People often think that change is expensive. But what about the cost of being the same? When your insurance business does not invest in process improvements, including modern technology and automation, you risk paying the price in the long run.
Doing nothing costs nothing
We love a good analogy, so let’s think for a minute about your car. Let’s imagine that you own a car that is 20+ years old and has traveled 300 000 miles. Turn off your mistrust for a moment, or at least pretend it’s a Toyota.
You have been paying for it for a long time, so there is no monthly car payment. And your car insurance is dirt cheap because you do not even care about comprehensive coverage. Wind, hail and fallen trees were cursed!
Your cost of ownership may feel small compared to the idea of buying a new car, but the reality is that not making a change will cost you more than you would like to admit. While you are focused on the large down payment or the monthly installment that is higher than zero, you forget things like:
- New high-tech safety features that can prevent accidents before they occur
- Fuel efficiency that saves a lot of money on gas – or eliminates gas altogether
- Free maintenance during your first years
- Lower insurance premiums for cars with anti-theft equipment and Internet-enabled tracking
- Warranty coverage for major mechanical defects within the first five or even 10 years of ownership
When you really think about it, it often costs you more to hold on to something you’ve had forever than to embrace something new.
The same thing happens in companies all the time. When people are considering upgrading their internal processes – for example, replacing manual work with technology – all sorts of obstacles get in the way.
“It’s getting too expensive.”
“It will take too much time or effort.”
“We will sacrifice productivity while people get started.”
And our personal favorite, “But we’ve always done this!”
Like your old (imaginary) car, the costs in the prime of our minds are usually temporary, and much less over time, than those we pay to continue doing things the old-fashioned way.
Does your insurance compliance process correspond to an old jalopy?
Forget your car for a minute and let’s think about your insurance business. Whether you are an insurance agency, carrier or MGA, you have processes and systems in place to handle things like producer licenses, appointments and contracts.
It is quite possible that your “system” is a spreadsheet. In fact, more than 10 percent of our customers upgrade directly from one! Or it could be a combination of different technical tools that your organization has put together over the years, but that do not integrate or interact with each other.
It is tempting to think that the only cost you face is to adopt a new technical solution. Now think about the old car – your process is probably similar. What now seems to be a good and cost-effective method actually costs you more than you realize.
- Duplicate work due to data and workflow silos
- Lost income due to producer stoppage between employment and ready to be sold
- Inflated recruitment costs due to a complicated staff experience that leads to high turnover
- Human error due to manual and repetitive tasks that can be easily automated for greater speed and precision
If you are ready to take a good look at what price you really pay to continue doing “business as usual” with your insurance company, agency or MGA, our guide can help you.
Download “What does it cost to do nothing?”, AgentSync’s guide to the “business as usual” price in the insurance industry to explore how much you already pay (and risk paying) just to stay the same. Or click here to create a live demo to see what AgentSync can do to reduce these costs for your business.
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