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The agent of the future EY survey reveals the need for digital sales tools and closer collaboration with insurance carriers
The agent of the futureEY survey reveals the need for digital sales tools and closer collaboration with insurance carriers
ii | The agent of the future
The agent of the future is emerging as a proactive advisor in a digital world.
ContentsExecutive summary
Key theme 1 — The threat of direct-to-consumer and digital business models is driving insurance agents’ desire to use digital and social sales tools
Key theme 2 — Agents expect carriers to enable simple customer and agent experiences, which in turn will drive agent loyalty
Key theme 3 — The agent of the future is looking for innovative, customized products to meet changing market and customer demands
Key theme 4 — Agents see close collaboration with carriers (more access to underwriters, less servicing by agents) as driving future growth
Conclusion
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About the surveyEY conducted a digital survey of 530 insurance agents in the later part of 2016. Topics included the future of agents, digital ambitions, assessment and perceived value of carriers and desired products. The findings focus on trends and differences in the United States.
530 responsesSurvey respondents included:
Property and casualty
Small commercial
Life15%
27%
55%
Note: Figures throughout this report have been rounded to the closest 100%.
2 | The agent of the future
3The agent of the future |
L ess paperw ork, b etter sales tools and greater simplicity in processes from carriers w ill enab le agents to b e more responsive to customer servicing, claims and product development. E merging technologies such as digital, w earab les, telematics and usage- b ased insurance ( U B I ) are providing data sources for underw riting and analy tical capab ilities to b etter manipulate and interpret data. These are improving the way insurance companies manage back-office functions and detect cy b er threats and other risks. The future is tied to innovation and product simplification, which represents bold cross-selling opportunities for carriers.
E Y recently survey ed 5 30 P & C and life insurance agents to b etter understand trends, grow th strategies and w ay s in w hich engagement rules have changed. They w ere asked ab out carrier selection, support and perceived value, as w ell as future grow th engines and how they see their role as agents evolving in three to five years.
The direct channel has a maj or impact on the distrib ution landscape, as customers b ecome the focal point for every transaction and sale. M ore agents consider the market shift tow ard online or direct sales a maj or constraint in the grow th of their b usiness. This concern is ex pressed b y life insurance and property and casualty ( P & C ) agents across the b oard — w hether selling commercial or personal lines.
E x ec uti v e s ummary
I n thi s rep ort, w e i d enti fy four k ey themes that emerge from our s urv ey:
The threat of direct- to-consumer and digital b usiness models is driving insurance agents’ desire to use digital and social sales tools
A gents ex pect carriers to enab le simple customer and agent ex periences, w hich in turn w ill drive agent loy alty
The agent of the future is looking for innovative, customized products to meet changing market and customer demands
A gents see close collab oration w ith carriers ( more access to underw riters, less servicing b y agents) as driving future grow th
1 2 3 4
4 | The agent of the future
Digital and analytics sales tools
Growth from new products and cross-selling
More time on sales and advice, less on servicing
Shifting from carrier rep to customer advocate
Key part of carrier’s omnichannel approach
Sharing control of customer with carrier
The agent of the future … a proactive advisor in a digital world
A s show n in F igure 1 , the agent of the future is emerging as a proactive advisor in a digital w orld. I t is characterized b y more focus on the use of digital and analy tical tools in the sales process and greater collab oration w ith the carrier to deliver enhanced customer value.
A s agent roles evolve and b ecome more relationship- b ased, they w ill need to focus more on customer- facing technology and analy tics.
E x ec uti v e s ummary
F i gure 1
M ost agents are positioning to b e part of the digital future, though some are not.
4 0 %q uestion their preparedness to meet the needs of the nex t generation.
8 0 %w ould consider giving up a role in servicing to focus on sales and grow th.
5 0 %highlight the need for new and innovative products to grow their b usiness.
5 5 %$w ould consider a low er commission to shift some servicing b urden to the carriers.
4 7 %would significantly value an app to guide them through a customer interaction and display advice or prompt for nex t b est action.
6 3%would significantly value illustration tools to help them w ith sales.
