Is Siri Really Going to Replace Your Insurance Agent? 
Look back 20-30 years ago and every family or consumer got to know their insurance agent through home visits.
The business model was predicated upon a small business owner (an "agent") who was active in the community, built relationships up over time and knew most of their customers on a first name basis.
There was no anonymity in the relationship, other than when you had a problem, you called your agent and she/he asked you to fill out a form for submission back to a more often than not, faceless corporate entity.
Tech is Now Baked in to the Insurance Industry as Never Before
In the early days you knew whom you were dealing with at least at the front end of any insurance based transaction or issue and the phone was the only technical product in the mix, with a fax machine coming into the picture later.
Fast forward to today and it's a mobile driven landscape for the consumer and the agents who make a living helping people offset the sharp corners life can throw at you.
For better or worse, technology has made "loyalty" a thing of the past for most consumers. Technology has changed the human to human equation; it's about saving money using the web to unearth a deal.
That's not all bad; but, insurance agents in many cases other than fulfilling a customer service role, are no longer part of the social fabric of your "local" community, other than at times a voice on the phone who at least knows who you are.
The Industry Model is Shifting like a Tsunami Sweeping Across the Pacific
Industry studies published 15-20 years ago when the web was not even in the vocabulary or in use (well maybe Arpanet geeks) and Facebook wasn't even a gleam in Mark Zuckerberg's eyes, indicated consumers valued buying insurance from agents representing multiple carriers.
That is no longer the case. Tech, disintermediation, the worldwide web et al have forever changed how consumers research and buy insurance online. It's digital warfare for your attention,
Google is now the digital gatekeeper in the insurance agent -- it's a log on and search world with an almost unlimited number of web portals battling for your insurance business. And, you have specialty web sites that cater to one particular type of insurance; i.e. home, auto, life, etc. - even pet insurance.
The Rise of the Electronic Exchange
Electronic exchanges are baked in to the business model and independent insurance agents have been kicked to the curb, which I don't think is a good thing in all cases.
But, insurance companies no longer need an agent to run, manage and stay in touch with people via an electronic exchange. And, like everything in life, technological sophistication enables rapid cost analysis and a cross check of features via multiple insurance carriers.
Tech's strength is its inherent sophistication for analysis, especially for an industry with lots of variables, price points and features like the insurance business.
We live in a market driven economy -- profit compressions via some carriers is forcing them to examine even a tenth of a percent as a mitigating factor and many think paying an insurance agent 12-20 percent commission as not a good thing for profits!
Insurance Carriers are in a Darwinian Fight to the Finish
For some carriers a fear of disintermediation in the industry is generating significant anxiety. They want to own the consumer, fear losing control of their books and are worried about agents "owning" a local market. And, as the market has shifted to brokers, banks, credit card companies, etc. selling insurance, they are worried about survival.
The facts underscore why some carriers should fear disintermediation. The variance in rates and lines in some geographic areas can be significant, especially when the consumer considers newer carriers versus those with a traditional model.
In terms of what's working as a business model, carriers may need to take a hard look at the travel industry and how tech impacted travel agents. Consumers in many cases lost the ability to deal with someone who had a personal vested interested in helping them do more than save money on a trip.
But, it's one thing to call up United and book a trip versus trying to wade through how to report a traffic accident with a miscreant with no insurance. Its not going to end well.
We Consumers Have Shifted the Model, not the Industry
Who is to blame for this molten mix of disintermediation? You are, we smartphone in hand consumers are all about deals and "service" is in many cases an afterthought. That's not all bad for consumers; but for smaller agencies the handwriting is on the wall.
Disintermediation will continue to wreak havoc on the industry, with downstream value being defined by consumer. Proactive businesses (enterprise/behemoth size or smaller) will survive this tidal wave by reinventing their models.
But, for most of you, don't expect to hang out with your local insurance agent this 4th of July -- she will in most cases working (like many of us) -- the only agent you may be able to reach will be "Siri" and she is always available.
