After this year’s Oscar nominations were announced, I was watching a TV interview with Martin Scorsese about his latest movie, Hugo. Scorsese is 69 years old and the writer, director and producer of such great flicks as Mean Streets (1973), Alice Doesn’t Live Here Anymore (1974), Taxi Driver (1976), Raging Bull (1980), Last Temptation of Christ (1988), Goodfellas (1990), Casino (1995), Gangs of New York (2002), The Aviator (2004), The Departed (2006) and Shine a Light (2008). In this humble chairman’s opinion, all great movies. Anyone who is a fan could spot one of his movies in a second. The stories are different but all retain a grizzly kind of feel. That’s always been his style, and over the years it has made him incredibly successful.
The interview centered around how moviegoers had changed and what he was doing to recognize that. Hugo, a kid’s adventure movie, is probably the biggest departure from his past efforts. Much of it was shot in 3D and it is homage to his 12-year-old daughter—someone who helped him understand that he needed to learn a few new things in order to attract the audiences of the future.
Since that interview, I have been spending a lot of time thinking about how the very same thing is going on in the insurance industry, and how, just like the movie business, it’s necessary for us to change in order to meet the shopping demands of our customers. IIABA’s Agency Universe Study now indicates that 74% of consumers use the Internet at some point when looking for auto insurance. We know that social media is everywhere. There are 845 million Facebook users, 100 million LinkedIn users, and 380 million people on Twitter. As an industry, the independent agent distribution channel has been slow to react. There are likely many reasons for this, including the expense and the complicated nature of search engine optimization. The biggest reason, however, may be that many of us are old! There are two million people in our business today, and in the next 10 years, 30% to 50% of us will be gone.
Like Scorsese, we’ve been successful doing things the way we’ve done them for years and haven’t always bought into the new buying methods used by the customer of the future. Some of us may have missed this social media revolution and so the urgency of making this change is more difficult for us to grasp. We may have hoped that things would move slowly, but that’s not the case.
IIABA is trying to help by its involvement in developing CAP (Consumer Agent Portal), a program that utilizes our consumer brand, Trusted Choice®. Our numbers—22,000 agencies, 300,000 individual members, 51 state associations—our companies and all of our Facebook, Linkedin and Twitter followers help to improve our footprint on the Web and ultimately deliver customers to our door in a new way.
Several years ago, I was asked to take part in a panel discussion on the use of social media in the insurance business. I remember receiving a call from my son Patrick, a college student at the time, who asked what I was doing. When I said I was on a social media panel, he laughed and said, “What do you know about social media? All you need to understand is that you have money! Hire some young people and get out of their way!”
During our last board meeting, I witnessed what he meant. Jason Cass, CIC, the chairperson of our Young Agents Committee and one of the first adapters for CAP, demonstrated how this product was working for him. He showed us how he is building his agency’s taking advantage of social media tools and digital marketing, and shared the results of his efforts. It was fascinating, and he got the attention of our group of questioning white hairs. During his trial period, Jason generated 19 new referrals. Five didn’t fit his agency’s internal underwriting philosophy, 14 received proposals, eight bought on the spot and six others committed to buy within the next six weeks. During this short window, he had generated $28,000 in premium and $4,200 in annual commission, and he cleared $3,275 in profit after expenses. That’s a 202% first year ROI. Now that’s something I understand!
Like Martin Scorsese, it took a young person to help me see the future. It is new and it is scary, but it is what we must do. The new generation of consumers is proving that this is the way they are going to buy.
So hire some young guys and get out of the way. My son is a genius; he gets his brains from his mother.
—Michael Donohoe, Big “I” Chairman