Will InsurTech Really Replace Insurance Agents?
Will technology replace insurance agents? This is a question that weighs heavy on agents that have built up a lifetime of industry expertise. It’s true that the insurance industry is poised for disruption. After all, it’s an industry that dates back hundreds of years (if not more) and that’s currently lagging behind banking and financial services in its adoption of automation technology.
But will technology replace insurance agents completely? It’s unlikely, and here’s why.
Insurance is People Oriented
Insurance is a people-oriented industry. While it’s true that you can purchase insurance online without ever interacting with a human, most people realize that they need a human element when it comes to protecting their greatest assets.
It’s not easy to navigate all the types of policies there are for all forms of insurance, let alone handling claims, account administration, and being able to recommend relevant riders or policies. In fact, 25% of business leaders report that they struggle to understand their coverage needs, and 19% find it hard to get insurance tailored to their specific sector.
Consumers don’t want insurance agents to be replaced by technology. Millennials, the current largest group of adults in the US, are the generation most expected to increase demand for InsurTech, and yet 23-25% of millennials still prefer the independent agent for insurance needs compared to other channels. And of those who used an agent, 81% of millennials plan to use them again.
So where does InsurTech fit in?
A Hybrid Future
When it comes to how InsurTech is reshaping insurance, the future is a happy blend of technology and agents. Consumers don’t want technology to replace the human element in insurance, but they do value digital efficiency and so should insurance agents: in fact, automation can reduce the cost of claims by as much as 30%.
While InsurTech, in its most complete form, would move all aspects of the insurance industry online with direct-to-consumer technology, the reality is the consumers want an insurance agent to guide them in choosing policies, to walk them through claims, and to use their industry expertise to protect everything from their homes to their income.
One of the main barriers to InsurTech fully replacing insurance agents is privacy. There’s no getting around it: privacy has become one of the top consumer concerns in recent years and a staggering 79% of Americans have concerns about how companies are using their data. Considering that InsurTech would essentially digitize all of your most sensitive information, it’s hard to picture a world in which technology fully replaces insurance agents.
So, Will Technology Replace Insurance Agents?
It’s clear that InsurTech holds promise, for both consumers and insurance agents. But it’s nowhere near ready to replace insurance agents, and likely will never be. But it’s important to keep an eye on how InsurTech is reshaping insurance so that insurance agents can keep up with what consumers want and need.
Finding ways to streamline the insurance process through technology is important, and in terms of how InsurTech is reshaping insurance, this has proven to be effective in the quoting process, policy administration, lead generation and conversion, and throughout the claims process.
InsurTech has a long way to go before it could replace insurance agents, and it’s not clear that it ever will. People have always chosen to delegate complex tasks to specialists, and insurance is (and will always be) no exception. InsurTech’s greatest impact on insurance agents may just by freeing up their time from manual tasks to focus on what’s most important: growing their book of business and retaining clients.