Avoid the fate of the dodo
In this month's issue of Insurance Business America (Issue 4.12), ANE CEO John K. Tiene discusses how technology is changing everything for agents, but they underestimate just how much.
Insurance agents should heed the lesson of the dodo bird. Most notable for its sudden extinction some 300 years ago, the flightless dodo has no natural predators until humans colonized its native island, Mauritius. The clumsy birds were easy to catch and defenseless against the island's new population of cats, rats and monkeys. The demise of the dodo was swift. In just 75 years, the bird ceased to exist.
Agents stuck in the olds ways of doing business may face a future as dire as the dodo. Most agents understand that technology is changing, but they underestimate how dramatically technology is impacting the relationships they have with their clients.
Consumer expectations are evolving. Clients still want a relationship with their agent, but the nature of that relationship is very different than it was just a few years ago. From my vantage point, insurance agents are not changing fast enough to keep up, and the clock is ticking.
Agencies still look a lot like they did 20 years ago: people sitting at desks in front of computers, using the phone as the primary way to contact customers, all between the hours of 8:30 a.m. and 5 p.m., Monday through Friday. In the next 10 years, successful insurance offices will look dramatically different. A physical office may not even exist because portals and cloud-based computing will enable clients to do many transactions themselves - faster, more efficiently and, most important, when it's convenient.
Consider the new client. At the beginning of the relationship, you have a lot of personal interaction. You're counseling them, explaining coverage options, building a relationship. Eventually you sell them a policy. At this point, a lot of agents would send a paper policy. But today's clients don't want a stack of paper. They expect a portal connected to an app on their phone, laptop or tablet where they can access all the information they need: policies, ID cards, driver information and so on. Using the portal, they can also chat with agents and download forms.
The connected consumer of today is already using technology to buy their groceries, clothes, utilities and financial services. Companies like Amazon, Google and Charles Schwab are leading the way, defining what convenience and efficiency looks like in the minds of our clients. For example, Charles Schwab customers can interact with a financial advisor in person or via text, email or phone.
At some point, consumers are going to ask themselves, "How come I can't do insurance this way?" If agents don't embrace technology to offer a multi-channel approach with the convenience and ease of use that clients expect, they will no longer be relevant. Their clients are going to migrate to new insurance channels, and it won't be easy to get them back.
It's not just about retaining clients; it's about attracting new clients, too. Disruptors in the insurance marketplace are even further along in terms of technology adoption and integration, and they're threatening the traditional distribution insurance model. Lemonade, for example, is a new peer-to-peer insurtech startup that promises customers instantaneous homeowner's and renter's insurance quotes with a simple swipe of their smartphone. A feature called "switching" allows users to cancel policies, obtain a refund and buy a new policy with the click of a button. Within the first 48 hours of launching in New York, the company had 142 policies and thousands of dollars in premiums. No agents involved. There are hundreds of these disruptors looking to build a better mousetrap.
Independent insurance agents have a tremendous advantage in the marketplace - existing relationships with clients, the ability to provide consultative advice and a tradition of serving their communities. A well trained, knowledgeable insurance professional will always be successful because clients still want the counsel and support that only a real live professional can provide. However, the nature of that relationship must change for that agent to survive. Today's tech-savvy clients want to be able to do things seamlessly without making a phone call. They don't need advice and consultation to manage billing or get an ID card.
This kind of change is not easy, but it is essential. Agents resistant to change will be viewed as slow and old-fashioned. Their clients will move to an insurance platform that fits their lifestyle demands. Before long, these agents may find themselves out of business and, as the saying goes, "as dead as the dodo."
See the full publication here.
ANE Adds First Independent Board Member Neal Stanley, Raymond Pavese Elected Chairman of Board
ANE, Agency Network Exchange LLC, announced that it has added Neal Stanley as the first independent member of the ANE Board of Directors. ANE has also elected Raymond Pavese as Chairman of the Board.
"Neal Stanley, who adds greater depth and expertise to our Board as we pursue new strategic directions that add value for our agency members and their clients," said John Tiene, CEO, ANE. " As Chairman of the Board, Ray Pavese continues his commitment to ANE that started when he helped to found the company seven years ago."
