Running an insurance agency amid tough technology-led competition is no child’s play. Compared to other industry verticals, the insurance sector has long been managing its operations manually.
According to Deloitte’s 2023 Insurance Outlook report, there is a need for pivoting to long-term reinvention. Unless agencies are willing to leverage digitalization at a quicker pace, they may have to bury themselves under piles of paperwork, productivity challenges, and complex balance sheets.
Thankfully, the business landscape is steadily changing as software providers are offering robust solutions for a strong digital infrastructure. Insurance agency management systems are increasing the efficiency of operations for agents.
In this article, we will discuss the five main benefits that these systems offer to keep abreast with the evolving market.
The Need for Agency Management Systems
The insurance industry faces a unique set of challenges owing to its nature of business. These include –
- Rising operational costs
- Product-service innovation
- Organizational agility
- Strategic business intelligence for customer engagements
- Regulatory uncertainty
Since selling insurance is complicated, agencies require solid sales and marketing efforts along with a centralized system for the organization. Though the idea of InsurTech has not been dismissed altogether, it is yet to be adopted at a wider scale. For the most part, the system has been restricted to record keepers.
Given the time and resources needed to run lengthy audits, manual record-keeping has kept productivity low and sale numbers limited. Agency management systems offer the required integration for sales automation.
Key Benefits of Agency Management Systems
According to Verified Market Reports, the insurance agency management systems market is expected to grow at a CAGR of 8.9% until 2027. It will gradually reach a net worth of $11.3 billion. More agencies are switching to these systems to meet customer demand for automated solutions.
Let’s understand the benefits of agency management systems in detail.
Better Customer Experience
Like all other sectors, insurance industry customers are becoming more discerning and demanding of personalized journeys. McKinsey’s 2023 Global Insurance Report stated that insurance is at a crossroads. The only way organizations can sell their products is through innovative customer-focused approaches.
Agencies need to offer omnichannel (personalized) engagement throughout a customer’s lifecycle. Up until now, this facility has been available for risk assessment to some extent. However, the future of insurance depends on personalized journeys for claims processing, product research, and sales.
Agency management systems provide customer journey builders to ensure clients have a satisfying interaction at different touchpoints. For instance – agents can use the software to visualize a prospect’s buying journey from start to end. This includes identifying drop-off areas, crucial pain points, etc.
As a result, sales pipeline leakage is reduced, enabling agencies to meet goal completion rates. Besides, the software supports all-around customer-centricity through tracking customer transactions, automating renewal alerts, and gathering data on claims settlement.
With timely access to such information, insurance agents can quickly spot areas of improvement and extend immediate client support. They can also stay on top of the trends and work proactively towards predicted demand.
Easy Policy Management and Tracking
One main reason behind the inefficiency of an insurance agency is the inability to keep track of customer documentation. It is indeed a cumbersome process susceptible to inaccuracies.
But, if an agency overcomes this challenge, securing business longevity and success becomes easier. It’s good news that agency management systems are designed to share this responsibility with insurance agents.
According to VRC Insurance Systems, the software keeps track of each policy in the pipeline right up to its exact position. This means agents can know when a policy is in the application process, when it is up for renewal, etc.
Apart from that, the system can be used to set automatic renewal alerts for both the agents and the customers. Agents can also have a bird’s eye view of the different insurers, various coverage types, and policy status. Such details provide more decision-making control to offer personalized and timely client support.
Enhanced Agent Productivity
Insurance agents often have to suffer from context switching, which kills their productivity. It is a process wherein an employee is forced to shift their attention between multiple tasks, apps, etc. With the time and mental effort it takes for context switching, there’s no motivation left for deep, meaningful work.
Studies have found that merely 20 minutes of interrupted work can increase stress and make employees overwhelmed with their workload. While it may not be possible to reduce the “excessive’ demand for attention, agents can leverage technology for preferred interruption tolerance.
The benefit of agency management systems in this area comes from the consolidation of workflow and communication processes onto a centralized platform. Click here to learn more about this process, including complex policy issuance enabled through customer and insurer data.
Also, the entire claims cycle can be managed at the tip of one’s fingers. Since half the burden is shared through automation, agents can focus on enhancing customer experiences. Not only is workload reduced, but agents also get to focus on what they do best (this improves overall efficiency).
Efficient Lead Nurturing and Sales Management
No business is immune to the possibility of high customer churn rates. But, proper lead nurturing and sales management can improve retention. Agency management systems can act as great tools to nurture leads through cross-selling and upselling. That means agents can dynamically develop a list of customers to pitch relevant complementary services.
But these practices depend upon the agents’ actions. What if they forget to connect with customers at the time of their policy renewal? Not only is there a risk of losing out on more sales, but also potential customers. The automated renewal alerts will further help nurture leads and boost customer lifetime value.
Moreover, agents can schedule sales activities after considering certain pre-determined factors such as policy issue date, time of renewal, etc. Let’s take an example – based on the automated workflow, the software can create customized lead forms.
Agents do not need to enter a new lead’s details manually as they will be transferred by the system itself. This gives them lucrative interaction opportunities to enhance sales.
Advanced Reporting and Analytics
Given the cut-throat competition, insurance agencies are always looking to extract more out of less. This makes it crucial to analyze reports for demand predictions. Granular customer data is a good portal to the organization’s operational metrics.
Agency management systems can be fed with the business’ custom reports to derive insights like profitable agents, renewal opportunities, and current progress. Listed below are the capabilities offered by the software’s in-depth analytics –
- Risk mitigation in the claims process
- Early identification of customers who may cancel their policies
- Easy control over business efficiency
- Accurate policy renewals, claims management, and accounting
- Tracking of insurance agents’ precise working hours
- Forecasting of pipelines and cash flows
- Detection of pain points
Closing Thoughts
When the above-mentioned benefits of agency management systems are put into perspective, agencies stand a better chance of reducing costs. According to McKinsey’s Digital Disruption in Insurance: Cutting through the Noise report, automation can reduce as much as 30% of the costs involved in the claims journey.
Digital disruption, although slow, is steadily reshaping the insurance sector. Agencies that are prepared to ride along tech-driven waves will be the only successful players in the future market.
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