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Changing face of Insurance Agency

Added: 21/07/2017

The face of Agency channel in Insurance Industry is changing rapidly world wide. In fact not just agency, the whole Insurance distribution ball game across channels are changing rapidly. More so in the emerging markets.

I remember vividly way back in 2000 when i started my career in Insurance Industry as an Agency Sales Manager in India, my main focus at that time was to prospect for that eager, hardworking and enterprising individual who would join my team as an Agent and Advisor to “Sell Insurance” to customers who did not have an inclination of what Insurable risks were all about. Those days life used to be simple, prospect..prospect..and more prospect till you close a proposal and process the transaction. We created a team of 20 individuals, worked hard and partied harder..achieved our targets and went home. The competition was negligible(majorly from Government owned LIC) and there was ample scope to shine.

Cut forward to 2015..what we see across economies and especially frontier markets and not just India that continued environmental, operational, and technological changes have led to the development of multiple distribution channels in the insurance industry, shrinking traditional Agency channel . The days of good old friendly neighborhood agent seems to be coming to an end!!

With competition in insurance markets across the globe intensifying, cost savings and customer retention has become critical. Forcing insurers to look for ways to drive sales and customer convenience while keeping costs low and maintaining profitability. These factors are leading to the emergence of additional channels such as Call centers, Bancassurance, Mobile and Web Aggregators etc. All intensifying competition both within and in the market place.

But most importantly the face of the customer has changed rapidly in the last decade. Those days are gone when a customer used to buy insurance to typically save some tax and accumulate tax free funds to mitigate a life event or just insure his car with a 3rd party protection.Now a days the customer is firmly on the driver’s seat when it comes to their choice and purchase of goods and services. We are no longer in an analogue world; it is a digital one that has exploded with endless information and communication in milliseconds. Today’s customers expect their Insurance to be tailored to their needs, demands better service and experience and expects solutions to their queries to be rapidly delivered. Even Insurance contracts has been de-materialized (Demat) and can be accessed online in India.

All these complex changes has resulted in leaving the average untrained agent baffled and overwhelmed, subsequently closing the door to a promising career in Insurance for some. Earlier an average agent while trying to “close” a proposal had to deal with the Accountant or a learned family member of the prospect as obstacles to closing a case. But now a days there is Whats App, Messenger, Hike and what not to deal with!! Apart from other competitors.

So how does an Insurance Advisor not only survive but thrive in these conditions.

My take is as follows :

  • Embrace Technology: Let’s face it, people who were born later 1985 or so called “Millennial” are tech savvy and they constitute nearly half of World Working Population currently. To deal with them and advise them on financial matters including Insurance solutions one has to be comfortable with technology in the first place. Various reports suggest that usage of tablet based sales solutions are on the rise and we expect to see many companies, advisors migrating to such sales platforms going forward across markets. So constantly keep working on understanding the latest trends and practice usage of various platforms to keep oneself, updated.This is especially true for Generation X people, more so who are residing in tier 2 and 3 cities/towns in various economies and practicing Insurance solicitation.
  • Develop and use Analysis Tools: Thanks to the digital explosion now a days we have access to whole lot of information pertaining to customers. We can understand their purchasing and spending habits. We can identify what our target customers like and do not like (thanks to social media, CRM) etc. etc. So use these information to solidly profile out potential customers and prepare accordingly while interacting with them. Those days of cold calling might be sadly over!!
  • Do not be in the business for Commission percentage only: This to my mind is an important point. As customers become more demanding, Insurance companies would be forced to innovate and keep a hawk’s eye on expenses. This would in turn impact product commissions and a lot of other things going forward. So instead of making commission percentage the biggest motivating factor to join this business, focus on creating a bigger customer base as research indicates even with technological advent still as on date customers prefer discussing Insurance solutions (especially life) face to face. A bigger base of say 500 customers or more would guarantee a long and successful career over time.
  • Always maintain high Integrity standards: In this informed world never..never think of quoting features or benefits a product does not have, no matter what the provocation. Please remember once the meeting is over, the prospect will definitely research for the same online. Do not fall in this trap be cautious.
  • Develop deep domain knowledge: I think the days of focused excellence are coming and it might be prudent not be everything to everybody(Life+General+Mutual Fund+Real Estate+ Travel Agent +++). Rather be known as Insurance Specialist and meet prospects accordingly. So please invest in knowledge and skills. Push your development manager to give you the best support. Push the company/companies you represent to keep you updated. Study, get more qualified achieve MDRT. Believe me all this is possible when you start to underwrite 3 proposals a week and scale up from there.
  • Invest and innovate in the areas of prospecting and lead generation: The ability to create a differentiation in the mind of potential customer lies on how innovative and creative we can be while positioning ourselves as best in class Insurance Practitioners. Use LinkedIn to position your profile, use Slide Share to share updates, thoughts. Create your own webpage even use Facebook to start a community. In short be creative, use technology in promoting yourself as a brand and focus on newer methods of generating qualified leads for increasing your customer base and business volume.

I believe Insurance is a matter of solicitation and within the paradigm of abundance.There is and will be enough scope for motivated individuals, having self belief to thrive in this industry in the coming years especially in emerging markets.

Signing off with a piece of stats which I found to be interesting (sourced from Worldbank.org and OECD.org).

Country Workforce in Millions Mobile Connection/100 Citizen Insurance Penetration
China 793.3 93.2 2.96%
India 481 77.6 3.70%
USA 159 103.1 10.70%
Indonesia 120 99.7 1.80%
Brazil 106.2 137.1 3.00%
Bangladesh 77.6 77.4 0.90%
Pakistan 65.6 77 0.70%
Japan 65.5 95.1 6.70%
Nigeria 54.2 94.5 1.00%
Mexico 53.9 90.2 2.10%

Do please let me know your feedback, thoughts..



Disclaimer : Insurance is a subject matter of solicitation.