Will Technology Kill the Agent?

[Cornelius]

I was reading this article and it made me think about the life insurance industry and the new tech generation. As people get more and more tech savvy at some point life insurance could become a true commodity that can be shopped and applied for just from an app.

Yes I know there are different underwriting criteria with different carriers but I'm sure those issues can be worked around. Then again carriers can generate their own leads and then send the lead to a local contracted agent to make the sale.

I may be out to lunch but this article just had me thinking about technology and the insurance industry years down the road.

New App Wants to Make Trading Stocks as Easy as Posting Selfies | WIRED

 

[DHK]

It'll only kill the amateur agent that only gives quotes for coverage, instead of looking for problems to solve using insurance.

Also, it's only for the self-actualizing buyer that would use an app like that. Most people are totally confused about life insurance... and I like it like that.

If the agent can't provide value for the client... that agent's days are numbered.

 

[Brian Anderson]

It's well on its way already for term life, but permanent life won't go completely automated and if it did it would be terrible for the consumer. Most term life sites still make you talk on the phone to someone, but it's not a hard and fast rule any more, whether that's really good for the consumer or not.

I was wondering when somebody would attack the E*Trade model of $9.99 per trade - this scenario reminds me a bit of the Esurance commercials mocking Geico's "15 minutes could save you 15% or more..." saying they can do it in half the time.

...And that reminded me of a scene in There's Something About Mary -- "7 minute Abs" instead of "8 minute Abs"

 

[somarco]

Instant quote life insurance has been around for a while and a quote isn't worth the paper it is written on or the data bits on your phone. No doubt automation is the name of the game but consumers and carriers alike will figure out the model isn't very efficient.

And buying insurance, even GI, is not as simple as people think.

That being said, I have a couple of friends that were writing massive volume (apps, face amount, premium) years before Algore invented the internet. They started in their basement (much like Apple), placing ads in local papers then graduated to national papers such as USA Today and WSJ.

Using tombstone ads, they illustrated term life rates by face and ages then listed a phone number. They were pioneers and were able to use rates from various carriers without identifying the carrier. Within a couple of years they had a slick operation with a real office and secretary along with file cabinets full of applications, client files, etc.

This was in the day of paper apps and FedEx. They eventually graduated to an online presence, etc but wrote a lot of business (mostly term) until they made all the money they needed then closed up shop and moved to the mountains.

No estate planning, business buy-sell or any of that. Just order taking and shopping for the best rate based on a phone pre-screen for health issues.

It all depends on what you want (and need) out of life.

 

[Cornelius]

As for permanent products couldn't a company just attach a fact finder and the offer recommendations? Of course I do understand perm products are more complicated but to the purchaser it maybe just another purchase especially if recommended by a insurance counselor.

 

[rndz7]

Technology will not work without the agent. The Agent, is valuable, in conjunction with the internet. The agent can use the internet , to find information, and for processing the applications. With technology, If the buyer is shopping for price, they will get, just that." a price"....The internet shopper will buy improper coverages, because the shopper, is basically, self diagnosing their risk. The value of an agent, is the relationship combined with the agents knowledge. The fact finding questions, the agent asks the client, "other than application questions, is what separates the agent from the boiler plate internet. Think about this. Through experience, I have noticed that, a households insurance agent , seems to remain with the insured, longer than their doctor......
Agent Don, Since 1989.

 

[Cornelius]

Today we understand the value of the agent but what about 5-10-15 years from now? Next we should also consider the lack of agents (no specific data) in and entering the industry.

 

[rndz7]

Good Question. The McKinsey report has been forecasting the insurance agents demise since 1995. Certainly, the agent distribution system has changed, and direct selling is all the rave. However, the complexity of our product and service has also changed. Subsequently, our business model must change. For example, multiple Agents combining. Travel agents. They were doomed, when the internet became a distribution option. The Travel agent survived.
Their office location is now in a retail mall. The distribution system includes the internet as a purchasing option. The travel agent provides, different and more high end products and services. Example, Medical vacations. I suggest we read the above mentioned report, in order to benefit from any suggestions.

 

[DHK]

Today we understand the value of the agent but what about 5-10-15 years from now? Next we should also consider the lack of agents (no specific data) in and entering the industry.

The more complex the products are... and the more noise being said on the internet... the more an agent is needed.

As agents are aging (average age is mid-50's) and phasing themselves out... this can create a huge opportunity for those who are properly trained to capitalize on it.

 

[AZDave]

Auto/Home agents have to constantly remarket the book, more and more. Current technology allows that more and more...rating companies. Having the ability to remarket the needy accounts quickly is key and technology raters make it happen. But.

Having to remarket accounts is a pain.

Some carriers cut the indy's out by offering lower rates by going direct, plus allow the agent to quote with a much higher rate.

I realize rate is not to be sold. Agency, coverage, level of service, and having an agent is all worth it. Today, that is forgotten often by many, and hard to refresh to many.

The question here should be: Will Direct Writers Kill the Agent.

Dave