There's no doubt you've heard the phrase "going digital." For many brokers and agents, that sounds time-consuming, complex, and downright scary.
Here's the truth: transitioning to a digital insurance brokerage doesn't have to be overwhelming or daunting. In fact, it’s often not nearly as complicated as you might think, and your brokerage is going to be much better off for it.
In the last few years, the industry has been rapidly adopting new technology. Today, smart business management systems allow brokers and agents to gain a competitive edge.
They can service the tech-savvy Millennial and now Generation Z customers who want self-service capabilities, easy-to-navigate websites, and mobile accessibility.
If you're not able to work with this powerful block of potential customers and communicate with them in the ways they demand, well, you’re going to be in trouble.
In this post, we're going to show you, step by step, how you can make the switch, and why going digital can help your brokerage improve workflows, achieve greater customer-centricity, and roll out better technology to enhance your operational capabilities.
But first, let's address the elephant in the room: legacy IT systems and infrastructure.
Why Going Digital is Key to the Future
For many brokerages, old and outdated legacy systems are what stop people in their tracks when transitioning. They are worried that these big, expensive systems that they've relied on for decades are too delicate to disturb without creating a negative ripple effect throughout their business.
They also worry that even if they can survive the initial disturbance, the legacy system has grown so complex and so customized to the needs of the company over the years that a lighter, faster system will pale in comparison and fail to deliver the robust functionality required.
That, however, is simply not true for a lot of organizations. In fact, all it might take to get a better system up and running is to take a long hard look at the outdated or redundant operations on the current infrastructure and replace them with new ones. It’s also possible for many brokerages to run the heavy data collection on their current systems, while implementing new and more agile cloud-based systems at the same time. Innovation in insurance is here.
A good system can serve as a collector and integrator of multiple (third-party) backend systems to organize, process, and present data in a single, user-friendly front-end. This is a nice workaround for firms afraid of touching and risking the fallout from compromised legacy systems while still affording a lighter, quicker, and more intelligent system with a greater range of features and functions.
A report by McKinsey found that, at present, 70% of processes in most brokerages are manual. That means lots of paperwork, increased risk of errors (and lost documents), and lag time for customer service. Each of these can eat into profits.
The same study found that there is significant potential to going digital. The charts below illustrate how a massive reduction of manual processes and a dramatic increase in full/partial automation is possible.
Now, apply that potential to your current costs. Digitizing can help reduce them. McKinsey "estimates that carriers can drive a minimum one- to four-point improvement in their overall expense ratios through rapid digitization."
That point, alone, should be convincing enough to make you want to know how your brokerage can start going digital.
We've broken it down into three steps.
1. Turn your attention to the customer
Today's businesses are becoming customer-centric. This is one crucial way in which technology has been disrupting industries across the spectrum and where smart organizations can get an edge.
It's no different in insurance, albeit with a twist. At the end of the day, relationships are still very much a core factor in a successful brokerage — that personal, human-to-human interaction matters for many customers.
The best way to do that is through really understanding the needs of the customers you serve and what it is they want going forward. Right now, and likely in the future, customers are invested in a couple of factors:
- They want access to information.
- They want to get that information anytime.
- They want transactions and interactions to be easy.
Each of those are difficult to provide quickly and accurately with manual systems and processes, for both potential and current customers.
Digital systems change that. For customers who want the opportunity to choose self-service, they can get the quotes or information they need right off the bat and then interact with a broker or agent when they need to.
For brokers and agents, having the customer information ready to go at your fingertips means you can not only service them in real-time when it works for them, but you also can recommend upsells and cross-sells for products that will fit their exact needs.
Digitizing improves the full customer lifecycle now, too.
Leading agency management platforms help brokers and agents add to the customer experience by bringing back office information, which is often traditionally siloed within particular departments, to the forefront. Client data which previously had to be aggregated from different areas can now be accessed in a single user interface.
Agents and brokers can provide excellent end-to-end customer service that gives them an enhanced experience. This is important to keep in mind when "the probability of selling to an existing happy customer is up to 14x higher than the probability of selling to a new customer."
Once you know and understand the needs of your customers and how you can meet those needs, it's time to start preparing for the next step.
2. Evaluate and Prioritize What Processes to Digitize
The last thing you want to do when going digital is to jump in without a plan. Then, your brokerage will undoubtedly be facing all those headaches you imagined would happen when digitizing.
Here's a better approach:
First, take a good look at your current legacy systems. You want to do this in order to determine which processes can become digitized and where upgrading legacy technology can work. Some procedures can be fully automated while others can be partially automated. Note which fall into each category.
Also remember, not every process needs to be automated right away.
Additionally, there will likely still be some manual processes involved. That's to be expected. The key is to have an understanding of what methods can become much more efficient by going digital and work to get those efficient first.
There are a few other best practices to keep in mind during this evaluation process.
It’s crucial at this stage to prioritize. Some processes are far more important than others, when it comes to keeping the business up and running. You don't want to do anything that will cause current clients and prospects to suffer for the benefit of potential leads down the road.
In this case, leading agency management platforms can help. Smart systems are designed as end-to-end solutions, however they still give brokerages the option to integrate into the back office modularly. This allows for the deployment of those most pressing and least disruptive features first, and then once the system passes muster, build in order of need from there.
It's best to have buy-in from all the stakeholders in the company. This sort of change is as much as a cultural one as it is technical. It's more likely than not that the scope of roles will change after digitization, so having everyone on board offering constructive information on things like current bottlenecks or lag times can be invaluable.
Now that you have a clear understanding of exactly which processes can go digital, it's time to move to the next step. This is where implementation begins...
3. Implement a Digital Management System
Now here's where the rubber really meets the road. If you've done a good job in the previous step, it will be a lot easier. So once again, knowing from the very start exactly what processes are going digital is very important.
Once the system is in place, one of the most important things to do is to start onboarding. Leading agency management platforms are designed to be easy to integrate into already existing structures and framework. Data and information can be migrated in short blocks of time and the system as a whole can be up and running in weeks, not years.
These smart digital management systems are designed to be easy to navigate with a clean user interface that is setup to provide the information needed. At this stage, a key focus should be getting everyone comfortable with the system and their new or adjusted roles.
One area to focus on is where your brokerage can see some quick wins. There are likely a number of processes that were time-intensive as manual tasks which caused bottlenecks or lags in service yet can be digitized relatively easily.
Smart agency management systems are fully customizable, so you can create the exact workflows that best suit your brokerage’s business practices. It's important to identify these and tackle them first, as they can be scaled later on as more business comes in.
After these quick wins, focus on the next series of tasks in the priority list. Ideally, those tasks with the highest priorities will also be those that can offer the most significant opportunity for success and growth for your agents and brokers.
Even small changes like these can have a positive ripple effect across the organization which can help employee motivation and buy-in.
New technology is transforming the insurance industry, and it's up to brokerages to develop a plan to embrace the digital transformation.
Consumers today want more, and it's possible to give them an outstanding personalized customer experience while being more effective and efficient at the same time.
Are you ready to bring your brokerage to the next level and embrace a smart business management system? If so, transforming to a digital insurance brokerage will be your best option.