By Max Dorfman, Research Writer, Triple-I
Insurance agencies that use digital methods to interact with customers have seen their revenue grow faster than their less digitally sophisticated competitors, according to new research from Liberty Mutual and Safeco Insurance. But the research also shows that agencies̵
7; digital adoption has slowed in recent years.The study, The digital state of independent insurance companiesfound that agencies with “high digital users” — based on a 10-point scale related to the number and complexity of the tools the agency uses — experienced 70 percent growth, as opposed to 17 percent for “high digital users,” and only 10 percentage for “low” and “medium” digital users.
But while digital adoption has taken hold, it has declined as a priority in agencies’ plans. In the latter part of 2020, 58 percent of agencies said improving digital capabilities was part of their five-year growth plans, according to the Liberty Mutual/Safeco study. But by the end of 2021, this had dropped to 47 percent, about the same as in 2017.
The digital tools that have seen a decline in use range from social media to live online chats. Additionally, many agencies said they don’t track which digital tools are driving growth.
The survey found that 60 percent of digitally focused agencies said they planned to invest in new digital capabilities within their five-year agency growth plans. Only 42 percent of slow and steady growth agencies said the same. Growth-focused agencies have used several tools to increase their reach and revenue. Self-service portals, video calls, live online chats, video quotes and policy reviews have all driven significant improvements among these agencies.
However, these are not the only tools that are recommended and used. Artificial intelligence, machine learning, Internet of Things and big data analytics are considered and used to increase engagement with customers and prospects.
Cybercrime can be a factor inhibiting the growth of digital adoption. In fact, the global cost of cybercrime is predicted to reach $10.5 trillion annually by 2025, according to Cybersecurity Ventures. Additionally, more than half of all consumers have experienced a cybercrime at some point, according to a 2021 survey by Norton.
Agents remain alert to cyber threats. The Liberty Mutual/Safeco study found that 57 percent of respondents expected cyber liability to have a major impact on their agencies by 2025, up from 46 percent in 2017.
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