7 7 %would significantly value a piece of tech that automatically identified potential opportunities w ithin their ex isting b ook.
5The agent of the future |
1The threat of direct- to-consumer and digital b usiness models is driving insurance agents’ desire to use digital and social sales tools
Key theme
6 | The agent of the future
Agents are concerned with how they fit into the trend of more direct- to- consumer and online insurance models; how ever, they hold differing opinions on the degree of impact. W hile half of life insurers see the direct- to-consumer channel as some threat to their b usiness, 1 2 % view it as a maj or threat and 8 % consider it a full threat. P erceptions and ex pectations govern the relationships b etw een agents and carriers, as show n in F igure 2 .
15%
10%
18%
35%
32%
24%
31%
44%
40%
12%
12%
14%
8%
1%
4%
0% 20% 40% 60% 80% 100%
Life
Propertyand casualty
Smallcommercial
Extent to which the insurers' direct-to-consumer channel poses a threat to the agent's business
No threat at all Little threat Some threat A lot of threat Full threat
F i gure 2
7The agent of the future |
1Key themeKey theme
Effort spent on admin tasks
Size of investment required for analytics or automation
Recruiting and development of sales talent
Access to quality prospect and customer data
Inadequate or stagnant products
Market shift toward online or direct channels
Speed to access customer or policy data
Major constraints on the growth of carrier’s book of business
Life
Property and casualty
Small commercial
42%
46%
40%
36%24%
29%
37%
28%
28%
33%
26%
24%
29%
19%
19%
19%
20%
24%23%
15% 19%
F i gure 3
M oreover, most agents view the market shift to direct- to- consumer and online channels as the maj or constraint in the grow th of their b usiness going forw ard. I nadeq uate products, investment in analy tics, administration and automation, and speed and q uality of access to customer or policy data also are constraining grow th ( see F igure 3) .
A gent perceptions of carriersW hile carriers b egin to ex plore alternative distrib ution platforms, agents still b elieve they add value in the channel mix and w ant to b e actively engaged w ith the customer. I n fact, three- q uarters of agents view intermediated b usiness channels as important for carriers, w ith 2 2 % neutral ab out the value; only 3% fail to see the importance of these channels. O ne q uestions w hether these are agents w ho have given up on themselves.
Survey findings reveal that agents who sell commercial insurance understand the most about how they fit into their carrier’s strategy , w hile those w ho sell personal lines and life insurance understand the least. O nly 1 9 % of agents selling personal lines b elieve they understand it w ell, compared to almost 30 % of agents in all other categories. O n the life insurance side, those selling personal lines rate their understanding marginally higher than others.
of agents b el i ev e they und ers tand v ery w el l how they fit into their c arri er’ s s trategy.
2 2 %
8 | The agent of the future
1Key theme
F i gure 4
Small commercial
Property and casualty
Life
44% 53% 49%
29%22% 25%
26% 22% 17%
1% 3% 8%
Agent preference between increasing number of customers and growing wallet share
I take a balanced approach
More wallet share and fewer customers
More customers with less wallet share
Not sure
G row th is a maj or concernA dditionally , the landscape of consumers is rapidly evolving from “ traditionalists” to “ technologists. ” M ore than three- q uarters of b oomers use the internet, w hile G en X ers are estab lished in their professional w ork and are mostly married w ith homes and children. M illennials are the largest customer group in history — and a target grow th area for most industries, including insurance. A gents indicated that they need different tools and products to meet the needs of these groups to capture this grow th.
A s long as agents continue to b e engaged in the market, they look to b alance new customer acq uisition and cross- selling. H alf of all agents prefer to use a b alanced approach to increasing w allet share or numb er of customers. L ife agents remain more unsure ab out their approach or prefer to acq uire more customers, w hich is understandable given the difficulty in selling ancillary products.