"ANE is one of the most innovative models for agents," said Neal Stanley - recently elected to the ANE Board of Directors. "I'm very pleased to continue my involvement with independent agents working with ANE."
Stanley has more than 30 years of experience in the management and direction of insurance companies and agencies. He recently retired as Chief Operating Officer for United Valley Insurance Services, Inc., an agency cluster in California. He joined United Valley in 2002 as executive vice president to manage its Retail Agency and to lead the Agency Acquisition Program. Stanley has served on the Board of Directors of various industry organizations and is an active member of the State Bar of California.
"It's a privilege to serve ANE in this new role," said Pavese. "Our industry is changing quickly and in dynamic ways. ANE is committed to helping independent insurance agents remain independent."
A founder of ANE, Pavese began his career at the Prudential Life Insurance Company after graduating from Roger Williams University in 1986. Within a year, he joined his father at the Pavese-McCormick Insurance Agency in New Jersey, where he expanded the agency footprint from Middlesex County to thousands of clients throughout the state. He bought the agency with Michael McCormick from their fathers, and today it is one of the largest in central New Jersey with clients across the Mid-Atlantic region. He is the past president of the Middlesex County Independent Insurance Agents, Exchange Club of New Brunswick, the Brunswick Bank and Trust Advisory Board, and the Executive's Association of New Jersey, one of the oldest and most prestigious networking organizations in the state.
ANE has grown from just seven members on 2009 to more than 45 independent insurance agencies with over $150 million in controlled premiums. In 2014, ANE announced plans to expand into Pennsylvania and other mid-Atlantic states. In the last three years, ANE has helped its members write more than $75 million in organic new business. The network paid more than $1.8 million in profit sharing to members last year.
Staying Relevant in the Age of the Customer
ANE CEO John K. Tiene's featured article in this week's edition of Insurance Journal.
Laptops, smartphones and tablets are giving consumers the power to make buying decisions from anywhere, and at any moment of their choosing.
“We’ve entered this new age — the age of the customer,” said Ellen Carney, principal analyst, Forrester Research at the ANE, Agency Network Exchange annual conference in April. “Digital has moved that power shift into the hands of customers.”
Forrester predicts 2.4 billion smartphone users and another 651 million tablet users by the end of 2017. The pervasiveness of these devices has changed consumer expectations: insurance agents need to provide their clients with the tools they want to interact with the agency. Agencies must have a robust mobile-friendly website, a mobile app, client portal and provide a location-specific experience.
Agents must rethink how they use technology to improve, differentiate from competitors and make data work for them.
At the ANE conference, I asked several industry executives and ANE member agents for their thoughts on how agents can stay relevant in the age of the customer:
- Matt Kirk, senior vice president, The Hartford: “Your clients are going to need advice and counsel about the products they are buying. They expect you to take care of their needs. That doesn’t change. What is their expectation of that engagement? How will you communicate with them? The way they are engaged is going to change, and it will change rapidly.”
- Gary Capone, vice president, Franklin Mutual Insurance Co.: “People still want to do business with an independent agent. Millennials are not just looking to buy online. They want professional advice. You have to listen to the customer, give them what they want, the way they want it, be very flexible and use many channels.”
- Bob Redden, vice president, Selective Insurance Companies: “The challenge is where to start. Everyone has limited resources. Where do you get the best return? Moving forward, a focus on an omni-channel experience for the customer becomes even more critical. You may have customers who prefer to interact by phone, some by web or text. One way to be relevant is to let them know their options.”
- Ellen Carney, principal analyst, Forrester: “A lot of organizations are available to help independent agents. You can have the same advantage as the most technically sophisticated agency. Someone else can manage the infrastructure, make sure the experience is fast, easy to navigate, and meets expectations in terms of mobile, social and whatever the next digital touchpoint could be. Technology is a lot different than it was in the 1990s when you had to build it yourself. Now there’s someone else who will build it and by the end of the day, you are up and running.”
- Freddie Marin, ANE agent, Your Insurance Solutions: “I was afraid that physical agencies were no longer relevant. Everybody is addicted to cellphones and 80 percent are doing research online, but they are looking for agents. You have to learn to interact in a new way through technology, but still provide the personal touch that a digital device can’t provide.”