Look back 20-30 years ago and every family or consumer got to know their insurance agent through home visits.
The business model was predicated upon a small business owner (an "agent") who was active in the community, built relationships up over time and knew most of their customers on a first name basis.
There was no anonymity in the relationship, other than when you had a problem, you called your agent and she/he asked you to fill out a form for submission back to a more often than not, faceless corporate entity.
Tech is Now Baked in to the Insurance Industry as Never Before
In the early days you knew whom you were dealing with at least at the front end of any insurance based transaction or issue and the phone was the only technical product in the mix, with a fax machine coming into the picture later.
Fast forward to today and it's a mobile driven landscape for the consumer and the agents who make a living helping people offset the sharp corners life can throw at you.
For better or worse, technology has made "loyalty" a thing of the past for most consumers. Technology has changed the human to human equation; it's about saving money using the web to unearth a deal.
That's not all bad; but, insurance agents in many cases other than fulfilling a customer service role, are no longer part of the social fabric of your "local" community, other than at times a voice on the phone who at least knows who you are.
The Industry Model is Shifting like a Tsunami Sweeping Across the Pacific
Industry studies published 15-20 years ago when the web was not even in the vocabulary or in use (well maybe Arpanet geeks) and Facebook wasn't even a gleam in Mark Zuckerberg's eyes, indicated consumers valued buying insurance from agents representing multiple carriers.
That is no longer the case. Tech, disintermediation, the worldwide web et al have forever changed how consumers research and buy insurance online. It's digital warfare for your attention,
Google is now the digital gatekeeper in the insurance agent -- it's a log on and search world with an almost unlimited number of web portals battling for your insurance business. And, you have specialty web sites that cater to one particular type of insurance; i.e. home, auto, life, etc. - even pet insurance.
The Rise of the Electronic Exchange
Electronic exchanges are baked in to the business model and independent insurance agents have been kicked to the curb, which I don't think is a good thing in all cases.
But, insurance companies no longer need an agent to run, manage and stay in touch with people via an electronic exchange. And, like everything in life, technological sophistication enables rapid cost analysis and a cross check of features via multiple insurance carriers.
Tech's strength is its inherent sophistication for analysis, especially for an industry with lots of variables, price points and features like the insurance business.
We live in a market driven economy -- profit compressions via some carriers is forcing them to examine even a tenth of a percent as a mitigating factor and many think paying an insurance agent 12-20 percent commission as not a good thing for profits!
Insurance Carriers are in a Darwinian Fight to the Finish
For some carriers a fear of disintermediation in the industry is generating significant anxiety. They want to own the consumer, fear losing control of their books and are worried about agents "owning" a local market. And, as the market has shifted to brokers, banks, credit card companies, etc. selling insurance, they are worried about survival.
The facts underscore why some carriers should fear disintermediation. The variance in rates and lines in some geographic areas can be significant, especially when the consumer considers newer carriers versus those with a traditional model.
In terms of what's working as a business model, carriers may need to take a hard look at the travel industry and how tech impacted travel agents. Consumers in many cases lost the ability to deal with someone who had a personal vested interested in helping them do more than save money on a trip.
But, it's one thing to call up United and book a trip versus trying to wade through how to report a traffic accident with a miscreant with no insurance. Its not going to end well.
We Consumers Have Shifted the Model, not the Industry
Who is to blame for this molten mix of disintermediation? You are, we smartphone in hand consumers are all about deals and "service" is in many cases an afterthought. That's not all bad for consumers; but for smaller agencies the handwriting is on the wall.
Disintermediation will continue to wreak havoc on the industry, with downstream value being defined by consumer. Proactive businesses (enterprise/behemoth size or smaller) will survive this tidal wave by reinventing their models.
But, for most of you, don't expect to hang out with your local insurance agent this 4th of July -- she will in most cases working (like many of us) -- the only agent you may be able to reach will be "Siri" and she is always available.
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