ADAPTING& IN TODAY’S CHALLENGING

It has been a difficult past few years for property and casualty (P&C) insurance agents and brokers. New technology centered on direct-to-consumer insurance sales threatened to render agents and brokers obsolete, until it was discovered that many consumers still prefer to work with these professionals. The market shifted again with lockdowns, followed by sharp cost increases across the board. The winds of change are back again with homeowner insurance providers leaving California and Florida, and the potential for other states to follow. Technological disruption also looms again with artificial intelligence (AI) and machine learning.

Dramatic changes of this kind have not been seen in the insurance industry in decades, likely not since the Great Depression. But, it’s certainly not the first time the foundation of our industry has been shaken. Insurance business dates back to the 1700s. It has seen a more than fair share of turmoil, and still thrives. It has required that the industry adapts, and that is the challenge we face today - especially for agents and brokers.

A Wake Up Call

As economic turmoil increases and the hard market pushes premiums for home, auto and various other lines higher, 51% of consumers said they are looking for ways to save money on their existing insurance policies. When asked how they are saving money on insurance, 26% are decreasing or plan to decrease coverage or limits on existing policies, 23% have or are considering switching to a new insurance agent, and 20% have already removed a policy from their coverage or plan to in the next six months.

With one out of four consumers considering switching agents, business as usual is no longer sufficient for agents and brokers to stay competitive. There are new business opportunities as well as challenges. Developing an agency strategy to help clients cope with this new reality and adapt your business to the market is now imperative. Consumers and businesses need agents and brokers for their guidance, knowledge and direction more than ever. Navigating the landscape is increasingly becoming difficult without our help. It’s important that your agency adapts and rises to the challenge.

RE-EVALUATION

Agents and Brokers need to re-evaluate their strategy for developing new business and retaining existing clients in this new, volatile market. Assumptions that most clients will renew with minimal contact no longer holds. Going forward agents and brokers should consider a paradigm shift that requires a more aggressive approach in the context of an advisory role.

Here are some straightforward strategy guidelines that will help focus efforts on negotiating the changing P&C client landscape. Known as a REACT imperative, the initial letters stand for:

• Responding by reaching out to show you care

• Educating clients every chance you get to help set client expectations

• Accelerating your use of technology to improve efficiency and responsiveness

• Communicating continuously to reinforce your client relationships

• Taking immediate action now to help clients reduce their risks

Responding - A wise customer service leader once remarked that clients don’t care how much you know until they know that you really care. Be proactive with clients via email or phone calls. Let them know you’re aware of what’s happening and provide guidance on how they should react.