It is a question that has been posed for centuries: Will machines replace humans? Even today, it has many agents in this industry asking: “What will become of my role in the next five to 10 years? Will Big Data and automation cause me to lose my clients?”
Over the past decade alone, robots are now rivalling humans in many ways. New predictive technologies, coupled with growing consumer demand, have changed how the world operates — including how people give and receive insurance advice.
We see increasingly clear signs of Big Data and automation at play, from self-driving cars that pass us on the highway to a voice-controlled virtual assistant named “Siri” which, according to its maker, “helps you get things done just by asking.”
In The Second Machine Age, a powerful book by Massachusetts Institute of Technology (MIT) professors Erik Brynjolfsson and Andrew McAfee, tomorrow’s successful business owners will use technology along with data-driven insights to generate value by opening up unforeseen market opportunities — new products, new services, and new ways of servicing clients. Not surprisingly, they suggest that today’s jobs are being threatened across multiple industries, including retail, manufacturing, health care, law, and, yes, insurance and financial planning. They say those that survive will require human value to stay ahead of the curve.
The biggest disruptor? The ever-changing consumer
The disruptive forces bearing down on today’s advisers are largely driven by a rapidly evolving consumer base. More than 90% of online adults in Asia are on social media, and 97% of active social media users in Asia access their networks on their mobile devices.
People are increasingly willing to trade information online if they are getting something of value in return. That said, self-service offerings will become more popular as consumers turn to the internet to conduct their own independent research – using this information to compare shops’ offerings and purchase insurance and other financial products.
In the US, automated investment websites – companies like Wealthfront, FutureAdvisor, and Betterment — that aim to offer low-cost, algorithm-based alternatives to traditional advisers are experiencing incredible momentum and represent an enormous threat to the industry. Similar “robo-advice” platforms in Asia, such as 8 Securities and Money Design’s Theo, are also gaining popularity.
So, what must the agent of the future do to compete in this age of automation? It is a simple concept: To avoid being “disrupted” (made obsolete), agents need to embrace and apply new technologies and tools across multiple channels.
Success strategies in this new reality
This list is by no means complete, but here are five strategies agents can use in the age of new technologies and automation:
1. Offer unique value that cannot be automated.
Licensed, trusted agents seek to know and understand their clients, help them save time with insurance planning, and create plans to protect their treasures — providing a safety net concerning coverage decisions.
By monitoring what clients say on their social media networks as well as knowing their behaviour on agents’ websites, agents can now identify precisely when to reach out with right information to engage each individual.
Or, to put it another way, if I just announced on social media that I had a baby and you, as my agent, picked up that “social signal,” you might suggest that I purchase life insurance at some point in the near future. By combining this with a face-to-face meeting to better understand my current situation, values, and family needs, my agent is then able to provide a holistic plan and set of products and services that can’t be matched.
2. Be High-Touch.
Today, the most valuable agents will be those who offer their clients personalised services and customised solutions. As such, it is critical that agents find ways to deepen engagement with their prospects and clients both in person and online. This may include sharing relevant content on their websites and reaching out to loyal clients on non-financial matters one-on-one, leveraging technology tools that will help them stay top of mind throughout the year.
3. Stay locally minded.
Prior to the internet, insurance companies exclusively used on-the-ground agents to extend their reach from financial centres to local towns and neighbourhoods. Today’s agents can leverage technology to reach clients and prospects at the local level and where clients are doing their own research.
For example, a search engine optimisation (SEO) strategy can focus on building a local presence and relevance. It can include having a mobile-friendly agent website that is locally optimised across search engines and ratings sites, providing high-quality resources, updates, and links.
4. Find your tribe.
Agents can leverage technology to develop a scalable practice focused on the target markets they like to serve. This then allows them to become a “big fish in a small pond” and focus their practice around clients who share common interests and values.
For example, one successful adviser we know focuses solely on recent medical school graduates. Another focuses on high-tech employees.
5. Embrace technology.
Social is critical to engage today’s clients and prospects, but it is not enough. Tomorrow’s agents must be social, mobile, and digital to stay relevant in clients’ lives. Tools such as a single technology “dashboard” can prove invaluable in these efforts.
The company’s critical role
All in all, companies that adopt new technologies to enhance agents’ practices, use integrated tools to improve their ability to reach clients and prospects, and offer seamless client experiences to enhance relationships will succeed in the long run.
To succeed, this cannot just be a technology initiative or a marketing initiative. Instead, it needs to be a companywide initiative if agents are truly to overcome the threat from automation and thrive in the digital age.
Management teams need to drive this from within, enable champions for innovation in their organisation, and help agents succeed in the digital era. This includes leading by example by signing themselves up on social and becoming more digitally savvy, as well as updating agent training programmes to include best practices for using social, mobile, and web technology to grow business.
In the end, it is about helping agents meet their clients where they are.
Ms Clara Shih is CEO and Founder of Hearsay Social, a Silicon Valley startup.
She has been named one of Fortune’s “Most Powerful Women Entrepreneurs,” Fast Company’s “Most Influential People in Technology,” Businessweek’s “Top Young Entrepreneurs,” and both Fortune’s and Ad Age’s “40 Under 40.”