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Understanding Biases in Insurance Distribution to Overcome Them

Across the independent insurance agency channel, agents, carriers and InsurTechs each have an opinion about how everyone else is embracing change and adopting technology.
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understanding biases in insurance distribution to overcome them

Bias shows up in nearly every facet of our lives and has a real impact on our behaviors, whether consciously or unconsciously. Presuming we are insulated from bias in our industry would be short-sighted and counterproductive. Identifying bias, understanding the impact and acknowledging how it shapes our perceptions is critical to collaboration, inclusivity and meaningful change in our industry. 

Across the independent insurance agency channel, agents, carriers and InsurTechs each have an opinion about how everyone else is embracing change and adopting technology. These opinions vary based on a company’s strategy and where they are on the technology continuum. Yet, in the spirit of walking in each other’s shoes rather than entertaining dangerous biases that stall progress and profitability, there is value in taking a moment to identify our thoughts so they can be addressed.

Here are some examples of these biases:

Agents. They still carry some bias and insecurity that technology can lead to more direct-to-consumer options, questioning not only their value but whether other stakeholders will value what they offer in the long term. This can lead to believing that a single piece of technology is a silver bullet, short-sighted decisions or inaction.

InsurTechs. They can be biased by the overarching sentiment that carriers don’t get it—don’t understand the tech, underestimate the demands of agents and customers, simply don’t want to change, and on the other end of the spectrum, have seemingly infinite funding available. 

Carriers. They can carry a bias that agencies are slow to adapt to customer needs or make investments in growth initiatives. They sometimes also believe some technology companies are unaware of the economics of the industry, despite their intention to displace or become an insurer.

While some of this is hyperbolic, the sentiments continue to bubble in and around the industry. The good news, however, is that it is all starting to coalesce, and these stakeholders are working together to sort through the epic levels of challenge, change and opportunity. 

Here are some of the positive trends that negative bias can overshadow:

Agents. They are largely welcoming of technology that supports their business plans, creates efficiency, reduces expenses, eliminates multiple entry, improves quote quality, and makes billing and endorsements faster and more accurate, all of which ultimately enables growth and profitability.

InsurTechs. The thriving firms have a solid “why,” understand our industry and are focused on true enablement and value creation.

Carriers. In larger numbers, they are embracing direct connectivity, working on externally facing application programming interfaces (APIs), and partnering with tech firms and agencies for the overall benefit of customers, agents and employees.

While there may be some light emerging at the end of the proverbial tunnel, it is still prudent for all stakeholders to remain focused on managing their biases in the interest of the overall good. A little tension is healthy and provides real fuel for change and adoption. But in the grand scheme of things we are all on the same team. 

By taking an objective refresher on the economics of our business, considering the challenges and opportunities for stakeholders, and accepting that we have inherent bias and that our biases may be misplaced, we can make meaningful and collaborative gains to address the customer’s needs and the overall health of agents, carriers and technology providers.

Chris Cline is executive director of the Big “I” Agents Council for Technology

Being intentional about biases is incredibly powerful. To engage in discussions about how to remain objective, attend the ACT Tech Summit on Oct. 2, co-locating with ACT supporting member Applied Systems at AppliedNet 2022 at the Opryland Resort and Convention Center in Nashville, Tennessee.

Thursday, September 1, 2022