“Rays of hope” in the stock market notwithstanding, the U.S. economy is still in a deep, deep funk, at least from the point of view of the average citizen who may have lost a job, lost hours on a job or seen his pay cut.
My financial advisors tell me that employment is a “lagging indicator” when it comes to gauging the health of the economy. I suppose this explains why federal officials think that unemployment will remain at current high levels for some years to come. So don’t look for job growth any time soon (isn’t that what the stimulus package was supposed to do?).
I do believe that, eventually, the public will regain some level of confidence in the financial markets and the economy in general, but until that happens, cautious investors will hold their precious remaining funds close to the vest. And there are no more cautious investors than insurance companies.
Thus, insurers, along with others, are still looking hard for ways to protect what they have, maximize current resources and “do more with less”—all in the name of saving a few dollars (assuming the dollar retains some value, which is a shaky proposition). One of the methods suggested to insurers is to maximize investment in sales automation technology, a strategy that supposedly would enable carriers to bring the entire sales operation in-house, thus saving money on agent commissions.
Yes, folks, I’m talking about that old bugaboo, “disintermediation.” Early in the current recession, one industry analyst suggested that insurers would be well served by automating the sales process to the point where very few—if any—humans would be needed. At the same time, the analyst recognized that customers like to use agents, so they recommended that the automated systems mimic agent interactions as much as possible.
This attitude astounds me. Does anyone really think that most consumers won’t realize at some point that they are dealing with automated systems? And why are we even thinking about excising the strongest sector of our sales process for some half-baked automated system?
All this talk reminds me of a rather sardonic saying that used to circulate when I was in the advertising field: “This would be a great business if it weren’t for the clients.” This was our way of whining and complaining about difficult clients; yet while those annoying and sometimes downright nutty clients sometimes left our stomachs in knots, we also fully realized that they were essential to our business, and to our very survival as an agency.
Of course, I’m not suggesting that agencies can be annoying and nutty, but am saying that in stressful times, we can come up with foolish strategies to save money and boost the bottom line. This same “baby and bathwater” mentality is in back of the notion that independent agents can be dispensed with. Sure, carriers would love to save money on agent commissions, but like advertising agencies, many carriers still recognize that they owe a good bit of their success and survival to those same independent agents.
Further, it is never a good idea to make major, paradigm-shift-type changes out of blind fear—or greed. Instead of pondering an automated replacement of human agents, we should be asking how we can use technology to help agents do a better job of bringing home the bacon.
Our business has yet to become so commoditized that all or most of its sales transactions can be done without some human input. That may happen some day, but until and unless it does, let’s be thankful for the industriousness and ingenuity of our agencies, and let’s make sure that technology is their enabler—not their executioner.
Ara C. Trembly (www.aratremblytechnology.com) is the founder of Ara Trembly, The Tech Consultant and a longtime observer of technology in insurance and financial services. He can be reached at firstname.lastname@example.org.
The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.
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