Consumers have long viewed the insurance industry as purely transactional.
According to PwC, consumers trust financial services companies, including insurers, considerably less than those in other industries. An IDC infographic sponsored by Samsung, Shaping the Future of the Insurance Agent From Order Taker to Caregiver1, notes that 38% of consumers perceive insurance agents solely as sellers, saying they lack proactive support in post-deal closures, especially during pivotal moments such as claims assistance. Combined with a lack of access to financial services in some communities and limited financial education, these perceptions have made customers less likely to buy insurance.
For the industry to reverse these trends, agents need to shake off the “seller” stereotype. Here are four insurance agent tips to help dismantle this perception and better serve customers.
1. Focus on financial education
A lack of financial literacy can lead to individuals getting policies that don’t align with their needs. This is largely because consumers don’t fully understand insurance contracts. Limited cost transparency also makes it harder for consumers to choose the right insurance coverage.
Agents can eliminate the seller stereotype by focusing on financial education in every client interaction. After asking a few questions about a customer’s needs, they can succinctly explain different types of insurance that may be suitable, focusing on benefits, the specific risks each policy covers, monthly or annual premium costs, and potential riders or endorsements an individual can add to further customize their coverage. These efforts can complement an insurer’s formal financial education program and may include educational materials and on-demand webinars that guide consumers through the insurance selection process.
Clients who feel more informed about their choices are more likely to trust an insurance agent’s guidance, so this is one way agents can position themselves as a valuable resource.
2. Communicate proactively
As the IDC-Samsung survey shows, consumers often view insurance agents as sellers because they get limited support once they sign up for a policy. This suggests agents are really attentive when they are trying to win a consumer’s business, but less attentive afterward, which is counterintuitive since customers may need even more help when they have a policy question or need to file a claim.
A survey by McKinsey & Company found that customers usually interact with their insurance agent only once or twice a year. This is a big difference compared to other financial service industries, such as banking, where interactions occur 10 to 20 times more frequently, noted the source. It’s hard to shake a stereotype if you are limited in the interactions you have with a policyholder — not to mention when those interactions are predominantly sales focused or claims submissions.
Proactive communication can address this issue. Agents should reach out to policyholders to review their coverage on a semi-annual or annual basis, inform them of new products, and offer tips that focus on the post-purchase experience, such as a step-by-step guide for filing a claim or advice for minimizing their insurance risks. Creating opportunities for regular touchpoints with consumers can help agents foster an ongoing relationship that increases insurance customer satisfaction.
3. Lead with empathy
Despite the higher cost associated with serving through agents, they only marginally outperform online and mobile applications in customer satisfaction: 39% of insurance consumers express dissatisfaction when interacting with insurance agents, which is slightly less than the 40% who report dissatisfaction with online and mobile applications, the IDC-Samsung survey found. Customers may not be satisfied because agents aren’t offering them personalized solutions — 34% doubt agents and brokers offer the most competitive options and believe agents are biased toward carriers with the best commission rates or the least burdensome submission and quote producer portals.
Agents can overcome these beliefs by demonstrating empathy for clients and actively listening to a customer’s concerns. They can showcase this in their email follow-ups with supportive words, acknowledgment of their unique challenges, and tailored guidance.
4. Leverage technology for better service
Insurers can use technology to enhance the customer experience, making it easier for agents to deliver better service. Cloud-based contact centers give agents secure access to customer profiles from anywhere and allow them to see the most up-to-date information about a customer’s previous interactions. This way, they can have a more informed conversation with customers and avoid repeating the same details. Interactive solutions like live chat, policy comparison, and virtual consultation tools, as well as questionnaires that identify coverage gaps, can help agents deliver more useful information to customers in real time.
When using online and offline tools, it’s important to provide a seamless omni-channel customer experience to ensure high-quality engagement every time. According to the McKinsey survey, approximately 1 in 6 customers reported receiving no follow-up from insurers after an initial financial advice discussion. Among those who did receive follow-up, 40% interacted with two or more people, which can result in a fragmented experience. Insurers need to do what they can to address these gaps and ensure that customer interactions transition smoothly between all channels.
Moving from seller to trusted advisor
Finding the right insurance shouldn’t be a complex process, but it often is. Perceptions that insurance agents are more focused on commissions rather than a consumer’s best interests only add to this complexity and create a significant trust gap. Agents can defy the “seller” stereotype with solid financial education and proactive communication by demonstrating empathy and leaning on technology to enable their work. This will show consumers they are with them at every stage in their insurance journey.
Talk to the Samsung team about our solutions for the insurance industry.
1IDC Infographic, sponsored by Samsung, Shaping the Future of the Insurance Agent: From Order Taker to Caregiver, #US51998324, April 2024