- Doug Mohr, vice president, Vertafore: “It’s those little touches. I get the Starbuck’s card on my birthday, a note when it’s time for renewal. I think of my agent first before I think of the company. It’s because my agent has that personal touch.”
- George Reese, agent, Henry Young Insurance Agency: “We are in a changing world and the pace of change is accelerating. We need to be open to everybody in all the various ways they want to communicate, and be responsive to that.”
Forrester Analyst Says Insurance Agents Must Embrace Digital Technologies to Stay Relevant at 2016 ANE Conference
At the Agency Network Exchange Annual Conference this week, Forrester Principal Analyst Ellen Carney told independent insurance agents they must exploit digital technologies that create value and increase operational agility to stay relevant in the face of new competition from digital "disruptors" that are changing the way insurance is sold and serviced.
In Carney's keynote, "The Agent in the Age of the Customer: The Customer-Driven Changes that are Remaking Insurance," she outlined four market imperatives for independent agents:
- Turn big data into business insights
- Transform the customer experience
- Embrace the mobile mind shift
- Accelerate your digital business
"Agents who want to succeed must change how they do business by embracing the digital technologies today's consumers are looking to utilize," said John Tiene, CEO, ANE.
"Change is never easy, but it is essential and necessary to keep clients from migrating away from independent agents. ANE is helping our agents succeed by giving them the tools they need to transform their businesses."
Last year, ANE announced an agreement to make Vertafore the exclusive provider of agency management technology solutions for ANE members. ANE agencies receive preferred support and pricing for the Vertafore Agency Platform -- comprehensive software that helps agents easily and economically grow new business, retain clients, maximize profitability and manage business lines.
The ANE conference was attended by more than 160 independent agents and other insurance professionals from New Jersey, Pennsylvania and Delaware. The event featured six break-out sessions for agency owners, producers, account managers and CSRs. Carney also participated in a panel with executives from The Hartford, Selective Insurance Company and Vertafore to discuss "What Agents Need to do to Stay Relevant."
ANE's LinkedIn Tips For Insurance Professionals
Many insurance professionals are curious about how to market themselves, and their agency, on LinkedIn. Does it actually work? Is it an effective tool?
As we are sure you have heard, being digitally current is imperative to increase the quality of your customers' experience. But few people realize that you and your agency are being digitally vetted before you even make initial contact.
It has become more common for clients to look to the web first before making a decision on who to call for help or advice with their insurance needs. So, why shouldn't you be the first person they check out? Your website may not come up first in a search engine, but a solid LinkedIn profile will certainly help your agency be a front-runner when it comes to getting the first call. LinkedIn has become the largest professional network and one of the first places potential clients go to.
So, here's how to get started.
First, think of your LinkedIn profile as your resume and digital first impression. LinkedIn makes it incredibly easy to fill in your information step-by-step.
- Put your full name as it would appear on your business card. No nicknames, no silly job titles like "insurance messiah".
- CURRENT, professional picture. No future client wants to see what you looked like twenty years ago or what your dog looks like. You don't need to hire a professional photographer either. The site makes it easy to snap a photo and upload. Ask a coworker to take a photo for you and return the favor. You can even turn making your profiles into a team project, because nothing says teamwork like social media!
- Add your location and industry for easier searches and visibility.
- Use descriptions that will attract the particular clientele your agency is looking for. Does your agency only sell home and auto insurance? Or do you specialize in general contractors? Make sure to use those as keywords in your profile's heading description.
- Use your agency branding as a background image. Company logos and street view photos of your office make great background images. Now your future client will know what to look for when passing by your agency!
- Highlight your skills, accomplishments and professional memberships in your summary. Before writing, think to yourself - what do you find most captivating about your professional life?
- Always include a link to your agency's website. Not only does this add credibility to your profile, it increases your search engine optimization.
The more time you spend into making your profile the best it can be, the more time prospective clients will spend looking at it. Best part is, do it well the first time and all you'll need to do are minor updates in the future.
Remember! LinkedIn is a PROFESSIONAL networking site. This is not the place to post your every thought and action. If you wouldn't say it in front of a client, save it for your personal Facebook or Twitter account.
Second, once you have completed every nook and cranny of your profile, you are ready to get started networking with future prospects. Post meaningful, useful and intriguing content out there for everyone to see. Share other peoples' work, but include your insight. You will be surprised how many other people are thinking the same thing or have the same questions. Do not bash other peoples' opinions, but use this as a forum for thoughtful debate.
