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Why Not? Is the New Motto for Insurance Distribution

New technology has yet to cause complete disruption in the insurance industry, but there certainly has been more than a minor disturbance in the way insurance carriers operate these days, particularly with the distribution channel.

Independent agencies continue to go about their business because insurance can be a confusing and worrisome issue for consumers. A gentle, guiding voice is comforting for many people who need to make important financial decisions. There always will be a need for professional advice because there will always be a customer base that doesn’t want to spend the time or energy to research the issues for themselves.

Of course, not too many years ago that description could be made of the entire insurance-buying public. Over the course of the last decade, though, the mystery surrounding many insurance products has faded away. Today’s consumers have a better understanding of what they are looking for in the marketplace, particularly in the personal lines.

But savvy shoppers are also wondering why the industry continues to believe the insurance-buying public is incapable of making more decisions for themselves when it comes to buying the “complicated” insurance products, such as commercial lines and many life insurance products.

Carriers have to decide whether to fear the disruption in the distribution process or become a part of it. A recent Deloitte study shows small business owners are ready, willing, and able to purchase coverage online and carriers have to make some decisions on whether to embrace not only the new technology, but the mindset of consumers.

Some are choosing to continue with the early 21st century model of offering online information that potential customers can use to conduct research before calling their agent, but a hybrid approach seems the best answer.

There are many customers that will have to be dragged kicking and screaming into the future. They will never shop for insurance online and they will rely on agents for every decision. But that distribution model reflects the past. The industry needs a model that points in a new direction, even for those “complicated” products.

As the late Robert Kennedy said a half-century ago: “There are those that look at things the way they are, and ask why? I dream of things that never were, and ask why not?”

Well, we are living in a world full of people whose motto could very well be “Why Not?” They will someday become the overwhelming majority, so ignore their needs at your own peril. 

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