Insuranceciooutlook

Key Insights into Independent Agencies' Digital Technology Adoption

By Insurance CIO Outlook | Wednesday, February 10, 2021

US insurance companies of all sizes know the value of having a digital strategy, with 88 percent citing this as a priority for the next 1–5 years. The priority given to offering a digital strategy appears to correlate to the size of the agency.

Fremont, CA: Independent insurance companies with a well-organized and executed digital strategy has a far greater chance of success in today's tech-heavy society. Things have been trending this way for some time, but in 2020 a new focus was put on the requirement for agencies to digitize, with the COVID-19 pandemic forcing a sudden as well as major increase in remote work and digital services.

As per the 2020 Applied Systems Digital Agency Report, which garnered insights from 700 independent insurance agencies across Canada, the US, the UK, and Ireland, agencies with well-rounded technology strategies that incorporate foundational tools such as management systems and engage with emerging technology like self-service portals, are witnessing both better returns on their technology investments as well as a bump in revenue.

Not a Moment like the Present

US insurance companies of all sizes know the value of having a digital strategy, with 88 percent citing this as a priority for the next 1–5 years. The priority given to giving a digital strategy appears to correlate to the size of the agency. This is illustrated by the fact that 91 percent of large agencies that responded to the survey as well as 68 percent of medium to large agencies.

However, the survey concluded before COVID-19 arrived on the scene and thus did not take into account the overnight adjustments that many agencies had to make in order to accommodate remote staff and comply with the guidelines on social distances. For some – particularly 33% of US agencies with no digital strategy at all – 2020 has been a year of tools and technology to link employees and customers while sheltering. Although temporary fixes to handle this sudden change can sustain agencies for a short time; the pressure is now on to build pathways forward to navigate a post-pandemic business model that supports the digital world that we live in today.

Solid Base Technology

A fundamental agency management system is defined by Applied as the "cornerstone of the digital agency." According to the 2020 Applied Study, 97 percent of insurance companies in the US currently use the management system. The bigger the agency, the larger the adoption, but even the smaller agencies with less than $25 million in annual revenue showed an adoption rate. Agency management systems allow companies to better handle client relationships, policy and benefits management, revenue automation, financial accounting processes and record management. They are a single, interconnected system that offers a full view of clients and opportunities that every person in an organization can access and act on – irrespective of position, time or place. This helps agencies standardize workflows, seamlessly communicate with insurer partners as well as explore potential market opportunities for both current and prospective clients.

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