WHAT’S THE FUTURE OF THE INSURANCE AGENCY SYSTEM??
WHY CHOOSE, WHY NOT BOTH??
By now most of us have at least played with the Internet. Whether you have used it lightly or heavily, as a “lurker” (def. ‘lurking’ – passively tuning in to websites without proactive interaction or response), as an e-mailer, as a shopper, or as a ‘Net-Addict’, you know that it will affect your life and the lives of your family, associates and clients. Some ‘seasoned citizens’ have jumped right onto the information super-highway participating in discussion groups, e-mailing friends, joining e-clubs, participating in auctions, and, of course, shopping. ‘Window shopping’ has never been easier for both goods and services – like insurance.
Other people, over 40 or 50 have played on the Internet, but shy away from it as a vehicle for normal commercial activities, still prefer touching the goods and speaking to a human being face to face. I have been told that the same phenomenon occurred for the first ten years of telephone communications. Some people refused to use the phone except for emergencies, preferring to write letters for non-essential communications and to personally visit those friends and associates with whom one-on-one communications were necessary, but, eventually, even the reluctant became converts to the convenience of the telephone.
The grandchildren and great-grandchildren of those ‘reluctants’ are the technophobes of the Internet. They do not know how to use the Internet yet (but neither does anyone else), so they shy away from it and seek ‘brick and mortar’ solutions to their problems – including the purchase of insurance. But for how long?
Once our society figures out how to use the net to its potential, the convenience and ease of net-communications and net-commerce will overcome today’s technophobes as readily as Mr. Bell’s invention did to nineteenth century technophobes over a century ago, and, while there continued to be telegraphers for sixty years after the introduction of the telephone, you would be hard pressed to find a Western Union employee toiling over a telegraph key today.
How would you like to become the telegraph operator of the 21st Century? If you would, all you need to do is disregard the impact of the Internet and e-commerce in the Strategic Planning for your insurance business.
Let’s say you would like to be one of the converts – that you would like to use the ‘net to your advantage as a businessperson. WHAT SHOULD YOU DO TODAY??
The answer is not to spend thousands of dollars on a website without a purpose. Most insurance agency websites are no more than Internet billboards. They tell the public who you are and what you do. So does the telephone book, but, unlike the telephone book, you are not easy to find on the Internet, and, unlike the telephone book, the Internet is open to the world’s population, not just your community’s. So you will quite likely get inquiries from people far outside of your agency’s “strike zone”, and, if you ask the “web-wise” (def. Web-wise = veterans of the Internet commerce community), they will tell you that the quality of most inquiries on the Internet is quite like that of a full page Yellow Page ad.
So if you should not hurry on the Internet, what should you do?
LEARN & PLAN !!
Most people find it much easier to do, than to either learn or plan, but if you educate yourself about e-commerce you will find that there are benefits that can be derived today from an e-presence and significant benefits that will be available soon (within a few years) as interactive e-commerce becomes more prevalent. Study e-commerce, take seminars (but don’t buy their products yet), take college classes – this is a new form of commerce that cannot be learned by osmosis, and read the magazines as new products and services continue to be unveiled.
Include e-commerce as an integral part of your long-term strategic planning process. As you identify specific products and services that would benefit your company, integrate them into your annual plan and participate on the Internet.
Too many agents have websites because they “ought to” or “have to” to keep up with technology. Without the Plan, this strategy inevitably fails because, even when the website is operational it is ignored and forgotten, prey to the latest crisis or ‘idea of the month.’ However, if the website and e-commerce is a living part of a strategic and tactical plan it becomes institutionalized and a part of daily work-life for the agency.
In order to use the Internet and e-commerce as a tool for insurance agencies, it makes sense to incorporate them into the agency’s business activities. In the short term, it will add work to the agency staff as they interact with customers on the web as well as by phone, mail, and in person, but, in the long term, e-transactions will replace both mail and telephone contacts as the prevalent method of communications for an agency.
A website is only useful if it is interactive. That can be as simple as a device for managing e-mail and forms (applications, endorsement requests, claim notification). We already know that the short-term (within a few years) application of the Internet will be to permit clients to inquire about their policies and billing information without the need to use an agency employee as an intermediary. All most agency employees do now is access the file (or pull it up on the computer) and relay the pertinent information to the client, but for the most part, the clients will be able to do that themselves, reserving direct intervention with their agents to situations that cannot be easily resolved by direct inquiry.
What does this mean in the long term? No, you will not need less employees, but the employees you have will be able to manage a far greater book of business as many transactions that require their intervention today will be self-managed within a few years. This is not bad news. The management of larger books of business translates into greater productivity and greater profits. Of course, the marginal employees will be weeded out as common transactions are eliminated from the agency. Every service employee will have to be a self-directed trouble-shooter, better qualified than today’s CSRs, with more latitude to solve customer problems outside of the norm. The agency will no longer be a process-driven clerical-mode transaction factory. It will be the source of insurance knowledge for the general public, and it will still have to have walls and desks, brick and mortar, and human beings. That is why the future of the agency industry is not necessarily doomed. The Direct Writers are finding that they can offer a degree of convenience to clients, but those clients who have problems demand personal attention that is best offered one-on-one by qualified insurance professionals – something that the agency system has known for 200 years.
Does that mean that our fathers’ agencies will continue in operation for another generation? Not necessarily so. If you’ve been to Disney World, you will remember the Touch Screens with which reservations are made at any of the theme park’s restaurants. Touch the screen and you are facing a live service representative who helps you face-to-face. That technology is already with us today. It only needed high-speed telephone lines to permit us to do exactly the same thing with our own insurance clients. DSL and cable modem for home and small office use, T1 lines for businesses, and the advent of high-speed satellite modems will again revolutionize the web over the next few years. I expect to see face-to-face communications between insurance agencies and their customers (and suppliers) within five years, as the next phase of enhanced service and productivity in our industry.
And, as the old saying goes, “You ain’t seen nothin’ yet!!”
I agree with Bill Gates who has said that we do not yet know what the capabilities of the Internet and web will be. We are just in the Internet’s and e-commerce’s infancy and it will be a revolutionary, not evolutionary, experience in which each and every one of us must participate unless we plan to hibernate in a log cabin until our time on earth is over.