9The agent of the future |
1Key theme
6 0 %
I mplicationsThe direct- to- consumer model is emerging as a primary threat to agents. I n response, agents are looking to social media to help generate leads and grow b usiness as less time is spent on servicing. They are using analy tics-guided sales tools that can b e view ed on a mob ile device. The image on the tab let is helping the sales process b y asking customers relevant q uestions ab out “ how ” and “ w hy ” they are making decisions. C arriers are also try ing to create a seamless ex perience for agents and customers b y ow ning client servicing and enab ling agents to shift from a carrier representative to a customer advocate role.
F i gure 5
of agents cite availab ility of b etter
tools affect their preference for using
certain carriers.
of agents cite availab ility of
b etter tools as a maj or reason for
sw itching carriers.
of agents w ant b etter C R M tools.
S urvey highlights:
A gents currently value b asic functionality ( e. g. , operations and sales) ; how ever, the agent of the future w ill b e concerned more w ith digital capab ilities and tools ( see F igure 5 ) . Q uality of tools play s a large factor in the decision- making process. L ife agents are less satisfied than P&C agents with the online tools that carriers provide. O ur research show s that there is an opportunity for life insurance to improve its online and mob ile capab ilities.
W hile carriers are ex pected to max imize their digital platforms and enab le smoother operations and servicing for agents, they also seek new channels such as social media to engage their customer b ase. S ocial media ranks high in importance for all agents. P ersonal life has lacked adoption compared to other lines, b ut presents opportunities to engage customers or prospects going forw ard.
C ase study A gent ex perience design and tool selection
The insurance carrier w anted to deliver a digital agent ex perience, supported b y straight-through modern distrib ution technology .
• D eveloped future agent ex perience j ourney s from recruitment, through appointment and licensing to ongoing agent management
• Identified potential technologies to support implementation of the vision and assisted in the selection of best-fitting distribution and portal technology
• D eveloped detailed implementation plan
• H elped client mob ilize agent ex perience and technology w orkstream to augment ongoing policy administration and claims sy stems modernization
• I ncreased speed to premium volume b y agent
O b j ec ti v e S erv i c es V al ue p rov i d ed
35 % 35 %
2Key theme
A gents ex pect carriers to enab le simple customer and agent ex periences, w hich in turn w ill drive agent loy alty
1 0 | The agent of the future
9 0 %
Today , 9 0 % of agents tap into multiple carriers w hen thinking of doing b usiness, w hich is forcing insurance providers to rethink their value proposition and ab ility to differentiate, as show n in F igure 6 .
P ersonal P & C agents are more likely to have two to five most-favored carriers, while those in commercial lines tend to favor one or tw o carriers for each product. O nly 1 2 % have one primary alliance carrier.
A gents consider aspects such as agent or customer ex perience w hen choosing w here to place b usinesses, though the degree to which these aspects influence these decisions varies across insurance ty pes. O f greater importance is how they rate a particular carrier. N early half of commercial and personal P & C agents consider customer and agent ex perience w hen choosing a carrier to do b usiness w ith, compared w ith 2 7 % of life agents.
26%23%26%12%13%
22%20%33%12%11%
19%21%28%20%11%
Small commercial Property and casualty Life
Captive or exclusiveI have one primary alliance carrier but can place business with other carriersI have two to five most favored carriers but can place business with othersI have one or two carriers that I favor for each productI place business with many different carriers
Carrier preference of agents
F i gure 6
of agents tap i nto mul ti p l e
c arri ers w hen d oi ng b us i nes s .
1 1
Key theme
The agent of the future |
2Key theme
C ase study
D igital ex perience strategy for a mid- sized personal lines insurance carrier
The b oard of directors realized that the company w as losing ground b ecause of a lack of a digital presence, investment and strategy .
• D eveloped digital capab ility framew ork, agreeing on different ex periences across the insurance value chain
• C onducted competitive analy sis, identify ing foundational, competitive and market- leading capab ilities for each ex perience among competitors
• F ramed digital strategy , forecasting market- leading capab ilities and scenarios
• B uilt investment model, determining high- level initiatives for each capability identified during strategy b rainstorming session; modeled alternative investment scenarios
• The client received a comprehensive digital strategy for agents, policy holders and employ ees.
• C ustomer j ourney maps w ere produced, touch-points identified and technology needs assessed. C ompetitive analy ses enab led development of a differentiation strategy .
