Why insurers must embrace an agent-fueled digital marketplace

The future of insurance may not be what you had imagined. Many had visions of consumers answering a few questions online and clicking to buy policies in an Amazon-like experience. In fact, many insurtechs were built around this model and made waves since they launched. But the agent distribution channel remained strong.

Why? Agent knowledge and insurance expertise are critical to the buying process—and agents have continued to demonstrate their value. Insurance is a complex product that protects purchasers. As it turns out, consumers want the guidance that agents provide. The agent distribution channel is so strong that many companies founded on the direct-to-consumer model have turned to agents to help sell their products.

But there’s also a bigger change taking place. While consumers want the agent’s expertise, they’ve seen the ease and convenience of buying and servicing insurance online. Some insurtechs are gaining prominence in the agent world because they’re easy to work with. Their goal—to streamline workflows so agents can deliver the same on-demand experience that the direct-to-consumer companies promised—is a perfect match for agents. This is leading to new digital marketplaces.

The digital marketplace brings agents, carriers, customers, MGAs and others involved in insurance distribution together on one platform making it fast and easy to find the right appetite for a risk and deliver coverage options to customers leading to a more seamless insurance buying experience. The marketplace can have a variety of forms such as an aggregator, a quoting or sales platform, or a network representing a variety of market appetites and insurers. Whatever the genesis, insurance digital marketplaces typically have similar features: reducing data entry, streamlining processes, and decreasing the number of screens needed to service a client.

Insurance customer expectations are real. Clients want an on-demand, fast experience. They no longer will provide pages of information to get a quote or wait days for agents to send them quotes from multiple carriers. Less tech-enabled carriers risk losing business to newer digital insurers as agents are increasingly turning to them when customers want information fast.

A win for all
Both established national insurance brands and newer digital insurers can reap value from digital marketplaces. National providers can easily boost their digital capabilities and quickly elevate the customer experience. Carriers founded on direct-to-consumer models can use these platforms to tap into the agent distribution channel and gain brand recognition.

For carriers, the digital marketplace enables them to distribute more premiums to more customers. It also enables them to make sure they are getting the risks they want to write and more high-quality insurance customers.

For agents, digital marketplaces save them considerable time and enable them to provide the buying experience customers demand. Previously, they had to spend significant resources to connect and enter data with individual carriers. Now agents can manage a single digital relationship within marketplaces, providing clients with a variety of carrier options. The marketplace also reduces data entry and limits the number of screens agents use. Bottom line: agents get more information faster to their customers.

This ultimately leads to consumers winning. They get the guidance and advice from agents to make sure they have the right coverage for their risks. They are connected to the carriers that have the best products for their risks and get coverage at a competitive price.

Capitalizing on the digital opportunity
What should a carrier do? The first step is to be present on the platforms their agents are using. Ask your agents what tools they are finding valuable. If you don’t have an application programming interface that enables you to connect easily, consider working with your technology department or an outside vendor to create one. This can make integrating with these platforms faster and easier.

It’s also important to consider the design of your interactions with agents. Often carriers that work with consumers and agents design everything with the consumer in mind. But agents have a lot more insurance knowledge and don’t need the base level packaging that customers do. Agents also have specific preferences when it comes to workflows. For example, while consumers might like to see one question at a time when submitting information for a quote so they can feel like they are making progress, agents prefer to see all questions at once. Make sure you have agents in mind when working with these platforms but also for your own agent-facing processes.

Carrier portals with a twist
Consider this. Carriers that participate in digital marketplaces are not losing control but instead speeding up mundane tasks and making the distribution channel more efficient. Carrier portals can still be used to finalize and bind policies. But marketplaces make it faster and easier for agents to identify carriers with the appetite for particular risks.

This puts carriers right at the point of sale and eliminates agents’ needs to visit individual portals just to shop risks. As digital marketplaces evolve, expect them to continue to speed up agent interactions with customers and insurers.

What’s next? As more platforms utilize data enrichment, expect that fewer data points will be needed to return bindable quotes. An agent won’t have to figure out how far a fire hydrant is from a house, for example. The solution can tap into a database that tracks the location of all hydrants in an area and automatically pull that information.

As this technology moves forward, some of the power will shift to consumers. More agencies will have the capability for consumers to quote. Customer-facing portals will give clients easy access to their insurance information.

Digital marketplaces will seamlessly connect carriers, agents and customers raising the level of the insurance buying experience. It’s a win-win-win. Carriers will sell more coverage and have access to more customers, agents will spend their time advising customers rather than completing mundane tasks, and customers will get the best coverage at a competitive price.