Will Automation in the Insurance Industry Reduce Face-to-Face Selling for Independent Agents? No. Here’s Why
Written by the Agent Clearcover Team | October 25th, 2021
Face-to-face meetings and personal interaction are a crucial component of the relationship marketing mix that independent agents and brokers use to engage clients. But both strategies took a big hit during the pandemic.
While tech innovation in the insurance industry sped up to meet increasing demand and customer needs, many independent agents had to adapt quickly.
Clearcover polled 475 independent agents and brokers to learn more.* We also interviewed independent insurance agent Alex Settlemoir of S&S Insurance Group in St. Louis, Missouri, for more direct insight to what agents are experiencing in the field.
Here’s what we discovered: Relationship selling in the insurance industry isn’t going away anytime soon—even with increased automation.
Personal interaction with clients is here to stay, and here’s why.
COVID-19 sped up digital innovation in the insurance industry
The overwhelming majority of agents we surveyed (96%) report that their insurance customers are looking for more digital tools now than they were pre-pandemic. (Read more about how COVID-19 affected independent insurance agents.)
Increasingly, insurance customers are not only seeking more automation as part of their insurance experience, they are expecting it.
Want to know how that shakes out in the real world? Take a look at this chart.
This is where insurance customers expect automation as part of the insurance purchasing process:
Insurance selection: 56%
Application: 53%
Purchase: 50%
Initial quote: 36%
Determining/comparing providers: 33%
Post-purchase: 33%
None of the above: 1%
Despite the rise in automation, the majority of agents we polled (61%) are confident that independent agents will always be necessary and useful within the insurance industry. In fact, that’s why we took time to talk to Alex Settlemoir about his experience as an independent agent.
“Face-to-face [and personal interaction] is important for trust-building and building connections with people,” reports Alex.
Agents in the field are seeing—even with customers seeking out more automation, and tech trends in the insurance industry driving those expectations—that insurance customers still want and need the expert guidance of independent agents. (And so do insurtech startups.)
Customers prefer automation for some insurance tasks—but not all
While insurance customers are increasingly looking to automation in the insurance industry for a more streamlined purchasing experience, only 33% of agents reported that their clients expect or prefer automation when comparing providers.
That’s a clear signal that 67% of customers prefer the expert help of agents when comparing their insurance options.
Below is the breakdown of exactly where customers want to experience the expertise of agents in their insurance-purchasing process.
(A quick pause here to clarify: In the above section, we reported where customers expect automation in their insurance-purchasing process. Now, we’re talking about where customers want the expertise of agents alongside automation.)
Here’s where today’s car insurance customers especially want the help of an agent:
Insurance selection: 47%
Purchase: 45%
Application: 45%
Post-purchase: 39%
Determining/comparing providers: 35%
Initial quote: 32%
None of the above: 2%
It’s notable that only 2% of customers prefer not to work with an insurance agent at any point in the process.
“When it comes to selecting insurance or switching over a policy, [customers] want to talk to somebody,” Alex confirms.
“Just hearing someone’s voice or seeing someone in person can help you walk through getting information on a prospective client’s insurance needs in a better way.… It definitely can make the client more comfortable, but it also helps them feel more confident in what they’re buying.”
In short? Relationship selling (and personal interaction with independent agents) isn’t disappearing—now or any time soon.
Face-to-face interaction is important—even in the automated insurance-purchasing process
Even with increased client demand for automation in the insurance industry, agents report that personal interaction with clients—whether through digital communication or in person—continues to be an important part of their work.
“Our company has used tech advancement to our advantage,” adds Alex. “[The insurance industry] is long overdue for some changes from an agent perspective—and it’s great to see it happening.”
While 88% of agents surveyed say that customers still want to meet in person when purchasing insurance, 91% see this changing within the next 5 years. Currently, more than half of agents (51%) say they meet in person with clients. Alex estimates that 90% of his business with clients is done over the phone.
“Automation has helped us more than challenged us,” Alex adds. “When you have an older clientele used to paying in person—and there are customers who still like to pay in person—they still want to do things the old way, so they might need assistance getting the grasp of the technology aspect. We coach them through the process... and that’s a big asset to clients.”
Here are the ways agents report communicating regularly with their clients:
65% talk to customers on the phone.
60% email their customers.
51% see their customers in person.
45% communicate with customers via text messaging.
13% use an online chatbot to communicate with customers.
It’s important to note that 45% of agents surveyed are text messaging with clients. Agents are already adapting to customers’ communication preferences—and many customers prefer text messaging.
And even though Alex’s agency does most of its business over the phone, he reported recently being able to save the bartender at a local restaurant $100 per month on her daughter’s insurance—just by striking up a friendly dinner conversation and answering some important insurance questions she asked. Face-to-face and personal interaction matters.
Overall, Alex sees increased customer demand for automation and innovation as opportunity. “It’s helped us with ease of selling with better tools on the agent side. The easier and more clear cut [the experience] is, the faster it is to make sales. Simplifying things for clients makes a big difference.”
Grow your agency with Clearcover, the auto insurtech partner that puts customers in control
Clearcover has a quick and easy quote and binding experience, so you can focus on face-to-face personal interaction and guiding customers to the best choices for their needs. And if your customers are looking for more automation, better support, and one of the fastest claims processing times in the auto insurance industry, Clearcover has it.
And sure, we might be a bit biased, so here’s Alex’s take: “In the case of Clearcover, every one of the clients we sign up are 100% confident in their insurance—and that’s what we want.”
And why are his customers confident?
“There are two reasons,” Alex explains. “One: An agent’s confidence in the company—that energy, people can really feel that. And two…. When they download the app and see that they can make changes by themselves, that’s a big thing for clients.”
Clearcover provides an auto insurance experience that both agents and customers love. Request an appointment with Clearcover today. If you’re already with Clearcover, you can login to the agent portal.
*We polled 475 independent insurance agents and brokers in August 2021 with 475 total respondents. The survey was conducted at 95% confidence, +/- 4% margin of error.
