Opportunities Abound for Pioneering Agency Leaders in the Digital Insurance Era

With the right recipe for success, pioneering leaders of independent insurance agencies have incredible potential to substantially outpace competitors during this era of digital transformation. As new technologies present promising solutions to agency and brokerage needs, decision-makers should understand the possible outcomes of their actions.

This once-in-a-lifetime opportunity can be welcomed by those who recognize, embrace, and execute on clear visionary leadership, organizational strategic intent, and a focused implementation of technologies that produce superior results amongst competitors.

As evidenced by consistent record-breaking activity throughout our industry, an unprecedented amount of trapped value lies waiting for innovators that are willing to blaze a trail on the digital frontier. 

Be a Trailblazer

After decades of calm predictability and incremental change, today’s leaders are faced with the complex challenges of transitioning legacy-loaded organizations. Professionals have watched InsurTech trends unfold with many choosing to take a prudent ‘wait-and-see’ approach before plotting a course. While implementing too hastily has its own risks, it’s important to recognize that the time is now for agents and organizations to embrace new ways of thinking - or risk being left behind. In fact, being an early adopter can give your firm a competitive advantage that has lasting impact for decades to come.

As you pivot your organization to be future-minded, consider the rate and pace of change happening as platforms and ecosystems mature. Seven of the ten largest companies by market capitalization are ecosystem players and experts predict that within 5 years, ecosystems will account for over 30 percent of global revenues. Recognizing how these new market networks and cross-industry partnerships will change the nature of risk, realign global markets, and integrate previously distinct sectors within the economy can help your team identify huge opportunities and take action.

Turbulence Begets Opportunity

Turbulent times often present a tremendous opportunity for visionary leaders with a clear message. Here are some points to keep in mind as you navigate:

• Culture attracts talent. Effective leaders are keenly aware of their company’s culture and its important role in attracting, developing, and retaining the next generation of insurance talent.
• Shed yesterday’s problems. During times of change, leaders should enact a systematic abandonment process to areas of the business that hold back or delay growth.
• Manage for tomorrow. Embracing a future-focused mindset will give you a paradigm to make sound decisions that endure.
• Measure and analyze focused KPIs. What you define as a metric and how you measure it is critical to the success of any team.
• Match resources with results. Pairing proven, disciplined efforts with the resources needed is as important as starving problematic, unproductive efforts. Take calculated risks and be prepared to reward positive results with more resources -- but also be ready to fail fast, reflect, and get back to iterating.

To start, teams can work through probing questions such as:

• What changed during prior transitions in the insurance industry?
• How will we react to the current and future market changes?
• Are there patterns or trends to study and learn from recent changes in other industries?
• What is the best course of action given our risk tolerance?
• What does success mean and what can we anticipate on the other side?
• How can we build habits that recognize and combat complacency?

Historically, a large part of customer acquisition has been intent-driven by those actively looking for a policy. These are prospective customers knocking on our doors because they’re actively looking for a policy. Leaders who embrace these new ways of thinking, however, are beginning to find new opportunity-driven acquisition strategies where insurance is ready and waiting for prospective clients. Teams considering the independent channel should consider novel partnerships with non-traditional players where an insurance sale could add value or support your partner to reduce friction within their own process.

An understanding of how agencies rely on technology for their distribution is crucial in forming a plan.

Four core functions of agency technology:

1. Forms - A primary responsibility of agents is data collection, retention, and exchange. Forms - paper or digital - are the building blocks of your database. They play a key role in the capture and reproduction of that data in a structured, standardized manner.
2. Conversion - Disparate types and sources of data need to be translated into the format acceptable to your organization. AL3, XML, CSV, APIs, etc. are all useless if you can’t convert into something useful and usable.
3. Verification - Agents regularly make risk and coverage representations that rely on the integrity of their data as their source of truth.
4. Integration - Business relationships will increasingly morph repeatable functions and processes into digital partnerships driven by integrated systems.

Execute on Strategic Intent

Globally, teams like yours across our industry are forming strategies around their adoption of technology. These plans are constantly evolving as both startups and Goliath companies alike work to gain or maintain market share in a climate of record high capital investment, peak M&A activity, and still looming workforce changes. As a result of acute stress factors, agency teams are feeling pressure to decide their primary course of action: fight, flight, or freeze.

Here are a few probing questions that can help guide your team as you prepare to discuss, decide, and deliver on your primary course of action:

• Who is invited to participate in these planning meetings?
• Who could be added to these discussions to present a valuable perspective?
• What are the short and long term potential outcomes of the decisions we are making?
• Is there alignment among our business units, team, and partners?
• How will our clients be impacted?
• Are our carriers supportive of our decisions and willing to put their efforts behind us?

For many agents nearing the end of their career without a succession plan, the enticement of merger or acquisition options grow by the day as the arc of many in our industry seems to be bending towards consolidation.

Agents with a ‘fight’ mentality interested in blazing a trail can take precautionary measures to avoid adverse outcomes. In his book, Principles, Ray Dalio explains, “People who achieve success and drive progress deeply understand the cause-effect relationships that govern reality and have principles for using them to get what they want.” 

This framework for success can help your team develop its own principles to achieve individual and organizational goals. By taking a step back now and pausing to reflect at regular milestones, you’ll be better equipped in assessing, planning, and reflecting on your strategic intent as a company.

As digitization changes our industry, those with an eager pioneering mindset who embrace progress can see that in many cases, survival of the fittest is often attributed not to those who have been around the longest, but those who are most responsive and adapt to change. Certainly, this transition poses daunting challenges and threats -- but for those who execute on clear visionary leadership and a focused implementation of technologies that produce superior results amongst competitors, the digital insurance frontier will undoubtedly produce many success stories. ?