Investing in technology has become increasingly important for insurance brokerages, with agencies spending more than ever before on technology solutions for growth and efficiencies. In the 2010s, insurance brokers spent about 10-12% of their revenue on technology such as analytics and big data. Today, insurance brokers are investing an estimated 15-20% of their revenue on technology solutions. This includes all software, technology and tools used to run an agency, for reaching prospects and customers, and for driving growth and profitability.
For those agencies looking to stay competitive by using technology, it’s important to be strategic and deliberate about investing – as the expense and complexity of technology could also have a negative impact if approached without a plan.
Getting started
A plan starts with understanding the current state of your agency’s technology. Asking key questions can help you identify your agency’s needs, strengths, or existing gaps around technology. Are you utilizing all of your current technology to its fullest capability? Are you effectively integrating new technology solutions into your current technology? Do you have the right technology solutions to support your agency’s growth strategy and long-term goals? Does your tech stack support your plan to hire additional producers and support staff? These questions can help build a strategy around new technology investments.
Next, examine your agency’s current capabilities and possible challenges. Budgets, ability to provide training, demands on your time, or other barriers could be deal-breakers in implementing new technology or upgrading systems. This also may involve assessing the “build vs. buy vs. partner” dynamic as you review costs and ROI. Ensure your agency’s long-term planning team is adaptive and responsive to changing conditions.
Finding the right technology solutions based on goals
The type of technology solutions you choose should be driven by whatever your business goals are, combined with operational priorities and your agency’s capabilities to utilize it. Here are some suggested areas where technology can help, based on specific goal types:
| If your goal is to… | Consider adding, changing, or upgrading |
| Target new business opportunities | Analytics and Reporting: This technology gathers data and analyzes it, including data on the source of your new clients, production, and renewals. This may also include systems that takes data through a processing pipeline, from raw data sources, and organizes this into aggregated data that can be analyzed and used for decision making. This can help agencies cross sell, make better coverage and carrier decisions, and drive overall strategy. Marketing Automation: Marketing automation software helps manage and automate repetitive marketing processes and can provide a better, more personalized experience for a agency’s clients. It can help manage processes such as social media posts, email marketing, and ad campaigns. |
| Increase efficiencies and drive down operational costs | Agency Management System (AMS): The insurance agency management system is likely one of the key components of your tech stack. This is technology that decreases time spent on administrative tasks and paperwork. It will help an agency organize their book of business, assist with operations, and manage sales. Billing and Payments: This is a system that manages transactions, billing, and payment processes, including a customer interface and back-end processing and financial reconciliation. |
| Sell more and spend more time with clients | Customer Relationship Management System (CRM): This is a key system which gives the agency a customizable, user-friendly interface for sales and client management. A CRM system will help identify leads, help with prospecting, and can track information needed to manage your client communications and customer service. It will also analyze trends and insights using AI to give suggestions for targeted products and sales. |
| Improve the customer experience | Certificate Management: This system allows an agency’s clients to easily access their certificates and the other relevant information and documentation they need. This technology can help brokers provide more personalized solutions and accurate coverage recommendations. |
Executing the plan
There is a balance between spending more on technology and making sure you are utilizing your current tech stack to its fullest. Being successful with both can lead to higher-than-average growth rates and allow your agency to operate more efficiently.
Consider creating an internal team or working with an Agency Network, like FirstChoice, that offers technology consultations along with a technology council of agents to gain valuable insights and help execute the plan. It may also be wise to prepare the company for possible future disruptions and necessary training to align strategies with the ever-changing technology landscape. Furthermore, the resources of a larger group can benefit your agency and your customers. Joining a peer exchange or exploring the benefits of an agency network allows agencies to stay current with the latest emerging technologies.
