Should you be afraid of insurtech?

June 30, 2020

There are two things about insurance we know for sure right now: insurtech is here to stay and help innovate the industry, and there are still agencies that are resistant to adopting insurtech. 

This resistance from agencies seems to stem from the fear of the initial goal of insurtechs; originally thought to be removing the need for independent agents. 

As insurtechs have evolved, their views on agency relations have evolved with them. A majority of insurtechs are innovation focused rather than disruption-centric, and carrier support for insurtech has grown exponentially.  

So should you be afraid of insurtech? 

Let’s start by addressing the initial concern: how are insurtech solutions assisting agents and not replacing them? 

The fundamental core of relationships cannot be replaced by technology. People are seeking these relationships and are able to find them through independent agencies. Agencies are the experts on all things insurance. An insurtech solution’s goal should be to help agencies focus on risk management, helping clients, and making the agents’ day-to-day more efficient. 

Combining the knowledge of independent agents and the efficiency of technology leads to a recipe for success. Agents will be able to provide better service to their customers and enable them to more easily grow their book of business. It is a win-win for the agent and client. 

There are some insurtech solutions that may aim to replace agencies, but there are a lot more that try to build upon the agency model. Sourcing the right solutions for your agency is key.

But what about my legacy technology?

Another big misconception is that in order to adopt insurtech your company must rid itself of all legacy technology. Let’s break this down.

There is one main difference between insurtech and legacy tech. Insurtech solutions are constantly evolving, improving, and adapting, while legacy technology typically remains unchanged over long periods of time. In some cases it makes sense to replace a legacy tech solution with an insurtech solution, but in most situations this may not be feasible.

An insurtech does not need to replace your legacy tech, rather it can provide additional solutions to enhance the legacy tech already built in. 

How hard is it to transition from legacy technology?

The next question is always: is it hard to transition a company from legacy tech to insurtech? The only way to answer this question is… it depends.

Factors ranging from how large your agency is, to the bandwidth of your IT departments, can affect how the integration process flows. If you’ve found the right insurtech however, the company should be able to explain your unique process to you. 

What changes should I expect to see after implementing an insurtech solution?

Over the short term, you should expect to see the company and your employees become more efficient, which will provide the employees more time. You should account for a transition period for onboarding staff onto any new tech solutions you choose to integrate into your agency. This will allow for employees to learn new processes without feeling overwhelmed. 

Allowing the entire organization to be technically connected will change the landscape of insurance; making connectivity the biggest long term gain for your company.