These days, several major transitions are occurring simultaneously to create both opportunities and challenges for independent agencies.
Consumer expectations and communications preferences are changing, and hybrid digital/personal relationships are creating enhanced experiences for consumers. In addition, agencies have more choices regarding how they organize, the technologies they decide to utilize and whether they outsource or not.
As a result, the attributes of agency managers of the future will likely have to evolve to succeed in this changed world.
Consumers Habits
In the next five years, millennials—those born in the 1980s and 1990s—will become a major client segment for most agencies, and for some agents, they already are.
Millennial consumers grew up with technology and expect to interact with their business partners when and how they choose—not in the manner that the business partner chooses. They may prefer using texting, mobile applications and social media over traditional methods such as email.
But the desire to have communication choices is not confined to just millennials. A transition in communication preferences is occurring across all generations to some extent, requiring innovative agencies to offer several communication options to clients and to maintain these preferences in their systems.
Agencies have the challenge of managing multiple forms of communications with clients at varying stages of transition to new communication methods. It would be ideal for agency management system vendors to make it easy for agents to retain these preferences in their systems and to integrate with all of the innovative forms of communication, so agents can effectively keep a record of these conversations.
In addition, consumers increasingly want to research online and perform other self-service transactions when they want to, as well as to consult with an agent when appropriate.
Having a personal connection with the client is becoming even more important at this time of growing mistrust of large institutions and government, and independent agents excel at creating these relationships. Agencies, however, will need to free themselves significantly from routine processes using automation and may want to consider outsourcing these tasks, so they can focus on creating enduring relationships as trusted advisors.
“Era of Experience”
At the Big “I” Leadership Conference this past fall, James McQuivey of Forrester Research discussed how we have entered the “era of experience,” where personal customer relationships are being enhanced by digital components that add value.
For example, if an agency has contractor clients, having the ability for those contractors to issue routine certificates of insurance on the agency’s website, 24/7, according to preset agency parameters, is a highly-valued enhancement to the traditional agency relationship. Another example is provided by those agencies that kept clients well-informed during last year’s natural disasters through social media, taking advantage of its capability to deliver multiple messages to a broad audience instantly.
McQuivey emphasized that the personal relationship based on trust remains a core part of these evolving digital/personal relationships. The opportunity and challenge for agencies is to use digital tools to enhance the relationships they provide their clients, while using the automation provided to them by their agency management systems, Download, Real Time and electronic filing, so they can provide more time to staff to develop a binding personal connection with each client.
Demographic Changes
Many communities are becoming more diverse. The opportunity and challenge for independent agencies is to reach out and develop personal relationships with these different groups.
Some agencies are hiring producers from the various ethnic groups in their community because these producers understand the culture of particular groups, speak their language and know how they want to interact with the agency—whether they want to come to the agency, have agents visit them or deal remotely using email, phone and the other digital communications.
Changes in Agencies
Over the next 10 years, as many as 50% of current agency employees and principals are expected to retire. How can agencies create an attractive work environment for the future generations who expect to have efficient and integrated technologies available to them?
Agencies have more choices than ever before in how they organize for the future. They are able to decentralize into very local offices to be even closer to consumers because of technology that can bind multiple offices together and allow producers and other employees to operate from anywhere.
In today’s mobile world, producers spend more time in the field and use agency offices only when needed for conferences. Many agency employees are able to work from home, opening up new opportunities to hire employees who want and need a more flexible work environment.
Outsourcing functions to third parties that are highly efficient and have targeted expertise is becoming a trend among businesses in general. These outsourcing firms may employ domestic and foreign workers. It’s likely agencies will outsource more in the future, as they have already started to do with their technology and routine processing such as policy and download checking.
Challenge to Agency Managers
The requirements for effective agency management are also evolving. Agency strategic planning has become more important today as agencies have more options with regard to how they will organize and operate in the future. Managers may need to take advantage of more business intelligence tools in order to effectively manage a more distributed workforce and potentially outsourced non-core functions.
Future managers may consider how to create an online brand and digital/personal relationship with their clients that effectively differentiates their agency from their competitors.
In addition, these managers may need to maximize technology, so routine processes are automated and employees have time to develop lasting personal relationships with clients.