By Angelyn S Treutel Zeringue, President, South Group Insurance Gulf Coast
Technology in the Insurance Industry is changing the landscape and is significantly impacting the insurance distribution system, today’s consumer demands choice and customization. With social interaction and intuitive systems, a consumer is able to work with independent Trusted Choice agents to learn about the contracts and options available to reduce their risk of loss in an accident or a catastrophe. The modern consumer is more intelligent and has done much research on available coverage’s and prices prior to actually speaking to an agent. The agent, however, is still a critical piece of the overall equation, due to the complexity of coverage’s and the different contracts available from the thousands of insurance carriers offering coverage.
So how does technology improve the insurance buying experience? Insurance systems have evolved to provide electronic interfaces among the various agency and carrier partners. Third party data from replacement cost estimators, tax departments, catastrophe models, and fire marshal systems is able to be integrated into the algorithms used to accurately rate the risk exposures to calculate premium rates for policies that are more precise for the actual risk being insured. Likewise, history on the owner is also being integrated to identify payment and credit patterns and claim history, which have been proven to have a direct correlation to the risk exposure.
Social media is being used to educate consumers on the complexities of the insurance contracts, so they understand more about their personal and business exposures as they go through their lives. Young people with simple needs and exposures are able to easily procure their needed protection, and cyber relationships are being developed to provide sound advice to this target audience, as their lives become more complicated with families, young drivers, increased assets and the need for retirement planning.
From an agent’s perspective, continued technology improvements are critical for the efficient distribution of products. Agents and insurance carriers must continue to work together to standardize all of the different data streams and systems so that all of the various systems, including mobile and mainframe, are able to “speak” to one another and transfer data. A global standard has been developed for the insurance industry through ACORD with the objective of “straight-through processing”.
Increasingly, the ability to operate with mobile technology has improved, so that field agents are able to provide critical underwriting data gathered at the actual risk location. The agent then transmits this to the carrier system for consumption and analysis, and a rate is able to be returned along with contractual stipulations for payment, signature, and binding of the insurance policy. Clients are able to access their policy information from smartphones for use when conducting business and there is a need to provide proof of coverage, or when pulled over by a local policeman, and they need to provide validated auto insurance coverage information to avoid a ticket.
Social networks may be effectively mined for specific clientele where the agent is able to provide superior options.
Technology has vastly improved the availability of insurance information and the precision of evaluating risks and assigning appropriate pricing. Many insurance technology advancement efforts are under way with groups such as the Independent Insurance Agents and Brokers of America – Agents Council for Technology, ACORD, and AUGIE which is comprised of Agency User Groups. The insurance industry is relationship-based, but relationships are greatly enhanced with technology.