A late panel at the Insurance Telematics 2013 conference in Chicago this week was titled "Brokers and Agents: A Crucial Piece of the Puzzle." It featured two agents, Ted Poulos of the Leech Bridges Agency and James Kane of HUB International Personal Insurance; Basil Enan, founder and CEO of the online brokerage CoverHound; and Kirk Galasso, a senior ASR for Progressive who has been tasked, he says, with onboarding agents with the popular Snapshot product.
Insurance agents, fearful of being disintermediated, have a reputation for being wary or even threatened by new technologies. Some insurers, like The Hanover, are re-positioning their agents as valued financial advisors for potential high-value clients instead of cashiers for simpler, commoditized products. Kane says that when it comes to usage-based insurance, that advisory role is crucial. Telematics can be an important tool to improve customer retention, he says: An independent agent with several options at their fingertips has a better opportunity to find the best rate for their customer when that customer is unhappy.
"[Telematics is] a good proposition for independent agents because we have traditionally been in a consultative role," Kane says. "One of the biggest gripes customers have about insurance is that they don't have control over their rate. We can now say, 'Here, try this, drive how you always have and you'll be charged based on it.'"
Progressive's Galasso says that anecdotally, he's seen a trend toward captive agents moving into the independent world to take advantage of different products.
"They want to be able to offer multiple carriers and not be tied to a single rate or carrier," he says. " With the right customer, this is an opportunity to get them a better rate."
Enan adds that agents' advice is going to be even more important as they develop a feel for the different nuances of each usage-based insurance product.
"You can spend a weekend comparing base rates, but it would take months to compare UBI discounts" because you'd have to install multiple carriers' devices for their required time period, he explains. When comparing multiple policies, he adds, "Maybe one base rate is higher than another, but the potential UBI discount is more. We want to bring that transparency, but we also have to get smarter.
Poulos tested Snapshot himself to understand it more before trying to sell it to customers. He says that even though a discounted premium can take a bite out of commissions, he likes the technology and wants to educate customers on its positives.
"A lot of people are scared of it because of the 'Big Brother' aspect," he says. "My clients have been averaging 15% to 20% discounts, though."
"We don't want to be like Borders or Barnes & Noble, who when Amazon released the Kindle said, 'Nobody will read books electronically,'" Kane concludes. "We are never going back to the way business was done before -- if we mail someone under 30 a 50-page application were never going to get it back. The fact is that we have to get more efficient."