Third, join groups related to your specialty to share insight on insurance issues that the group members might care about. You never know who will be willing to give you a referral. Love antique cars and your agency happens to sell collector car insurance? LinkedIn has a group for that - the possibilities are endless!
Fourth, are you extremely knowledgeable in a particular area of insurance? Write about it! LinkedIn has a fantastic publisher tool that allows you to publish your own articles and put your profile in front of thousands of potential clients. If your agency website has a blog, you already have content waiting to be published.
These are just some of the basics of getting started with your LinkedIn marketing, but having a completed, well-thought our profile adds a professional edge to your agency that has become necessary in our digital world.
To learn more about optimizing your LinkedIn profile, join us on April 7th at the Renaissance Woodbridge Hotel for our Annual Conference. Register today at https://aneconference2016.eventbrite.com
Insurance Information Institute President Addresses ANE Members
At ANE's Annual Conference in April, Dr. Robert P. Hartwig, CPCU, President of the Insurance Information Institute addressed the conference on the state of the industry.
Dr. Hartwig discussed the state of the industry and what it means for the independent insurance agent today, as well as privately sat down with us to explain industry trends.
What are the biggest issues facing insurance agents?
The largest issue is our industry's increase in distribution channels which causes more competition for the independent agent. Direct channel competition with aggregator sites, such as Google, also provide more outlets for consumers to shop around. Hartwig does describe that individuals are more willing to work with agents if they communicate with their clients the way they want to be communicated with. This meaning agents need to expand their communication repertoire through technology and social media.
Advantage of joining a network?
Networks, such as ANE, expand the depth of an agency's capacity without an income loss. Independent agents who join a network can satisfy a larger range of clients they normally would not be able to on their own.
Watch Dr. Hartwig's full interview on our YouTube Channel!
Learn What Big Broker Mergers Mean for Independent Agents
On Wednesday, July 8th, Insurance Business America published 'Big broker mergers: What they mean for smaller independents' featuring ANE CEO John K. Tiene. Find out how smaller agencies can still stay competitive.
Merger and acquisition activity among major international brokers –such as last week’s $18 billion merger deal between Willis Group and professional services firm Towers Watson – should send an important message to smaller independent agencies on how to survive in an environment of heavy consolidation, says one industry leader.
According to John Tiene – chief executive with the East Coast-based Agency Network Exchange – banding together through networks and alliances is the best approach for independents hoping to compete with broker operations that are growing increasingly larger.
“The Willises of the world are only going to get bigger and continue to crowd out mid-sized agencies that have historically made up the bulk of the market,” Tiene told Insurance Business America. “That really just reinforces the need for insurance agents to start thinking about joining an organization that gives them some of the similar scale and access that Willis and others have.”
The Willis/Towers Watson deal is certainly massive, valued at $18 billion and expected to bring in annual revenues of $8.2 billion. Particularly key to the transaction is the access to data analytics Willis will gain from Towers Watson, aiding the brokerage in richer consumer insights, risk management solutions and product development.
That only underscores the importance of developing technology for smaller and mid-sized agencies – again something that can be accomplished through agency networks, says Tiene.
“The analytics piece is very important – independent agents have to be as tech savvy and proficient as the bank, the investment house and the corner drugstore,” he said. “Commercial clients especially are now wanting to get insurance online, and agencies have got to get with it and start doing business in different ways.”
Agency Network Exchange recently announced an exclusive deal with Vertafore to provide members with agency management software that includes some of those business analytics solutions. Other technology providers have launched similar tools to help agencies compete with larger brokerages and carriers.
Such capabilities – including the greater market access afforded by membership in a network or alliance – will only grow in importance as 2015 shapes up to be one of the biggest years for insurance consolidation in recent memory.
With the right tools, however, Tiene sees this trend eventually favoring smaller independents.
“The challenge with the bigger, conglomerate brokers is that they haven’t taken time to become efficient organizations,” he said. “Many of their clients feel lost within the labyrinth of a mega broker, and that affords a great opportunity for smaller agencies to take their business by being nimble and providing the kind of service clients want, with the access and influence of a larger organization.”
View the full article in Insurance Business America here