When it comes to property-casualty insurance products, the options seem endless. Here's how to narrow them down.
The plethora of property-casualty insurance products available to offer to clients may have independent agents feeling like they just walked into a candy shop. Chocolates? Caramels? Lollipops? With so many options, it's not hard to blow all your pocket money.
Although agents are on their own picking between toffee and fudge, Tom Wimberly, vice president and leader of Agile Business Accelerator at Aon Affinity, says that when it comes to p-c insurance products, it's crucial to consider the emerging macrotrends driving the industry and the digital delivery options before choosing a product to add to your agency lineup.
“Agencies are investing in digital transformation because their clients and policyholders are demanding a simpler and quicker application-to-bind process," Wimberly says. However, the pull toward digitalization is rippling into underwriting.
“When you're introducing the digital tools, there tends to be less client and agent interaction than occurred in the past. And, therefore, there are less deep conversations with their policyholders to explain what the coverage is," he says. “You've got to simplify the process, and that includes simplification of underwriting."
As new digital products make agents' jobs less of a rocky road, “we're also seeing new product development in terms of products that are being created to meet the evolving needs of the marketplace," Wimberly says. “So, for example, more parametric products."
“It's something everyone wants because they want more coverage options and they want simplicity from an underwriting and claims perspective provided by parametric's pre-specified payouts based upon a trigger event" he adds, “and parametric products can be bought digitally a lot easier than others because there are less stringent underwriting rating requirements."
COVID-19 also boosted interest from individuals around “products that would allow for three months of income in case of a job loss," Wimberly says. “Across the board, data, privacy and cyber have become even bigger concerns than previously, so we're seeing a lot of uptick in terms of interest and new products being introduced that are directed toward income protection."
Along with ensuring the proper errors & omissions coverage is in place before providing any new offerings, here are three steps agencies can take to evaluate which products trends they should invest in:
1) Evaluate client needs. Ultimately, the key to success is “to be truly understanding of how your clients are doing and how you can offer help," Wimberly says. “With new insurance offerings, the increase in digitization and the underwriting trends that have occurred recently, agents have new and valuable offerings to discuss with their clients when they reach out."
2) Determine partner offerings. As agencies provide products to clients, Wimberly suggests evaluating the product's take-up rate. “How many clients have considered the products offered versus how much premium and how many policies have been sold in the past week, month and year?"
Wimberly also suggests that it is better when the product has been designed with simplicity. “How long does it take to explain the whole product? For example, four years ago, the value of cyber coverage was hard to explain. In 2021, most clients understand the value immediately." he adds.
3) Monitor success after implementation. “The client's reaction is a primary indicator, along with whether or not a product is renewed for the next year," Wimberly says. By noting ongoing interest in the new product offering, telling client success stories and building a case that the agent is uniquely positioned to help clients as the industry evolves, agencies can adjust, and, if necessary, return to the candy shop with a more finely tuned palate.
AnneMarie McPherson is IA news editor.