Study Finds More Tech Use Means More Productivity and Profitability for Insurers
June 16, 2015
For most of us, using technology is a part of everyday life, and particularly so when we walk in the door at work. But a new study from Velocify and Insurance Technologies Corporation (ITC) shows that the relationship between technology use and productivity seems to be relatively linear: the heavier the use of technology in the insurance industry, the more productive the user is and the more revenue is realized as a result.
The Velocify / ITC study in question, titled “The State of Techsurance 2015,” took a look at how technology trends are having impact on insurance agencies, and the discoveries were surprising. The study found that larger agencies, as well as those who were more successful overall, had a general tendency to turn to sales and marketing technology more frequently than the smaller, less successful counterparts.
But this wasn't a sign for smaller firms to pack it up and go look for another line of work. The study found that all insurance agencies were commonly lagging behind on several critical points, and those lag points were key opportunities for agencies of all sizes to advance in the field. More specifically, the survey pointed out that those agencies that “rely heavily on sales and marketing technology” sold more policies and had greater growth overall. Those heavy tech users also commonly had better sales processes overall than the tech laggards.
Certain technologies also seemed to have better results. For example:
- Those using lead management software brought about 43 percent more sales per producer, and 13 percent more per household.
- The often-maligned automated dialer system generated 43 percent extra per producer also, though only seven percent more per household.
- Customer relationship management software generated only 15 percent more per producer, but 11 percent more per household.
- Finally, marketing automation tools made a big impact with household sales, making for a 10 percent increase.
But despite clear evidence of gains, there were still lags in who used what. For instance, only 70 percent of agents involved with over 100 employees used lead management tools. What's more, for direct-to-consumer carriers and independent agencies, over 70 percent of each group wasn't using automated dialer systems at all.
Interestingly, athough there does seem to be a correlation between technology use and revenue growth, it's important to note that there are other factors at work here, like size of the market and needs of the users. There are also some contraindications against using certain technologies; automated dialer systems, for example, have often been disparaged depending on how such are used, and in some cases, there are laws related to the use of same. But by the same token, it's been noted previously that insurance agents are often lagging behind when it comes to technology use, and some, like Ovum (News - Alert), are projecting change in the field with things like software-as-a-service (SaaS (News - Alert)) systems.
There's one clear takeaway from this study. For any insurance agency it's a good time to examine the current level of technology used, and see how what's new in the field relates to current needs. Sitting on one's laurels, technologically speaking isn't always a good idea, and just knowing what's out there can lead to new opportunities for better results.
Edited by Peter Bernstein