• A technology road map w as created w ith investment req uirements and presented to the b oard of directors.
O b j ec ti v e
S erv i c esV al ue
p rov i d ed
A gents need support from carriersW hen asked w hat carriers could do to ease the operational b urden on an agency , respondents universally identified better communication, improved customer service and underw riting. C ommercial agents also cited less paperw ork and w orking w ith one underw riter in the top three, w hile life agents ranked speed to underw riting and access to underw riters as key areas for improvement.
A gents think simplicity is the key for carriers to improve the customer ex perience. A cross product ty pes, agents have different opinions of w hat carriers can do to improve their responsiveness to customer service or claims; 4 5 % w ant few er forms and less paperw ork, w hile 35 % propose simpler products and b etter customer online tools.
I mplicationsC arriers need to step up their game — improving agent tools and distrib ution management technology . These efforts w ill contrib ute to enhancing customer relationships and strengthening salesforce and service effectiveness. M ax imizing digital platforms w ill enab le smoother operations and servicing for agents.
M ore rob ust platforms and access to product-specific sales support were mentioned as maj or reasons for sw itching carriers. M ore competitive commissions, b illing and collections, and reporting w ere also cited as top criteria for the selection process. D igital onb oarding and account management tools, event management and sales lead applications w ere listed as needing improvement.
B etter sales tools, technology and analy ticsL ife agents are more focused on sy stems that support new leads and b etter underw riting, representing an opportunity for improvement. W hile 6 5 % of commercial and P & C agents rate current tools as very good or good, only 4 5 % of life agents rank them as such. The larger the agency , the higher the q uality rating.
W hile a third of respondents interact via a w eb portal, a q uarter prefer to call.
5 %prefer to connect b y tex t messaging
prefer to connect through a smartphone app
A gents also prefer to stay involved w ith carriers b y interacting directly w ith customers. This is most important for personal P & C agents w ho w ant to b e actively engaged, not j ust informed.
1 0 - 2 0 %
A gents feel constrained in their ow n ab ility to invest in infrastructure and are looking to the carrier for support. This presents b old opportunities to provide digital tools to agents.
1 2
The agent of the future is looking for innovative, customized products to meet changing market and customer demands
| The agent of the future
Key theme
3
I nnovation w ill req uire product changeA gents agree that seeking new and innovative products and increasing campaigning activity are key areas of focus in the nex t three y ears ( see F igure 7 ) .
A cross the b oard, investing in infrastructure seems to b e a low priority for grow th; less than 1 5 % of respondents plan to invest in the nex t three y ears. F uture grow th w ill come by shifting from a “one-size-fits-all” agency model to simplified products that leverage technology , analy tics and digital applications to b e more responsive to customers’ servicing needs.
P roduct innovation w ill b e a key driving factor b ehind the agent of the future’ s ex panded b asket of products. A ll agents place significant value on innovation that facilitates new b usiness. N early half of commercial agents perceive technology that automatically identifies potential opportunities w ithin their ex isting b ook
of b usiness as highly important. F rom an agency size perspective, companies w ith 2 0 0 to 5 0 0 employ ees perceive this ty pe of innovation as significantly important. Smaller agencies of few er than 1 0 agents and sole proprietorships place less value on this ty pe of innovation.
N early half of all agents cite increased product customization as key to addressing changing market needs. I n line w ith customization, 4 0 % w ould like products w ith many availab le features to meet a w ide set of needs.
The maj ority of agents b elieve that carriers could b e more innovative b y producing more simplified products that require less ex planation and b etter address the needs of millennials. O nly one- third view the needs of G en X ers and b ab y b oomers as the ty pe of product innovation that w ill help them grow their b usiness. This is in stark contrast to life agents, w here more than half are considering the needs of this target audience.
