Agent/Advisors: Use Technology To Become Relationship Managers
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Heres a hypothetical case study. A customer with a special need contacts a life insurance agent. The customers child has been diagnosed with cystic fibrosis, and she needs to know what kind of coverage is best for the family. How does the agent respond?
The agent would not want to respond immediately with a product recommendation. Rather, he would want to discuss the implications of cystic fibrosis and determine whether some sophisticated planning is needed.
The question, however, is whom should he consult. The agent would need to talk with people who have expertise with disabled children and the accompanying planning. The agent may search out expertise via local connections or through the home office, and hopefully one of these avenues would supply the agent with the necessary advice.
Perhaps the agent will get all the information he needs, but, then again, there are no guarantees. He may need to know how to set up a trust for a life product, for example, and arrange for custodianship of assets and the child. And then what happens after that? Will the agent be able to continually service the customer after the sale, as changes induced by life events alter the needs of the family?
This case illustrates a telling point: In the current manufacturer/distributor roles that agents and carriers play, agents are, by and large, suppliers of advice as either general practitioners or as specialists in one or more areas. As they move from a sales to an advisor role, however, they do not have the tools or access to experts to call on for joint work/team selling. Nor do they have the means to do more diverse things on their own. And that points to a fundamental flaw in the current agent identity: They have not yet become relationship managers.
In the future of online insurance services, agents will need to grow into more sophisticated roles than simply that of the general practitioner. As offerings diversify from standard insurance products to expanded financial services, agents have begun assuming a "buyer advocacy" role in their relationships with customers. This is more of a full-service role, in which agents recommend products and services to customers based on information each customer supplieseither from data garnered via online channels or through traditional mechanisms such as a phone inquiry.
In short, agents have begun recommending the right products and services that better fit their customers needs, in an effort to extend their interactions with their customers to build long-term, loyal relationships.
Technology has initiated the change in the agent identityand complicated it. The Web has made it easier for customers to perform certain mundane tasks, as well as research options available to them.
On the agent-carrier side, carriers have supplied software solutions that make the agents job easier in the process of bringing the carriers products to the customer, as well as in agent/carrier communications. Thus, technology has enabled the agent to spend less time in administering to their customers and more in providing the kinds of buyer advocacy services described above.
However, tell an agent today that technology has made his or her life better, and youll likely get a smirkor worse. The reasons behind this are twofold: First, while self-service channels may help the agent with processing certain forms and automating mundane tasks, there are still low transaction rates among insurance consumers. Also, the agent does not usually have access to the customer information garnered through the self-service channel.
Hence, the Web channel is not forging the kind of profitable relationships that the agents would like to enjoy. Second, while carriers have supplied good software solutions to the agent, they tend to be proprietary. As a consequence, the agent must be proficient in multiple software products that live in their own little worlds (application silos, as we call them in the software industry).
For the agent role to expand, these technology challenges will need to be overcome. The good news is that the climate of financial services convergencethe trend of consolidating banking, investing, and insurance under one roofwill actually help solve the problem.
