The Connected Business of Insurance
May 24, 2018
Our 2018 Digital Agency Survey indicates that the national average for digital technology adoption among independent agencies is 44%. Given this score is exactly the same as 2017, it reveals that agencies have yet to fully embrace the opportunities that digital technology affords to service and support connected consumers in the digital age.
Technology expands your business’s communication channels – to clients and insurer partners. It effectively mobilizes your staff from their desk to your customers and prospects in the field. Digital technology also elevates your role as a trusted advisor, making you present at all moments of opportunity – anytime, anywhere. There is significant opportunity and competitive advantage to be had for agencies willing to adopt new technologies and implement digital transformation strategies.
The 5 Pillars of a Digital Agency
The Digital Agency Survey evaluates adoption of the five core capabilities of a Digital Agency, including a management system, insurer connectivity, mobility, cloud and data analytics, which work cohesively together to drive digital transformation.
Here are a few key takeaways from this year’s report:
- 97% of survey respondents use a management system
This almost ubiquitous adoption by agencies worldwide confirms that the management system is the foundation of their business operations and indispensable for their day-to-day operations. Managing separate, disparate systems is both costly and time consuming to agencies. In fact, studies show that switching between different systems can reduce staff productivity by as much as 30%. Using a single application to manage your entire business, including personal lines, commercial lines, and employee benefits, eliminates the need for multiple systems and creates standardized workflows so that your staff can be more productive and make better business decisions faster.
- 77% of survey respondents receive download directly into the management system
Some download types, such as Personal Lines, are more widely received, but overall, use of download services is strong and growing among agencies throughout North America. This strong showing reinforces the importance agencies place on digital connectivity with insurer partners. Through increased connectivity, agents have greater access to markets and automated servicing, providing instant access to the latest client information – from quotes to policy details to claims management – at a moment’s notice and when clients need it most.
- Only 45% of agencies have mobile access to management system information, and even fewer, 24% and 18% respectively, offer clients mobile apps and self-service portals
Given that more than half of all consumers first use mobile devices for anything they do online, agencies must embrace mobile technology now for both clients and staff. Today’s consumers demand anytime, anywhere service and businesses that don’t provide this risk losing their customers to alternative providers. In fact, studies show that 52% of consumers would switch providers for greater online service. Your staff also demand greater flexibility and servicing options. Giving staff remote access to information and tools within the management system empowers them to quickly respond to client and prospect service and sales requests.
- 65% of agencies host software in the cloud
Studies show that 60% of small and medium-sized businesses that experience a cyber-attack go out of business after six months, which is why 65% of agencies rely on the cloud. Hosting the applications that your agency relies on day in and day out in the cloud ensures continuous business operations and data security. By leveraging software that is always accessible and backed up by redundancies, your business is available to customers – even during a catastrophic event that historically would have completely disrupted agency operations. Additionally by eliminating the time and expense managing IT systems, more of your staff’s time can be spent selling insurance and servicing customers.
- Only 20% of survey respondents use data analytics applications
Year over year, agency use of data analytics applications to gain insights from their management system data remains virtually unchanged. Ambivalence to adopting data analytics is likely due to the misconception that it is too complex and technical for agencies to manage on their own. However, data analytics solutions have rapidly advanced and are extremely accessible to any business regardless of size, revenue and/or IT resources. Agencies need to gather, process and get insights from data in real time across the entire business. Making the shift from being a data-generating organization to one that is data-powered gives agencies a competitive edge through enhanced decision making, insight discovery and process optimization. Studies also show that information-centric organizations realize 20% more profit than their competitors.
Why Becoming a Digital Agency Matters
While the independent insurance agency channel has progressed in its adoption of technology, this year’s results indicate that there is still considerable opportunity for agencies to digitally transform their business to provide complete connectivity to staff, insurers and insureds. When you think about the core promise of insurance — to safeguard and protect what matters most in people’s lives — it is vital to use digital technology to ensure your agency will be there when your customers need you most.
For more industry insights and to learn how technology can help your business grow in the digital age of insurance, download the complete Applied Digital Agency Annual Report.
Reid French, Chief Executive Officer at Applied Systems, is responsible for the company’s overall business strategy and operational execution. He also plays a prominent role in developing and fostering relationships throughout the Applied community. French came to Applied in 2011, after serving as chief operating officer at Intergraph Corporation, a global company at the forefront of geospatial and computer-aided design software. Early in his career, he was a strategic planner for the Walt Disney Company, and he managed investment banking transactions in the technology sector for Robinson-Humphrey. French holds a bachelor’s degree in Economics from Davidson College and a master’s in Business Administration from the Harvard Business School. He sits on the board of directors for Applied, Autodesk (NASDAQ: ADSK) and The Lovett School in Atlanta.