Steps to grow the business over the next three years 50%
40%41%
Increasing campaigning activity
Pursuing new relationships with carriers
Increased sales trainingSeeking new and innovative products
Investing in infrastructure
50%47%
27%
Increased product training
51%38%41%
34%51%
40%
49%54%
49%
15%15%
11%
Small commercial
Property and casualty
Life
F i gure 7
1 3The agent of the future |
Key theme 3Key theme
W earab les and new technology present opportunitiesTechnology is view ed as an important factor in addressing the needs of a new generation of agents — and adding millennials to the salesforce w ill b etter cater to that market. A s millennials continue to represent more customer market share, almost 4 0 % of agents q uestion their preparedness to meet the needs of the nex t generation.
M ore than half of commercial agents feel strongly ab out the role of w earab le technology in the future of the industry , and 4 8 % of personal P & C agents agree. P erhaps this is b ecause of their ex perience w ith
telematics, w hich most respondents cited as meaningful. L ife agents do not seem as convinced on the role of w earab les in their industry — a finding that has raised eyebrows with our team given the market activity of at least one client w ith a maj or product launch.
A sked how strongly they feel ab out usage- b ased insurance ( U B I ) , more than half of P & C agents say that it w ill play an important role in the future of insurance ( see F igure 8 ) . O ne in three personal life agents express the same level of confidence in UBI’s future role.
I mplications A lternative distrib ution models are motivating carriers to rethink their commitment to the agency sy stem. A s our survey show s, the future is tied to product innovation. C arriers can support the agent through new and customized offerings ( w earab les, connected home and telematics) . E Y ’ s P ay - A s- Y ou- L ive pub lications provide helpful supportive information. W ith grow th from new products and increased cross- selling, new skill sets w ill b e req uired for b oth agents and carriers.
F i gure 8
Perceived role of usage-based insurance in the future of the industry
Play significant role
6
5
4
3
2
Play no meaningful role
Not sure
Small commercialProperty and casualtyLife
26%29%
17%
28%27%
15%
31%26%
25%
7%9%
17%
5%5%
8%
3%5%
11%C ase study
P roduct innovation and launch for glob al insurance carrier
The insurance carrier w anted to launch a more engaging life and health customer ex perience, incorporating w earab les.
• Defined business model, including product economics, loy alty scheme and req uired partnerships
• D eveloped customer value proposition, product design and customer engagemement architecture
• A ssisted client w ith detailed product launch planning and technology integration
• H elped client make a general ex perience concept come to life in specific design
• P rovided detailed ex ecution program to achieve successful product delivery
O b j ec ti v e
S erv i c es
V al ue p rov i d ed
4A gents see close collab oration w ith carriers ( more access to underw riters, less servicing b y agents) as driving future grow th
1 4
Key theme
| The agent of the future
A gents seek closer w orking relationships w ith carriersThe maj ority of agents are open to the idea of reducing their role in servicing to focus on sales and grow th ( see F igure 9 ) . O ne in four personal life agents w ould prefer this option, ab out 2 0 % of all agents ex press skepticism, and 17% of commercial agents are satisfied
w ith their current servicing role. H alf of respondents w ould b e w illing to accept reduced commissions in ex change for shifting some of their servicing b urden to carriers, though 36 % are opposed to this idea.
A gents w ant to b e more involved in the underw riting process. They agree that carriers could improve underw riting interaction b y allow ing more access to underw riters, enab ling agents to w ork w ith the same underw riters, and shifting underw riters’ transactional role to a relationship- focused engineer of customer solutions. M ore than one- third of agents w ant to formalize or improve the process for appealing or review ing an underw riting decision.
M oreover, agents b elieve that carriers could improve customer communication b y simplify ing language, b eing more proactive and leveraging diverse channels to reach customers. O verall, freq uency and numb er of communications is of less importance to agents. M ore than one in three in personal P & C or commercial insurance view s this option as important to effective communication, compared w ith one in four in personal life.
12%
12%
17%
43%
63%
54%
25%
15%
22%
11%
4%
4%
9%
6%
3%
0% 20% 40% 60% 80% 100%
Life
Propertyand casualty
Small commercial
Give up part of agent’s role in servicing to free up more time for sales and growth
No Yes, would consider Yes, would preferYes, this must be available in the future Not sure
F i gure 9
1 5
Key theme
The agent of the future |
4Key theme
A cross all product ty pes, nearly half of agents view increased customization as one of the main product changes to address the market’ s future needs; this is especially important for those in commercial and personal P & C . I n line w ith customization, 4 0 % of agents view the ab ility to provide many availab le features to address a w ide set of needs as key to meeting evolving market demand.
