Everything You Need To Know About Digital Insurance

It’s an online, 24/7 world, even for the insurance industry.

Your clients expect self-service options accessible from their computer or phone, along with attentive customer support and competitive rates being transparently available without them having to walk into an office or schedule a time to meet with you in person. In the post-COVID world, these instant-gratification “needs” have only amplified. To serve their customers, especially those in younger demographics, many agencies have already made the move to operating only online, and more are considering doing the same; some are calling this “digital insurance.” The term “digital insurance” really refers to digital insurance agencies—agencies that conduct the majority (if not all) of their operations and processes online or through a software application.

People sometimes mistakenly assume that digital insurance refers to the insurance policies themselves. But insurance is the same whether it’s purchased online or in a brick-and-mortar location.

So when we talk about digital insurance sales, it’s important to remember that the product itself hasn’t changed; the only thing that’s different is the mode of service. So the engagements you have with customers will be similar whether they take place in person or through a computer.

In this article, we’ll look at what digital insurance means, how digital insurance agencies operate, and which types of agents might be the best candidates to operate digital agencies.

Can’t seem to find (or keep!) excellent producers? Learn best practices for hiring, training, and retaining top producers and staff in this free guide.

What is a digital insurance agency?

A “digital insurance agency” is an insurance agency that typically exists without a brick-and-mortar office, doing all or a majority of work online exclusively. Especially in the wake of the pandemic, insurance producers, like so many other employees, now often work remotely; there has been a steady rise in the number of agencies working remotely, and it’s a trend we believe will continue to increase in the future.

What’s the difference between a digital insurance agency and a traditional insurance agency?

“If you ask 10 different agents, you’ll probably get 10 different answers,” says Todd McLain, top Farmers agent and CEO and Founder of Agency MVP. In his view, however, these are some of the qualities that characterize a digital insurance agency:

• A digital insurance agency may provide on-demand or self-service options, such as policy or claim forms that are available for viewing and downloading whenever customers choose—even at 2 a.m.
• A digital insurance agency may offer online promotional assets that build community and increase visibility, such as blog posts and PSAs. (Check out our article on social media to learn more about creating an online presence.)
• A digital insurance agency may use software to automate repetitive, manual tasks, allowing its team to focus on the human connection in insurance sales and support.

According to McLain, “A digital insurance agency can quote more, sell more volume, and give the consumer a much easier path to sales and interaction.”

Characteristics Of A Digital Insurance Agency Vs. Traditional Agency

Much of the economy is now automated and digitized, and certain factors suggest the importance of implementing on-demand and automated processes for insurance agencies as well. While some customers may miss the face-to-face contact available in a traditional office agency when they use a digital insurance agency, with the advent of the COVID pandemic, many consumers are already foregoing many in-person services. Virtual meetings via Zoom (or other platforms) offer a distinct advantage: no travel time for the agent or client. If a client cancels at the last minute, you haven’t lost any time and can simply pivot to your next set of tasks.

Digital insurance agencies also benefit from an industry perspective. Insurance carriers have been progressively lowering upfront commissions for agents, instead promoting performance bonuses to incentivize high quote and sales volumes. The intention is to weed out agents who sit on their renewals and don’t actively seek new sales. For agents who don’t have the ability to automate their sales and marketing processes, the pressure to increase quote volume and sales can mean a mountain of paperwork and more manual tasks. Eventually, the law of diminishing returns means the more agents quote, the less time they have to follow up. For agents who buy leads, they often can’t contact them all and only have time to call random picks. With digital insurance paired with a robust CRM, agents can automate time-consuming tasks and get time back to focus on things that will help their businesses grow.

Some prospects, like families with teenagers, require particular time-based underwriting opportunities that most traditional CRMs can’t easily surface. Additional opportunities are presented by high-value prospects with high premiums or multiple lines. For agents without automated and repeatable processes (CRMs, LMS, etc.), it’s virtually impossible to find every one of these prospects and set aside the time to establish contact with all of them. “Agents who are utilizing their digital assets to connect with the right prospects at the right time will thrive in the future of insurance. Those who treat data like a task will be out of business or sell out soon,” McLain states.

One Agent’s Journey To Digital Insurance

How does Todd McLain understand the pitfalls of relying on paper-based processes for selling insurance? He’s walked the path himself as an agent for over 12 years. He came to the insurance business from investment banking, when a former colleague who had transferred to insurance revealed the unique opportunities of the industry.

