Are Insurance Agents Going to Lose Their Jobs?
This isn’t the first time this blog has dealt with threats to the insurance agent (and it probably won’t be the last), but there was an interesting article in the New York Times recently that deserves a mention.
The article entitled, “Insurance via Internet Is Squeezing Agents,” deals with the ramifications of Google’s impending play for a share of the insurance market.
The fear expressed in the article is that Google could put agents out of business — but is this threat a real one?
Google’s ‘Play’ for Business
One concerning thing about the future for insurance agents is that Google has reams and reams of data on people and their habits — particularly their travel/driving habits. With this inside track, they could leverage some of that knowledge to make a splash.
Furthermore, Google has the ability to process this information in a way that an independent agent might struggle to replicate. Last but not least, Google is in a position to develop partnerships with existing companies, so that they can collect referral fees (via comparison shopping) to potentially cut out the agent altogether.
As D.J. Rodrian of Wisconsin-based Rodrian Insurance told the news site, “It should worry any agent when a megacompany like Google, with all the personal information that they have about people, is getting into your industry.”
Still, Rodrian admitted he’s not worried about going out of business, and the Insurance Information Institute’s Robert Hartwig isn’t either.
“Even if they [the customer] go through Google or another portal, they still end up at an insurance agency or company at some point,” Hartwig said. “I think the agency model has a lot more consistency than many people give it credit for.”
Hartwig also noted how “crowded” the online insurance shopping market currently is (and has been for quite some time). In spite of this, the role of the agent persists.
Fair points, and they highlight a prescription that today’s agents — particularly independent insurance agents — should be following for survival.
1. Build Your Authority.
Like Rodrian goes on to say in the NY Times piece: “Consumers don’t have a great understanding of insurance. They don’t find it an interesting thing to educate themselves about. They do get comfort in the advice of a professional.”
Be that professional. Show you have the expertise to guide them through the complexities of their insurance needs.
2. Explore Other Income Opportunities.
At some point, as Hartwig says, the buyer is going to be channeled through an insurance company. Thus far companies like Google are not prepared to enter the sales side of the market. They are trying to capitalize on their data through existing providers. As long as an insurance company exists, they will need a human presence to guide and interact with their customers. Establishing your online presence now can make you an attractive candidate, whether these companies decide to hire you full-time or have a contract agreement.
3. Turn Customers Into Lifers.
Where Google and other big providers are positioned to do the most damage is in single line purchasing. Say someone is looking for the cheapest car insurance; they could probably find that out and deliver the goods.
But most people have insurance needs that go well beyond one line. They buy homes, rent apartments, secure life policies, and purchase healthcare plans. Companies that are able to weave all of that together into a more affordable option stand a much better chance of beating Google or Walmart or whoever else enters the fray.
The insurance field is certainly not beyond disruption. There is still much that could change in the years to come. As of now, however, the future has a place for the enterprising insurance agent. Where will your place be?