

All the agent needs to do is pick up the phone.

If you’re interested in learn more about the future of TrustedChoice.com, listen to this interview with TrustedChoice.com CEO, Chip Bacciocco.

Learn more about TrustedChoice.com Referral Program.

LESSON: Innovations to insurance sales must improve customer experience and leverage the psychology of the modern online shopper.

RiskMatch

So much of the emphasis on insurtech focuses on sales and marketing. RiskMatch is helping insurance agents do the work of insurance better.

From the RiskMatch website:

“Our patented platform provides an array of portfolio management and placement solutions, analytics, internal and external benchmarking capabilities, and information management services designed to enhance performance, reduce costs, facilitate growth,and improve client service.”

riskmatch analytics

RiskMatch is helping agents better understand their clients, including policy gaps and benchmarketing for similar types of clients.

RiskMatch is also helping agents better utilize their carrier relationships, including which carriers want to write what types of business and for how much.

Learn more about RiskMatch.

LESSON: Innovation isn’t limited to new sales opportunities. There are many insurtech startups working to improve the process and productivity of insurance agents after the sale.

The Rub

Those who openly seek to “disrupt” the insurance industry show a lack of understanding and respect for an industry upon which the entire world has been built (financially).

Are in some cases, radical improvements necessary to facilitate the expectations of modern insurance consumers?

Yes.

There is no doubt.

Independent agents must relinquish their laggard mentality to stay relevant.

If they do not, the demise of independent insurance agents will not come from the widely heralded “Unicorn” we all saw coming, but rather a thousand different startups, all peeling off their slice of the pie.

Independent agents must heed this modern day call-to-arms.

“The insurtech startups are coming!”

defending independent insurance agents

But, believe me when I say this…

We will be surprised by how many step up.

Predict the demise of the independent agent at your own peril.

For as long as TrustedChoice.com, Agency Nation and our friends at the Independent Insurance Agents and Brokers of America exist, we’ll continue to fight for the most valuable asset within the insurance industry, its people.

[tweet_box design=”default” float=”none” inject=”#insurtech”]Insurance is a commodity. Customer experience is a commodity. Humans are not.[/tweet_box]

Independent agents decommoditize insurance.

When our insurtech competitors realize it’s humans that make insurance special, they may actually have a shot at winning.

For now, my money stays on independent agents.

Here is a quick recap of the 7 lessons learned while considering the demise of independent agents:

1) Embroker LESSON: If we can look past Embroker’s shallow, rage inspiring commentary, we can see the deeper issue. We’ve opened the door for organizations, like Embroker, but consistently take a laggard position on technology.

2) CoverWallet LESSON: “Human Agents” are still the keystone of the insurance buying process. However, insurance buyers will continue to become more discriminating in the level of customer experience they’re willing to abide in reaching a “Human Agent.”

3) Ladder LESSON: User experience matters. So much so, venture capital firms are willing to place large bets (if you consider $14M ‘large’) on insurance brokers whose primary differentiation apparently rests on the removal of “Human Agents” and a slick user experience.

4) Tech Canary LESSON: The next wave of insurance technology will provide flexibility and adaptiveness to independent agents.

5) Bold Penguin LESSON: Traditional insurance providers need insurtech startups to push innovation within the industry. Independent agents must capitalize on the new tools being made available to them.

6) TrustedChoice.com LESSON: Innovations to insurance sales must improve customer experience and leverage the psychology of the modern online shopper.

7) RiskMatch LESSON: Innovation isn’t limited to new sales opportunities. There are many insurtech startups working to improve the process and productivity of insurance agents after the sale.

Thank you,

Ryan Hanley

P.S. If you thought this was cool, click here to subscribe for more Agency Nation.

gif credit #1: giphygif credit #2: giphy

Share This