THE KEY TO AGENCY TECHNOLOGY SUCCESS

The key to successfully implementing technology at your agency is eagerly adopting the latest trends

I have been pondering this question for the last several years.

A few years ago, I co-chaired the Changing Nature of Risk workgroup with the Big “I” Agents Council for Technology (ACT). The workgroup’s goal was to help insurance agencies understand emerging technologies and leverage them to provide a better experience to their prospects and clients.

Working with this group led me to research companies that have embraced technology changes and become super successful because of it. I ended up doing a deep dive into the practices of Jeff Bezos and Amazon. I wanted to understand what had made them so successful for so long.

Believe It’s Always Day 1

One of the principles Jeff Bezos instilled into Amazon’s culture from the very beginning was “It’s always Day 1.” In his first letter to shareholders in 1997, he said: “This is Day 1 for the internet and, if we execute well, for Amazon. com.” He has ended every shareholder letter since with some version of, “It remains Day 1.”

What does he mean by Day 1? It’s the first day your business is open, and you should provide your customers with the best experience possible. Day 1 is a mindset, not a list of steps or strategies. It is the filter through which all decisions are made. It is designed to keep everyone focused on doing what is right in each situation, not just what is possible given Amazon’s size and influence.

Because, like a child’s tower of building blocks, if the foundation isn’t stable, the tower will come tumbling down. And then it’s Day 2.

When asked at an employees’ all-hands meeting what Day 2 looks like, Bezos responded, “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death.

And that is why it is always Day 1.” Many successful companies have failed—Kodak, Blackberry, Blockbuster, Sears, CompUSA, Borders, and many others—because they became Day 2 companies.

Bezos thinks the equally critical question we should ask is, how do you fend off Day 2? His answer: “Here’s a starter pack of essentials for Day 1 defense: customer obsession, a skeptical view of proxies, the eager adoption of external trends, and high-velocity decision-making.”

So, how do today’s insurance agencies avoid becoming a Day 2 business? One answer: The eager adoption of external trends.

“The outside world can push you into Day 2 if you won’t or can’t embrace powerful trends quickly. If you fight them, you’re probably fighting the future. Embrace them, and you have a tailwind.”–Jeff Bezos in a 2016 letter to shareowners.

Agencies Aren’t Tech Companies.

The insurance industry is not known for eagerly adopting external trends. It is often portrayed as Luddites, falling behind other sectors. Moreover, consumer expectations of what constitutes good service have changed over the last several years, and the pandemic only continued to accelerate the trends.

Online transactions are increasing exponentially. Electronic signatures are a necessity. The desire for electronic payment options is growing. A rich interactive website is essential. And text messaging is becoming a primary way to communicate for a growing segment of consumers. These are just a few trends that picked up speed during the last 18 months.

More are coming, and they’re coming fast. Here are just a few: Streamlining small commercial transactions: New startups and existing solution providers are making significant progress in streamlining the quoting and carrier submission process for small and midmarket commercial business.

Increased demand for video: 2020 taught us that a Zoom meeting could work in many more situations than we assumed. Using video emails instead of text-only emails builds better relationships, as do video proposals.

Open platforms: More solution providers—new and old—are recognizing the advantage of creating open platforms.

Application programming interfaces (APIs) allow different services to create a machine-to-machine communication channel that supports sending data and information to where it’s needed. This openness helps reduce or eliminate manual processing steps, increasing productivity.

Hawksoft and EZLynx are examples of two traditional AMS vendors building APIs that their users and third-party providers can access. Applied Systems recently announced that they are speeding up developing APIs for their Epic platform using the Google Apigee API Management service. Vertafore has enhanced its Orange Partner Program.

With open platforms, agencies can use third-party API connector platforms like Zapier to create new workflow customizations. For example, EZLynx supports a Zapier integration, which allows the agency—without help from EZLynx—to create an automated workflow when a customer service representative (CSR) enters a new commercial prospect. The prospect data will automatically be sent to the agency marketing platform to add to the agency newsletter list. This technology opens a new world of options allowing the invention of custom workflows for the agency willing to eagerly embrace external trends.

