The end of this month moves us into the zodiac sign of Gemini, which is identified by the symbol of twins.
In thinking about duality, let’s explore a couple of contrasts that really help identify the way we should be positioning our agencies.
What Versus How
Our clients don’t always know what they need. They can identify the risk—what they are looking to protect against—but the actual products that meet their needs are somewhat elusive to most insurance buyers. Sure, they can purchase certain coverages directly from carriers, but insurance products are pretty complex. This is why the independent broker channel remains strong, especially in commercial lines. Without the appropriate knowledge, it’s entirely possible to buy a policy that doesn’t actually cover what you’re trying to cover. Coverages are the what—and in most cases the buyer doesn’t understand the what. It’s up to us, the brokers, to define the what using skill and experience to balance coverage and cost.
The how lies completely in the domain of the buyer. While buyers may not know what they want to buy, they absolutely know how they want to buy it. Consumer empowerment has picked up at a feverish pace in the age of Amazon. Consumers now expect a personal experience. This experience can be slow and social or fast and efficient. It all depends on the buyer. If you need proof, just look at your own buying habits. How have they changed through the years? Take it a step further and look at the buying habits of your family members. Are they different from yours? If you have teenagers as I do, I guarantee they are different.
Now think about how these different buying experiences are accommodated by a single retailer. My teenagers will always browse Amazon reviews before buying, and they won’t consider their transaction complete until they socialize their experience after they get their stuff. I, on the other hand, purchase on Amazon like a machine gun. Clickity, clickity, pow! Search, buy and get off my screen. I have much better things to do, and unless my stuff is broken or otherwise incorrect I will never think about it again.
This explains why I feel like I’m being waterboarded when my commercial renewals come around. My broker lays out the hoops, pulls out the whip and forces me through the marathon of manual processing, filling out forms with stuff they already know (like my name), printing paper, signing, scanning and sending it all back. The technology actually makes it harder than just driving over and using paper. But if I’m foolish enough to challenge the process, I’ll just prolong the torture. Sure, I’m getting what I need: a good product at a good price. But the moment I feel like I can get this AND a personalized experience, I’ll tell my broker where to stick his whip.
This doesn’t bode well for our industry.
The key takeaway here is that we as the brokers should not dictate the how. If we do, we will lose. Our world is the what. When it comes to the how, it’s our job to listen and provide what’s requested.
Insurance Versus Assurance
It’s important to keep in mind that buyers of insurance aren’t actually buying insurance. They’re buying assurance, a feeling that the bases are covered and their risks are mitigated. Carriers sell insurance, brokers sell assurance. There’s a fundamental difference here, and that’s why we exist.
Look at Zenefits. It appears to have sold innumerable policies without a license. Now that investigators are in the building, the agency is trying to assure its clients that it is procuring the necessary licenses—no need to panic. But this approach completely misses the mark. I doubt Zenefits’ customers are as appalled at the idea of buying insurance through an unlicensed agency as they are about relying on the advice of an uneducated agency. Insurance is purchased, assurance is earned.
Carriers tend to believe the independent agency channel is necessary from a geographic perspective, that they have the ability to provide their products directly but don’t have the ability to effectively and efficiently deploy sales resources in all geographies. With all due respect to our friends on the other side of the industry, this also completely misses the mark. Carriers provide insurance, which is a product, but not assurance, which is a service. The skills, processes and interactions used to sell are completely different. Insureds buy from us because, as brokers, we satisfy their need to feel safe.
This could all be changing though. New carrier upstart Lemonade may just bring the modern, personalized buying process to the forefront, and traditional carriers had better be paying attention. If Lemonade truly cracks the peer-to-peer social insurance market, buyers’ need for assurance could very well be met by the fact that their entire social network consumes the same products covering the same risks. And where does that leave us? Where does that leave traditional carriers?
As always, we end with more questions than answers, but I’ll leave you with this: we aren’t simply placing product here. Yes, we need to drive sales and retain clients, but we also need to evolve the way we interact with our clients. We need to provide the experience to our clients that we demand in our own lives.