It’s here, and it’s happening all around us. The digital transformation. You can officially order food, find a ride, and watch the latest Game of Thrones episode, all on your mobile device. This speaks to how the world has changed over the past decade, and these changes have had major implications on the way we do business today. Many insurance agents have not yet turned en masse to leveraging digital platforms to advance their growth goals. The delayed adoption of digital technology puts their business models at risk to industry disruptors. With rising consumer expectations and a rapidly transforming marketplace, is it finally time for insurance to go digital?
What is the Digital Transformation?
Estimated to have begun in 2007, the digital transformation, or digitization, is the application of digital technologies to fundamentally impact all aspects of business and society. Since 2007, digital has rapidly become ingrained into societal foundations. Today, the idea of digitization has evolved from the possibilities of the desktop computer to the mobile device, and now, wearable technologies.
What Caused Digitization?
The two factors attributed to the rise of digitization are millennial behavioral patterns and technological advancement.
Those born between 1982-1995, also known as the millennial population, are considered to be “digital native.” A digital native is a person born or brought up during the age of digital technology and therefore familiar with computers and the Internet from an early age. A 30-year influx of over 83 digital natives, combined with the technological advancement during this period set the stage for sweeping marketplace upheavals.
The Implications for Insurance Agents
What do these changes mean for insurance agents? According to a survey conducted by Ernst & Young, 79% of insurance companies are still lagging far behind in digital adoption. (3) For many corporate executives in 2017, digitally transforming their organization is a top priority.
From a 30,000-foot perspective, digitization will impact both arms of the insurance.
The first in the way risk is underwritten, digital technology has allowed the insurance industry to improve the way we assess risks significantly. Digital tools help us to identify and calculate risks quicker and with improved accuracy.
The second change will be in the way that insurance is marketed. Today the average American consumer wields the ultimate world’s best tool, the internet. Not only that, they wield this power in their palms. These shifting consumer habits require marketing suited for a digitally-obsessed marketplace.
While digital technology is already ingrained in many other industries, is now finally time for the insurance industry?
A 2015 Bain survey of insurance companies projected that digital channels would continue to significantly replace physical channels in the next 3 to 5 years. The survey found that 20-40% of physical activities in insurance will be transitioned to digital.(3) Insurance agents looking to gain a competitive advantage must adapt to the changing marketplace with a gradual introduction of digital technology.
As traditional marketing marches towards obsolescence, digital platforms are rising to prominence and have become the new norm. And with good reason, as digital marketing channels have six concrete benefits that differentiate them from traditional marketing. Digital channels have measurable results, smart, or 100% digital, integrative, can be targeted to your exact audience and automated.
In the past, we used print media and direct mailers to market insurance services. 10 years ago a website was the only piece needed to have a strong digital presence. In 2017, to have an effective marketing program, you should combine a mix of the 5 most popular digital marketing channels. The 5 most popular marketing channels of today are a website, search-engine optimization, paid search marketing, social media marketing, and email marketing.
Going digital does not have to be difficult, actually, a lot of the digital platforms your agency should seek to embrace, you use yourself, every day! Google and social media platforms like Facebook, two tools you probably use every day, can be used to market insurance.
The digital wave might seem overwhelming but will only continue to evolve as we watch the introduction of next level technologies like the internet of things and machine learning. Insurance agents, the way you do business will undergo a wild transformation over the next few years. It’s time to embrace the digital wave and go digital!
Check out the infographic below for more details on how the digitization affects insurance agents.