I mproving the agent ex perienceS trengthening current customer relationships and achieving customer centricity in core operations have b ecome strategic imperatives. A s consumers emb race digital and other emerging technologies, insurers must rethink their distrib ution strategies, agency interactions and partner relationships.
C ase study
A gent ex perience transformation for a leading personal lines insurance provider
C arrier w anted to define the next generation of its digital agent ex perience.
• V alidated and enhanced ex isting user personas and future state user ex periences to determine desired feature functionality
• Documented and identified ways to effectively measure agent sentiment and b uild an effective agent and user feedb ack loop to track user satisfaction
• D eveloped a capab ilities matrix and vendor evaluation framew ork to support the review of availab le market solutions
• Defined a future-state technology architecture ( w ith the desired integration and solution components)
• E nhanced personas and future state experiences: identified ex perience maps for vendor evaluation
• A gent satisfaction measures: identified existing agent experience metrics, gaps and customer K P I s; developed a scorecard
• V endor evaluation framew ork: created evaluation criteria and sy nthesized client assessments
• Identified activities needed to transition to desired state across a timeline
O b j ec ti v e
S erv i c esV al ue
p rov i d ed
3 4%w ant the c arri er to hav e b etter c ommuni c ati on w i th the agent or b rok er.
I mplicationsC arriers and agents w ill w ork together to make the customer ex perience seamless, reliab le and easily accessib le. O ur survey reveals that tension ex ists b etw een agents’ desire to have more direct contact w ith carriers and the need to streamline underw riting. This calls for some form of digital interaction b etw een agents and underw riters rather than w asting time on the telephone. I f agents can focus less on servicing, they can focus more on selling. R ecruiting, training and retaining agents is essential to deliver enhanced customer value.
C onc l us i onE Y can w ork together w ith carriers to help implement potential strategies that digitally support their agents, simplify distrib ution operations, deploy advanced analy tics and help implement new distrib ution technology ( see F igure 1 0 ) . L istening to the “ voice of the agent” can help carriers provide a deeper, more rob ust ex perience and support them to rethink their commitment to the agency sy stem.
A collab orative process w ill allow carriers and agents to interact and strengthen their relationship. Benefits that accrue include reducing operational complex ity and costs, improving sales productivity and supporting the agent and policy holder ex perience. O ur survey supports the concept that insurers and the agent of the future w ill b e stronger b y w orking together.
Improve agent
experience
Simplifydistributionoperations
Deployadvanced
distributionanalytics
Implementnew
distributiontechnology
Design next-
generationagent portal
Build agent advice
and sales tools
Potential strategies
Build agent loyalty and “wallet share”
Improve sales productivity
Reduce distribution operations complexity
and cost
Support policyholder experience
improvements
Distribution results
F i gure 1 0
O ur survey supports a numb er of carrier strategies that help improve distrib ution results.
1 6 | The agent of the future
1 7The agent of the future |
F or more information or to schedule a briefing, please reach out to the E Y I nsurance C ustomer & G row th team:
B ernhard Kl ei n W as s i nkI nsurance C ustomer & G row th L eaderE rnst & Y oung L L P+ 1 2 1 2 7 7 3 4 6 34b ernhard. kleinw assink@ ey . com
M el ani e H end ers onD istrib ution L eaderE rnst & Y oung L L P+ 1 2 1 2 7 7 3 1 8 5 7melanie. henderson@ ey . com
M ark H op k i nsI nnovation & G row th L eaderE rnst & Y oung L L P+ 1 2 1 5 4 4 8 5 7 6 5mark. hopkins@ ey . com
D av i d B as s iG row th A naly tics L eaderE rnst & Y oung L L P+ 1 6 1 7 5 6 5 0 1 4 1david. b assi@ ey . com
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