2021 Best Practices Study

Adapting to a Rapidly-Changing Environment

InsurTech Best Practices

InsurT ech: What’s next and how can agents and brokers respond?

Over the past few years, the insurance industry has been abuzz with the catchphrase: “ InsurT ech.” What exactly is InsurTech? And what does it mean for insurance brokers and professionals? InsurTech is the convergence of technology and traditional insurance brokerage. A tangible example of this accelerating trend is the August 2021 merger of ABD Insurance & Financial Services ( “ABD”), an award -winning and Best Practices Agency, and Newfront Insurance, Inc. (“Newfront”), a Top 50 Fintech company. In combining their forces, s kills, and capabilities, ABD and Newfront aim to redefine the insurance experience by blending talented insurance professionals with cutting-edge technology innovators. Not all InsurTech firms seek to partner with or empower agents and brokers – some intend to disrupt the industry.

Best Practices leaders need to answer two fundamental questions: how widespread is InsurTech and what is the probability of significant disruption?

In June 2021, Reagan Consulting conducted a survey to understand the current InsurTech landscape and learn how insurance leaders are thinking about this new phenomenon. Reagan interviewed and surveyed CEOs, CTOs, and technologists who shared their insights on how insurance and technology are colliding, what they see as the next wave of innovation, how to best remain informed regarding new products and services, and what agents and brokers can do to actively engage with different InsurTech players.

Enablement, not disruption

At first glance, InsurTech may appear as a looming specter of the unknown, threatening to upend agencies’ traditional operations. In Reagan’s survey, however, industry thought leaders were largely in agreement that InsurTech will enable, rather than disrupt the industry. When asked directly if they were concerned about InsurTech disruption materially impacting their business in the next 3 - 5 years, only 17% said they were concerned. As the years progress, more disruption is likely. Thirty-three percent of survey participants predicted a material disruption in the next ten years.

Source: 2021 Reagan InsurTech Survey

Survey participants viewed InsurTechs as potential partners who can help agencies succeed. Fortunately, the availability of beneficial technologies has never been higher. Marketing materials routinely flood agencies’ inboxes, wooing brokers with the lure of increased sales, improved customer experiences and lighter workloads from enhanced efficiencies. Yet, it’s important for agencies to discern whether or not the proposed technology actually applies to their businesses. The key question becomes, “Does this product enrich my value proposition to historical customers, as well as prospects?” Brokers are who are able to adopt and effectively leverage applicable new technology services will indeed be able to better perform and ultimately reduce the threat of disruption.

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