Changes Ahead for Agency
The relationship between insurance carriers and independent agents is a tricky one, compounded by
the direct writers that siphon off a huge chunk of the personal lines business, and the needs of today’s
insurance-buying customers who often use technology to cut through the middle men. We asked three
insurance technology analysts their views on the relationship between carriers and agents. Providing their
insight are: Deb Smallwood, founder of Strategy Meets Action; Matt Josefowicz, managing partner of
Novarica; and Mike Fitzgerald, senior analyst for Celent.
What Do You Think?
This month’s question:
In what ways are carriers making a commitment to the independent agency
distribution model that will keep it viable for the future?
Strategy Meets Action
Tremendous marketplace and technology changes are
taking place in the
The impact of the
ed, digitalized world
around us influenc-
es how insurance is being sold and the
processes to service the business.
In response, insurers have changed
business strategies and expanded into
an omni-channel distribution model.
However, the independent agency model will continue to play a critical role in
the future. These changes influence the
need for investment. Beyond marketing
intelligence, real-time access, download,
and comparative rater investments,
next generation portals help insurers
accomplish the necessary alignment to
Modern portal solutions have broad
capabilities and provide flexibility that
not only delivers rich business function,
but also leverages emerging technologies. These portals are able to meet a
variety of needs, serve the requirements
of multiple types of users, handle a variety of transactions, and provide cohesive and concise data exchange on any
device, to any agent or carrier system.
Most insurers who
rely on independent distributors
are committed to
this model, but
they have a wary
eye on the horizon.
The value propo-
sition of the agent
channel is in the midst of change, for
customers and insurers. In a world
where it is just as easy to put informa-
tion and transactional capability into a
customer’s hands as into an interme-
diary’s hands, the role of the agent as
information broker is in decline.
Large portions of personal lines and
increased portions of small commercial
lines have been simplified for customer
convenience and speed over complexity and comprehensiveness. At the
same time, many agents are walking
away from simple personal lines because the margins are not attractive.
We believe the independent agent
channel is going to look more and
more like the IFA channel in wealth
management. While simple 401(k)s
and IRAs may be managed through direct relationships, there will always be
a market for the personal connection
and trusted advice that comes from a
There have been
some clever ex-
amples of carriers
supporting their in-
ties for the benefit
of the distribution
network. This delivers capability to
agents at a lower cost and strengthens
the link between the agent and insurer.
A great example of this is Allied
Insurance with its mobile app, which
offers customers 24/7 access to policy
information and convenient services,
and adds choices in how to interact
with Allied. Allied went one step further and introduced a feature that differentiates them—the ability to brand
the app to showcase the carrier’s elite
agent group, known as AIDCO. Dynamic branding enables AIDCO agents to
promote their agency brand within the
customer’s mobile app experience.
When a customer signs into the Allied Mobile App, the system performs
a brand check with the Allied mobile
engine and determines if the agent is
AIDCO and if the agency has uploaded
their logo. If both are confirmed, the
app downloads the logo to the device
and displays it.