Insurance Carrier CEOs Urge Agents to Take Tech Seriously

As venture capitalists continue pouring more money into InsurTech startups like Lemonade and Trove, should you consider all your clients flight risks? Yes and no, according to top insurance carrier leaders.

During this morning’s General Session Breakfast at the Big “I” Legislative Conference, Bob Rusbuldt, Big “I” president & CEO, moderated a panel featuring Mark Berven, president & COO, Nationwide property-casualty; Tricia Griffith, president & CEO, Progressive; Bruce Kelley, president, CEO & treasurer, EMC Insurance Companies; and Gregory Murphy, chairman & CEO, Selective Insurance Group, Inc.

Rusbuldt asked the panelists to share their thoughts on several big-picture issues that are currently affecting the insurance industry—and what independent agents need to do to stay on top of the competition.

Rusbuldt: Let’s talk about these so-called disruptors. Are they passing fads, or is it real this time because of the InsurTech phenomenon?

Griffith: I believe Progressive is on the forefront. Although we knew it would cause some angst at least initially when we opened up on the direct side, we knew it had to be about the customer—where, when and how customers want to shop. I’ve talked to the guys from Lemonade. It’s a concept that’s really about the customer. I don’t want to foreshadow how I think that will turn out, but we have to be thinking, from an opportunity or threat perspective, what do customers want? They want that quick claim. We need to understand that and not dismiss InsurTech and FinTech. I don’t think we should overreact, but I think we should think about, “Why are they existing, starting, getting funded? What is it that they have, and what are they creating that we couldn’t?”

Kelley: InsurTech is critical because of all the big data we have. We would like to harness that for the benefit of the agents so that together, we can sell more business at a better price and a better selection. It’s going to level the playing field because data won’t be the property of solely large companies. Everyone can benefit from it. All these InsurTech startups, some will fail and some will succeed. We want to know what’s going on so we can see which ones might help agents.

Murphy: We are pushing our agents hard right now from a customer experience standpoint. The customer experience is shared between you and us. You have to be able to service small customers, medium customers and large customers. Someone is gunning for your small business. Why? You’re not servicing them in a 24-hour environment, the experience is clunky, etc. We put the customer at the head of the table and our agents are moving in that direction, but it’s been a bit of a rock up a hill. We talk to our agents and a lot of them say, “I know my customer, I know my customer service, I’m good.” If you’re sitting there thinking that right now, you’ve got to think differently, because somebody’s gunning for your small business right now.

Berven: There’s a ton of digital distribution, and whether it’s Trove or Lemonade, what they’re doing next is teaming with tech folks who are trying to provide solutions for issues customers need. I think why you see carriers continually scan the horizon of distribution—what customers need and what’s best for them is constantly changing.

Rusbuldt: What’s the future of autonomous cars? What are you doing to prepare for this developing phenomena, and what do agents need to know?

Griffith: I don’t want to put my head in the sand and say it’s going to be a long time from now, but it’s going to be a long time from now. Until recently, new cars were being purchased at about 17.5 million a year. That’s gone down a little bit. The average fleet is about 11.5 years, so to get any sort of change in the fleet takes a really long time. I think autonomous cars will be great for society, that’s important, but vehicle to vehicle, vehicle to infrastructure—that’s going to take a long time, especially with how slowly things can be regulated. If I had to guess the order of priority in terms of more autonomy, I’d have to guess it would be transportation network companies, public and commercial, because that’s really where it would be in terms of the labor.

Berven: Think about all the information that’s available from the vehicle today—the same thing that’s happening with sensors on the residential and commercial sides. I think you’re going to see an explosion of product development in this area as you see more usage, and that provides a tremendous amount of opportunity. At the end of the day, they try to scare you about how you’re going to see revenue drop from an auto perspective. All the data and information that’s coming about, the cyber coverages that come around, all the sensor information that’s available across all kinds of dynamics today—who is going to be the key aggregators of that information? As carriers, we are then going to be able to provide new products and solutions and put those into the hands of distribution to solve the needs consumers are going to have in this changing environment we’re living in.

Kelley: I would just add that roads are going to be smarter, sensors are going to be developed and this information will be used throughout the industry on the claims side to help people get key information on how to drive smarter.

Rusbuldt: Being an independent agent is one of the best career opportunities of any profession—we offer flexibility, community involvement, helping people in their greatest times of need. What is our problem attracting talent to this industry?

Murphy: Focus on safety management issues. We put lives back together and we are a form of capital and we are becoming more tech-enabled through digital and mobile. Those are the things that will attract people to the business. We need to continue to promote the positives. There’s a lot we do that’s great, and we need to continue to promote that on the college campus level.

Kelley: Go to the universities, get programs there and work on recruiting folks from there. But then once you get folks to the company, you treat them right. You provide them with good benefits. You provide a good working environment. You provide a way they can work together for common goals.

Griffith: When I think about my career, I’ve done so many different things. It isn’t all about one thing or another. As an agent, what an incredible job and what a difference you’re making in the lives of your customers. We could do a better job marketing and start at the lower level to show insurance is fun and exciting. Sometimes I have a hard time recruiting, but then we bring people in and they see it and they say, “Oh my gosh, the depth of analytics the depth of service—this is exciting.” They just have to see it.

Berven: We’ve got a really unique opportunity as an industry, both on the distribution and carrier side, to think about millennials. We continue to see in the research that for millennials, it’s about having a mission, purpose and connection. What we do in our business is a noble purpose. We help people and businesses recover the best that money can, but also what we do as an industry to raise up communities. We just have to do a better job communicating that.

Jacquelyn Connelly is IA senior editor.