P&C Industry Trends and Agency Operations in 2023
| Collin Passman and Mary McKenzie | Dec 12 2022
Let’s review six areas of change that are expected to influence change in agency operations. All categories have one thing in common: they will impact how we look at the P&C market and our customers. Due to the pandemic, many changes are occurring at a quick rate in our society. People are now more reliant on technology to manage their daily lives than ever before. Let’s review 1.) Customer Experience 2.) Hybrid Working 3.) Agency Workflows 4.) Client Insurance Needs 5.) Technology and 6.) Carrier Technology.
Customers are more educated in technology than ever before across all age group markets due to the pandemic. Customers' digital expectations are now higher than ever. The computer and mobile phone have kept them in touch with all aspects of their lives. This process was already in play before the pandemic. The pandemic just accelerated the pace.
Agencies were forced to move employees to work from home, changing how we interact with customers that, in the past, would easily stop by the office. Agencies were forced to keep in touch electronically by adding new communication methods like video conferences, digital signatures, electronic payments, and electronic policy delivery. Customers have been very accepting of these new technologies. Therefore agents need to re-think how to maintain the local close relationship of advisor to these customers now that the technology is being so well accepted. Customers are becoming more demanding of these types of experiences, while agents are seeing the benefit of the efficiency and the potential to cut costs. As the landscape changes how we keep our personal relationships with a customer in the digital age, we will see agents becoming more specialized to offer personal service. We will also see more focus on customer retention.
Prior to the pandemic most employees went into the office daily. Employers are finding that many were just as productive at home as they were in the office and that the added flexibility gave many employees a work-life balance that improved morale and allowed employees to perform better. With the 2-year span of the need to work from home, many put a great deal of effort and expense into creating a pleasant and communicative work from home environment. Many are now transitioning back to the office in a mixed mode so they can serve customers face to face. They are keeping the local advisor role in place but are also being flexible in allowing many employees to work from home. Some leaders are also finding that employees are more effective working from home which is strengthening the operation. Some employees are demanding this type of situation as a condition of employment.
The always-changing employee market is impacting agencies in many ways. Good employees are good for business. Unfortunately, the insurance talent pool is shrinking. Reimagining the work environment in hybrid form may be an answer to this issue. Agency leaders now can consider searching for new employees outside the local area, expanding the talent pool. Use of this model forces leaders to evaluate how to hire, train and maintain employee morale.
Agency leaders must focus on communication and coordination across the agency. They need to express goals directly and create a supportive working environment. Training is taking a new form in teaching the tools and how to focus on the customer in a new digital way. Internship programs are now being added to promote working in the insurance market to young adults and those looking for change in career.
With increasing operational costs, agents are becoming more and more focused on doing more with less. Leaders are looking at efficiency and are using technology to implement time saving measures. Current inflation is affecting wages, claims, and operational processes. Many are looking at using the digital self-service portals as a way to better connect with the customer while cutting overall operational costs. Adding services that free up employees from tasks while adding value to the customer experience is where we are headed in the future. Things like custom portals for customers to access, chat functions on your website, a paperless environment, automated technology to allow electronic payments, taking advantage of policy downloads and direct bill downloads are all ways to start moving in this direction. Lastly, the evaluation of internal workflows to save time and effort on staff is the best place to start.
Clients are expecting a growth in the use of technology by their insurance agents. They are expecting that their agent will be able to conduct meetings virtually using a user-friendly platform. They will want their policies and documents delivered electronically and will want quotes provided at a much faster rate. In addition, they will expect that agencies will accept payments electronically, either via direct deposit or credit card. More and more clients are looking for portals that they can log onto to reproduce insurance documents, report claims and make premium payments. They want the personal touch of an agent from a distance and at their convenience.
As technological advances are made, the agent must change with the times to keep up with them. Agencies will transition from LAN-based hosted servers to cloud-based agency management platforms that will provide a more secure, up to date method of conducting business. These cloud-based platforms will also deliver the most updated software to the agency in a quick and efficient manner that will limit the amount of downtime and productivity.
As network security becomes more and more of a concern, agencies will need to make sure that their data is secure from outside breach. That will mean usage of Multi Factor Authentication, advanced malware software, constant backup of data, updating and testing their security breach protocols, usage of password protection software and password protocols, and continuous education of staff regarding what to look for in emails and websites that would possibly signify an attempt to breach their network.
In addition, agencies will need to update their cyber insurance policies as risk factors grow. Agencies and their employees will rely more and more on the usage of personal devices such as personal laptops and cell phones. Agencies will need to be very vigilant in making sure that personal devices will not have access to their network unless they are vetted properly and pass through rigid security protocols. VPN connections and Multi Factor Authentication will be paramount in protecting the security of the agency network.
Insurance carriers will not be exempt from modernizing their technology to keep up with the times. Carriers will need to have full integration with an agency’s management system. Agency users should be able to click once and transition from their agency management system to a carrier website for ease of quoting, endorsing, and cancelling policies. The path of least resistance will be the one that an agency user will take.
Carriers will also need to continue to improve download and document delivery capabilities. The days of paper being delivered are over. Agency users want to easily be able to receive documents from a carrier and transit them to their client. If possible, they want to take a hands-off approach and have the documents sent directly to their client from the carrier, while at the same time have them attach directly to the client’s records in their agency management system.
In addition, insurance companies will need to improve internal methods of processing policy documents and claims and make it easier for their own employees to provide information in a quick and efficient manner. Secure chat boxes and email inquiries are at the forefront of communication now and those experiences should continue to evolve.
Tags: Commentary , 2023 Trends