Agents Take Note: Four Trends Reshaping the 2022 Insurance Market

By expanding their focus on digital solutions beyond just improving work processes and factoring it into larger growth strategies, agents can remain competitive and excel in the current market.

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There’s something new happening this year in insurance. Expect the discussion about technology to expand in 2022. In prior years, technology was all about efficiency and solving customer problems. Now it’s evolving to be about growth: uncovering new opportunities and breaking into new markets. Technology is continuing to tee up lucrative opportunities for agents. Supplemental products like renters and pet insurance are easier and faster to sell. Digital carriers are becoming more recognized—by agents and consumers. At the same time, the role of the agent is a major focus, particularly for carriers originally founded on selling direct-to-consumer.

Here are four trends with significant impact on the insurance market in the coming year.

  1. Digital carriers become household names. Consumers are clearly more comfortable buying policies from new carriers, and agents are open to offering their products. Consider this: according to S&P Global, the year-over-year growth for Lemonade and Hippo was the highest in the industry for companies with at least $50 million in quarterly premiums. New technologies are enabling digital insurers to put their products in front of large numbers of agents quickly, giving agents easy and fast access to those offerings. And for many, the convenience factor and speed-to-market are opening doors to working with new carriers.

An agent’s top priority is making sure customers get the right coverage at a competitive price. While it may feel comfortable going to the same three carriers for a particular risk, explore some of the newer options. Not only do many offer coverage similar to established insurers, but digital first approaches offer stellar customer service. Solutions that match agents with carrier appetites can be winning opportunities. Many of these platforms partner with a wide range of insurers and make it easy to review all product options.

  1. Expect big gains in supplementary products. Data analytics is helping agents uncover opportunities in their customer bases, such as car owners who rent, homeowners with pets, and small businesses that lack cyber protection. It’s an important opportunity as many of these categories are growing rapidly. For example, some people are trading homeownership for renting, and they’re shopping for new insurance, according to JD Power. While in the past, selling supplemental policies manually often took too much time, technology is enabling agents to sell lower revenue products in higher volumes.

Agents can leverage supplemental products as a way to nurture prospects and create customer longevity. A person who buys car insurance through an agent may also rent an apartment. If the agent helps them with renters’ insurance, when that person is ready to purchase a home, they know exactly where to go for coverage.

Data analytics solutions that take advantage of information in the agent’s agency management system can make it easy to uncover new business opportunities for supplemental products. The  tools can identify small business customers that might have BOP policies but lack adequate cyber protection for their cyber risk, for example.

  1. We’ll see fewer barriers for start-up agencies. The barriers to starting an agency from scratch are lower than ever. The pandemic has also created virtual opportunities; agencies are not bound by location and can operate in states where they know the customers have an appetite for certain types of insurance. Technology also makes carrier appointments easier, enabling agents to begin working with more carriers quickly and easily.

Independent agent doesn’t have to mean local operations only. Customers are more comfortable buying services virtually. If agents can have a robust online presence to make themselves known and can respond quickly to incoming requests, they can win prospects over. They should also take advantage of videoconferencing tools to build trust with prospects and begin laying the foundation for strong relationships.

  1. The independent agent model advances even further. For years, many people have talked about the end of the independent agent model. That discussion is moot, as more and more carriers and consumers recognize the value the agent brings. Expect the independent agent channel to get stronger as more carriers—including digital carriers that were founded on direct-to-consumer models—see growth in agent distribution. In addition, legacy carriers with captive agents will follow the path of Nationwide and Liberty Mutual, enabling agents to sell coverage from additional insurers. According to McKinsey there has been a 32 percent decline in captive agents.

For independent agents 2022 brings new opportunities to create new business and partnerships. And if you’re a captive agent with the opportunity to transition to become independent, now could be the time. Consumers want guidance and choice when it comes to their insurance coverage and independent agents are in the unique position to be able to offer both.

But maintaining the status quo isn’t enough. Just because the independent agent channel is strong doesn’t mean there isn’t competition. While direct-to-consumer models might not be an imminent threat, there will be strong competition from other independent agents who offer a more technology enabled and on-demand customer experience. Agents need to continue to adopt tools such as mobile applications and single click purchasing that give customers the experience they desire.

There are more opportunities than ever before for insurance agents driven by technology that enables them to scale faster. By expanding their focus on digital solutions beyond just improving work processes and factoring it into larger growth strategies, agents can remain competitive and excel in the current market.

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Ido Deutsch // Ido Deutsch is vice president of growth at Agentero, a digital insurance network.

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