To thrive in the future, independent agencies need to adopt digital ways of doing business. Today’s consumers expect a streamlined digital experience—from learning about an agency and buying insurance to getting service for their policies.
Following are four key insights to help you plan for and navigate your agency’s digital future.
1. Digital drives growth, particularly when it comes to these seven capabilities
Agencies that embrace a wide range of digital tools and tactics tend to grow faster than others. A Liberty Mutual and Safeco survey of nearly 600 independent insurance agents found that agencies with high digital adoption grow 60% faster on average than those with limited digital adoption, regardless of agency size, location or focus.
Of the many digital capabilities available to agencies, seven are highly correlated with revenue growth:
- Social media
- Online quotes
- Self-serve portal
- Live online chat
- Paid social-media ads
- Video quotes and policy reviews
- AI and chatbots
These seven capabilities form a hierarchy, ranging from the most fundamental tools (like a social-media presence and online quoting) to the most innovative (like video quotes and chatbots). High-growth agencies build up from the fundamental capabilities to the most innovative—and that commitment to digital plays a key role in their above-average growth.
2. Agency marketing has reached a tipping point in the transition to digital
Most agencies are planning to increase their investments in digital marketing in the coming year, including those that currently have limited digital capabilities.
COVID-19 has played a huge role in hastening the transition to digital by making in-person interactions much more challenging—if not impossible. Many agents we surveyed said they had seen an uptick in business from their digital marketing efforts, and those who already had a strong presence on digital channels before the pandemic felt this early adoption gave them a significant advantage over their competitors.
3. Video as a sales and service tool remains a largely untapped opportunity
Presenting quotes and reviewing policies on video adds a personal touch, nurturing client trust and loyalty. However, few agencies take full advantage of this opportunity. Even among high digital adopters, fewer than half of them use video as a sales and service tool. Agents who do use video say it brings a personal touch to digital interactions and helps them build strong relationships with clients.
4. Digitally savvy agencies have a wider geographic reach
Agencies that embrace digital are much more effective at serving clients remotely, so they’re less bound to their physical location. Nearly half of high digital-adoption agencies indicated that digital has allowed them to broaden the geographic area in which they acquire new clients and hire talent.
Make digital a priority today
Digital capabilities will never replace in-person relationships, but the right tools used in the right ways hold tremendous potential to help your agency grow while enriching its relationship with existing customers.
Carl Canales is the senior vice president & field executive of the Northeast Region for Liberty Mutual Business Lines and Safeco Insurance, which recently released the results of a survey of 600 agents and brokers about the digital capabilities they use and how they impact their businesses (Rise of the Digital Insurance Agency). Carl is responsible for the growth and profitability of Safeco’s personal lines and Liberty Mutual’s business lines within the region He has been in the insurance industry since 2001, most recently as Safeco’s Northeast region general manager. He served prior executive roles in Liberty Mutual commercial lines underwriting, distribution, agency and broker strategy, and marketing.