A new report from the McKinsey Global Institute promises that the age of automation could wipe out as many as one in four full-time insurance positions in the next 10 years. Operations, product development, and marketing and sales support are all ripe for the taking, say researchers, who estimate that 25% of these positions are likely to be consolidated over time.
And while independent insurance agents are not left out of this stark equation – the analysis suggests that 60% of tasks performed by producers could be automated – industry experts say there are still ways for them to flourish. Unsurprisingly, nearly all of them have to do with embracing new technology.
“To meet these challenges, insurance companies will need to source, develop and retain workers with skills in areas such as advanced analytics and agile software development, experience in emerging and web-based technologies, and the ability to translate such capabilities into customer minded and business-relevant conclusions and results,” McKinsey said in the report.
To their credit, insurance producers have already begun this process. In a separate report from agency technology provider Vertafore, researchers found that while more than half of producers (54%) feel moderately to seriously threatened by advances in automation, four out of five agencies also reported increasing their IT budgets over the last 12 months in order to address these threats.
Nearly 50% plan to spend more on advancing customer self-service capabilities, while 43% are looking to make investments in cloud services and solutions. Investments in mobile (40%) in the form of mobile friendly websites and apps are also top priorities for agents going forward.
By improving e ciency in these areas, producers can free up more time to spend on the kind of creative problem-solving that machines can’t easily replicate.
And that is exactly what they need to do in order to increase their value proposition to customers and stay relevant, argues Valen Analytics CEO Dax Craig. As head of a company that develops technology and data solutions for carriers, Craig facilitates conversations with both insurance companies and agents, and from that vantage point, he sees a forthcoming evolution in insurance distribution – but not one that necessarily precludes producers.
“If you’re an agent that’s small, I still think there’s a way for you to win. I really do,” he says. “Those who are adopting more technologically driven apparatuses to help them do business are going to be the ones most attractive to potential buyers.”