Entertaining the InsurTechs

There’s tension in the InsurTech realm that continues today. Some direct-to-consumer InsurTechs were founded to replace the agent (you) with technology. Other InsurTechs were founded to help the agent. And though some people said agents were irrelevant and no longer needed, the independent agency channel has remained remarkably resilient.

What is the market saying? It seems consumers have voted with their wallets that most prefer working with an agent. Metromile, Root, Lemonade, and Next are direct-to-consumer InsurTechs that have recently changed their tune and are now embracing independent agents as a distribution channel to help reduce their acquisition costs.

To maintain this connection with consumers, independent agents must continue to adopt consumer-friendly technology solutions eagerly. The question agency owners should explore: Do you utilize InsurTech’s technology platforms even though they may be your competitors?

How Can Agencies Keep Up?

Agency owners know how frustrating it can be to stay on top of the latest technology. It’s hard enough to keep an agency running efficiently and smoothly, grow a book of business, support your employees and provide outstanding customer service. Again, your agency is not a tech company. But it’s not impossible to keep up. And if you do, it will give you a competitive advantage.

Here are four steps agencies can use to help keep up with technology changes:

1) Discover. A discovery process will help you better understand what’s out there and, more importantly, what’s suitable for you. Ways to discover emerging technologies include:

• Reading industry trade magazines

• Subscribing to technology newsletters in related industries

• Engaging with insurance associations

• Attending technology-focused meetings

• Participating in peer groups

• Participating in technology user groups.

2) Evaluate. Just because new technology is available doesn’t mean you should use it. Evaluate the technology to determine if it will help meet your clients’ needs. Some questions to ask include:

• What are other agents using, and what has been their experience?

• Are user reviews available?

• Are there reviews online?

• Can you ask for feedback from other agent groups, such as vendor groups or association groups?

3) Select. The selection process helps narrow multiple options to one specific solution that best meets your needs. Here are questions to ask as you go through the process:

• What problem are you trying to solve?

• What are must-have features, and what are nice to have?

• What are your customization options?

• What are the pros and cons?

• Can you do a test drive?

4) Implement. I have seldom seen technology fail. However, I have seen technology implementation within an organization fail when not enough attention is paid to getting your employees on board.

Picking the right technology for your organization is the first step. The next is to create an implementation plan to get the maximum benefits from the new solution.

A few items to keep in mind are:

• Communicate clearly to your staff what you are doing, why you are doing it, and how it might affect their jobs throughout the selection process.

• Agency personnel tend to resist change. Buildin enough training so your team can be brought up to speed as quickly as possible. The best technology with the best intentions can get sabotaged if agency staff doesn’t understand the benefit for themselves and the client.

• Find cheerleaders early and help them help you manage the implementation process.

Agencies have been trying to keep up with technology on their own for over 40 years. However, one thing is clear: eager adoption of external trends can help an agency continue to be a Day 1 thriving business like Amazon instead of a Day 2 extinct business like Kodak or Blackberry.

Steve Anderson is a technology and risk expert and one of the original influencers on LinkedIn. In 2021, Anderson co-founded Catalyit in cooperation with 18 Big “I” state associations and currently serves as CEO. He is also the author of “The Bezos Letters: 14 Principles to Grow Your Business Like Amazon,” a Wall Street Journal, USA Today, and international bestseller.

Allie Kennada is Big I Kentucky's new Office Manager. A Tennessee native, she is a recent graduate of the University of Kentucky with a degree in Psychology. She loves everything outdoors, especially hiking, kayaking and golf. A resident of Oldham County, a lover of dogs (hers are Ginger and Sadie) and vegetarian cuisine connoisseur, she brings another layer of fun and energy to the staff at Big I Kentucky. Her friendly voice will likely be the one to greet you on the phone when connecting with the office. Welcome to Big I Kentucky, Allie!