3 Disruptive Tech Trends to Watch

Over the next two years, independent agents are concerned about the impact of emerging purchase channels like direct writers and non-insurance websites—but aren’t worried about disruptive trends like the sharing economy and driverless cars, according to the 2016 Future One Agency Universe Study.

But the trends the study cited aren’t the only ones that will impact the independent agency system over the next two years. Here are three other threats and opportunities that didn’t make the list, but still deserve your attention in the short term:

Big data. “New software programs are able to take an agency’s book of business, sift through it and make predictions about what type of coverage this person might need, or whether this person’s in danger of having a severe loss because of an impending weather event,” explains Jay Sarzen, senior analyst on the insurance team at Aite Group.

Barry Rabkin, founder and president of Market Insight Group, doesn’t expect agency owners and producers to ask themselves what kind of data-based applications they should run on a day-to-day basis.

“But I would expect them to ask, ‘What does this data tell me? How can I get more from my current clients? Who’s the next prospect? Where should I be prospecting?’” Rabkin says. “It would be immediate top-line revenue, either to get them new clients or to deepen their relationships with existing clients.”

Automation. Deb Smallwood, founder of Strategy Meets Action, says capabilities like minimal data capture will make agents’ lives significantly easier even in the short term. But eventually, they could also streamline small commercial lines in a way that threatens the agent’s role.

“Right now, it’s very cumbersome for an agent to submit a policy, especially in commercial lines,” Smallwood points out. “And it’s very cumbersome for a company to put in all the data necessary for something like workers comp. But with pre-fill capability, if agents could go on and enter in four fields and have completed ACORD apps for work comp, auto, all that stuff—that is quickly going to move to self-service for small businesses.”

InsurTech startups. Strategy Meets Action is currently tracking about 500 startups in the InsurTech space—and Smallwood says up to one-third of them are in the distribution area. “We’re going to see more MGAs, we’re going to see more comparative raters and we’re going to see more new kinds of brokers,”
she predicts.

With the launch of Lemonade a few months in the rearview mirror, “there are some new players out in the landscape that could begin to shift people’s mindsets about the concept of insurance,” Sarzen agrees. “The real challenge to that, of course, is that it’s a pretty frictionless purchase experience—flip open your tablet and there you go. That could turn quickly against agents.”

Jacquelyn Connelly is IA senior editor.