Shortly after, McLain invested in his own Farmers Insurance Group agency. He quickly learned that prioritizing leads could pay huge dividends. This eye-opening experience taught him a valuable lesson that’s stuck with him since:

“Six months into my career — I'll never forget it — I was looking at a stack of applications and made a personal challenge to myself to call every applicant back. It took two days. Literally the next night — the very last lead — was an Allstate customer with 10 rental properties who could have saved over $3,000 by going with us. I got excited and made the call. He answered the phone and before I could even get out my pitch he said, ‘I wish you had called me a couple of weeks ago – I just switched to someone else.’ And he hung up on me.”

McLain immediately posted a sticky note on his monitor: How do I keep the Allstate guy in front of my face? If that guy had been at the top of my list, a sale would have paid for my marketing for a month,” he says. “It was clear that if we were going to be a digital agency and grow, we need to be smart about every second of our day and focus on contacting people at the right time for my carrier.” (Our article on running a successful agency discusses this topic further.)

For McLain, this experience set him on the search for a platform to automate these tasks, which culminated in developing his solution: Agency MVP.

A lead should include information such as the current carrier premium, risk score, claims, tickets or accidents, and more. Good digital insurance platforms, like McLain’s own Agency MVP, learn from and prioritize each new and pre-existing household you enter into it.

“When an agent logs in and the call list loads, the most valuable and most-likely-to-close leads are prioritized for you,” explains McLain. When the platform does the sorting for you, you can increase your sales volume—with the same headcount. In McLain’s case, that volume rose five times without hiring more agents.

However, not all digital insurance platforms are equal. Some CRMs use pattern-matching AI. According to Pickl.AI, “pattern matching is a technique through which you are able to test whether an expression has the required characteristics. In simpler terms, pattern matching is the process of looking for a specific type of data within an expression. One of the most commonly used patterns in AI is the instance pattern, where a pattern is defined on the basis of an individual occurrence rather than a particular number of occurrences. Another example is the regular expression pattern, which is defined by a sequence of characters in a particular order.”

However, according to McLain, pattern matching alone most likely won’t be enough to get the information you need for your digital insurance agency. The insurance industry is volatile, with rates and underwriting guidelines continually changing. “You can’t learn patterns and apply them to rates,” he notes.

“What the agent has to do is make it intuitive for the consumer,” McLain explains. “You can lead the consumer to digital insurance, but you can’t give them too many options. Customers don’t want to feel like it’s challenging and frustrating to shop for insurance.”

How To Transform To A Digital Insurance Agency

Despite the advantages of digital insurance, agents are often intimidated by the notion of automation and providing on-demand services. Their fears are frequently rooted in experiences with complex one-size-fits-all platforms. “What I have to tell agents is: ‘Take a deep breath because it’s much easier than you think,’” says McLain.

The key is to find an intuitive platform that’s purpose-built for digital insurance by people who understand the required functionality of a digital agency. For example, generic CRMs may not be able to retrieve crucial data, such as critical underwriting events like claims falling off or competitors taking rate increases, because it isn’t built to learn from leads.

“Automation should also track critical event dates, like claims falling off, where you might be able to steal the consumer from the competition mid-term. Leads are locked in a term, and with critical event dates monitored, you can now quote them without a claim surcharge. If you wait until their next renewal processes, you're already too late,” McLain says.

The ability to instantly send a text message when a new EverQuote lead hits your account can increase your contact rate by more than 200%, because you’re communicating immediately instead of potentially calling the lead five minutes after it has hit your inbox—potentially being one of a dozen agencies to call. Automation platforms like Agency MVP also have a custom automation cadence that tracks leads’ renewal dates, targeting the times leads are most likely to respond.

As for old leads, although they can be imported into a new system, McLain cautions that entries from old platforms are unlikely to contain actionable information. You can still work these older leads and, as you requote and contact them, you would then update the critical data points, opening up the smart X-date automation or claim falling off triggers and more. Any new lead that comes in would, of course, be on the smarter digital agency platform.

How EverQuote Can Help Transform Your Insurance Agency

Ready to step up to digital insurance? One way to get started is through a lead generation platform like EverQuote. At EverQuote, lead quality is at the forefront of everything we do. Every insurance shopper we send you we have the ability to show you exactly when and where that lead comes from. We don’t sell aged leads, we don’t recycle lead information, and we don’t incentivize leads to fill out our forms.

EverQuote provides a real-time feed of local leads that match your underwriting guidelines and special qualifications. Quality leads mean you don’t risk competing with your own carrier, contacting leads who’ve been pitched by other agents, or reaching out to leads who finished shopping days, weeks, or months ago. Learn more in our comprehensive guide to lead generation, or see how lead generation can work for you. With EverQuote, you have complete control, customization, and can even pause your account with no consequences. Click here to get a tour of the software with one of our experts.