Independent advisors are the lifeblood of the insurance industry – prospecting, negotiating and selling policies. Advisors are the intermediaries between carriers and consumers.
With such an important part to play in the sector, it is imperative that advisors keep focusing on the many changes happening in the insurance world. Staying at the forefront of trends will ensure advisors will thrive in their practices.
Here are three developing trends that advisors to heed as they grow their businesses.
The rise of insurtechs.
Insurtechs are transforming the industry, providing an opportunity for independent advisors to scale their practices.
Insurtechs are providing a much-needed injection of innovation to the insurance model. They have leveraged technology and data analytics to create online platforms that streamline the application and underwriting process.
Today’s consumer wants transactions to be web-based and with minimal red tape (i.e. human interaction). Moreover, tech-savvy millennials are the largest living generation and are now between the high-earning ages of 25 and 40.
Insurtechs are delivering on these digital desires, which is why they are the future of the insurance industry.
The proof is in the funding.
In the first half of 2021 alone, global insurtech funding hit $7.4 billion according to Willis Towers Watson. That partial amount has already eclipsed annual insurtech funding from any year prior.
Among all the changes insurtechs are bringing to insurance, one of the biggest might be the massive direct-to-consumer opportunity they are presenting to independent agents and brokers.
Insurtechs have provided easy-to-use online platforms to buy insurance, and many never require anything in-person, like medical exams or face-to-face meetings.
Any consumer from any location can now apply for insurance products through these companies — all they need is an internet connection.
Historically working on a territory-based model with limitations, advisors have never had such a vast market to sell to.
Advisors must capitalize on the insurtech trend by working with these tech companies to grow their own personal books of business. And they can achieve this growth for just about any product sector of the industry as insurtechs pretty much have it all covered.
For example, Ethos has created an agent solution for life insurance, while Oscar has created a portal for brokers selling health insurance.
Breeze is also doing this for products such as disability insurance and critical illness insurance.
For the independent advisor, exploring opportunities with insurtechs could be a great way to reach a larger audience and scale their business in the years to come.
The rise of freelancers.
In 2021, many workers can complete the full duties of their job remotely. The COVID-19 pandemic forced everyone to realize this when many of us started working from home.
It has empowered workers to leave their jobs at higher rates in search of greener pastures; this trend has been dubbed “The Great Resignation.”
So where are the greener pastures? For many people, it’s found in self-employment. An Upwork survey of 4,000 U.S. professionals found “20%, or 10 million Americans, are considering freelancing. Among those, 73% cite the ability to work remote or flexibly as a reason why.”
In 2016, there were 9.6 million self-employed workers in the U.S. In 2020, that figure swelled to 15.8 million!
So how can independent advisors take advantage of this trend?
It means more opportunities to sell individual insurance policies that would have normally been part of a group employer plan. This is likely to involve health, vision and dental insurance, but could also mean some supplemental products such as disability insurance and critical illness insurance.
With a growing need among freelancers for individual insurance policies, insurance professionals will need to strategize to get in front of this self-employed audience to develop relationships.
Social media, namely LinkedIn, is a great place to start fostering these connections. There are then sites geared towards freelancers, like Upwork, where you might find possible clients. Finally, look into freelance conferences and conventions, which are always great places to network and build business.
The rise of outside-the-box employee benefits.
The American workforce is changing and so too are preferred employee benefits.
Historically, employers have stuck with the status quo: health insurance, vision insurance, dental insurance, 401(k). Anything in addition to that list was a bonus.
But today, employee benefit packages are becoming more creative and personalized. In light of The Great Resignation, it seems as though office power dynamics have shifted a bit in favor of workers and away from employers.
The latter needs to work hard to keep the former instead of the other way around.
Part of this effort includes diversifying employee benefit packages to remain an attractive destination. A Willis Towers Watson survey of 336 large U.S. employers representing 4.3 million employees found 43% offer a critical illness insurance benefit, while 34% offer a pet insurance benefit, 24% offer hospital indemnity plans, and 16% offer long-term care insurance.
For independent advisors, this trend means more opportunities to sell additional benefits to companies that are trying to attract and retain talent.
There are even insurance companies, such as Spot Pet Insurance, that have set up digital platforms to work with benefit brokers to provide these benefits to companies looking to offer them.
Similar to getting in front of the right freelancer crowd, insurance professionals should be proactive about establishing working relationships with companies that may want to start offering additional employee benefits.
There will be plenty of opportunities for independent advisors to grow their businesses along with the changing times. Identifying those opportunities and building the right relationships will be the keys to success.
Colin Nabity is the CEO and cofounder of Breeze. He may be contacted at [email protected].