Can your independent insurance agency compete with Amazon?

Can your independent insurance agency compete with Amazon?

Wednesday, October 17, 2018/Insureon Solutions, Industry Tips

Every few years, a report comes along and throws the insurance industry into a tizzy. In 2013, it was a McKinsey & Company study that proclaimed the death of the independent agent due to an increase in carriers’ direct-to-consumer sales. A year or so later, it was Big I’s Agency Universe Study sounding the alarm because of the number of principals closing in on retirement.

Now, the big story is Amazon. According to a report in The Guardian, the e-commerce giant may launch a price-comparison site in the United Kingdom.

Is Amazon poised to disrupt insurance the way it disrupted retail? Let’s take a closer look.

Why Amazon may succeed where others have failed

As The Guardian article points out, Amazon is simply testing the insurance waters. It has no immediate plans to launch a price-comparison site. However, the company’s “cutting-edge technology, reach, and loyal customer base” would make it a significant competitor if it decided to jump in.

A 2018 J.D. Power Pulse Survey, reported on in Insurance Journal, appears to support that perspective. It found:

  • 20 percent of consumers say they would use Google or Amazon for their home insurance.
  • 33 percent of millennials show interest in getting home insurance from Amazon.
  • 80 percent of all survey respondents already have coverage with a large national carrier.

That’s a hefty chunk of the personal lines premium that insurers may have to share with Amazon. Moreover, the increased competition may cause those premiums to drop.

Clearly, these results might be a headache for insurance providers, but they can be a problem for independent agents, too. Less overall premium may cause providers to cut back on your commissions. Worse? A successful Amazon site may make it harder to get business in your book.

How independent agents can prepare for HO disruption

Could Amazon’s disruption go the way of Google’s failed online insurance experiment? Perhaps. But change is coming. Agents who don’t prepare for it may not be able to compete.

At least some of that preparation involves coming to terms with the way Amazon’s technology has changed consumers. Modern clients expect:

  • Personalized service
  • More options
  • Proactive communications
  • Quick responses

Using the Insureon Solutions platform is one way to meet these expectations. Agents can see same-day quotes on 80 percent of submitted risks. Plus, our relationships with top admitted and non-admitted insurers mean your clients often get multiple quotes to compare. Recent updates to the agency portal also help you track clients through the entire sales cycle by:

  • Notifying you of certificate and endorsement requests
  • Confirming receipt of endorsements, policy documents, and other service requests
  • Informing you when policy or endorsement request statuses change

As an independent insurance agent, you have another card up your sleeve: your industry experience. Even modern consumers who tend to thoroughly research products prior to purchasing can end up bewildered by insurance. You can help clients navigate the complexity and find the policies that fit their risks. Live chat features and online meeting options can give your clients the fast response and personalized service they’re looking for.

Get more tips on how to stand out from the crowd in “Keep Your Agency Competitive – Focus on Customer Satisfaction.”