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The current landscape is shifting towards an insurance technology domination, making it important for agents and brokers to create a competitive advantage through effective and efficient use of analytics to create value-added services that enhance customer's experiences. PolicyGenius during their founding conducted a survey that shows consumer's responses to insurance experiences. The results of which are stated below.
Results of 2014 survey conducted by PolicyGenius, say that 50% of survey participants told PolicyGenius that they didn’t think they had the right level of insurance, and another 7% said they had “no idea” if they had the right amount of insurance. Another alarming trend from the data was that of the 50% who said that “I probably have less insurance than I need”, 48% of them said their last insurance experience was negative. It is important to note that of these survey participants, 59% of respondents primarily gather information about insurance policies or buy insurance online. http://www.ibamag.com/news/half-of-americans-say-they-dont-own-enough-insurance--why-that-could-mean-trouble-for-the-producer-27651.aspx These survey results showed PolicyGenius that there was a clear need for a simpler customer-oriented online insurance broker.
In response to this need, PolicyGenius created a solution: free insurance check-ups. Insurance check-ups are a great tool on the PolicyGenius website that insurance agents should be aware of. Consumers can get free check-ups to find out answers to questions about personal insurance plans, and to help them stay on track with their insurance needs in the future. This can include things like if someone has enough life insurance coverage, or if long-term care insurance is needed. PolicyGenius also gives an analysis of how one’s savings and insurance coverage stacks up to peers and what best practices to follow. Another helpful feature of the check-up is an insurance to-do check-list to help keep a client on track with policy information and updating. https://www.policygenius.com/insurance-checkup-and-advice This is one way that PolicyGenius is creating the value-added services that consumers today are desperately looking for. Given the trends of technology in insurance, it is important for agents and brokers to be effectively using analytics to increase value-added services. This will help them compete in the long-run against websites like PolicyGenius, by building customer loyalty and service differentiation. Which also brings me to an important question.
Will PolicyGenius disrupt insurance agents selling personal lines?
Yes, well at least they are going to try. However, I see two potential outcomes for agents. One being that middlemen (insurance agents) are eliminated, and the second outcome is that middlemen are empowered.
PolicyGenius uses a direct-to-consumer insurance strategy, meaning that they are selling insurance products directly to consumers, without the use of any human intermediaries. This is a highly competitive strategy, and one that can definitely be disruptive to the current landscape. Instead of worrying about the impending disruption, insurance agents and their clients can become empowered from sites like PolicyGenius, Zenefits, and Friendsurance for example. One important message from Shefi Hutta's article about PolicyGenius is, "They believe that if you educate consumers with the right system, they will buy the right product without a hard sell." Meaning that if you empower consumers with the right knowledge about their current and future insurance needs, then consumers, especially millennials, will be more apt to buying the right insurance for themselves and ultimately be happier with their insurance plans and agents/brokers. If agents can take a page from PolicyGenius, and implement these type of strategies into their own current selling and marketing efforts, it can help them effectively compete against online disruptors. This coupled with effective analytics and value-added services, could be the recipe for long-term sustainable competitive advantages for human insurance brokers/agents. http://insurancethoughtleadership.com/tag/policy-genius/
More about PolicyGenius...
PolicyGenius was founded in 2014, and has 800,000+ users. http://www.liveinsurancenews.com/policygenius-establishes-another-foothold-in-the-insurance-industry-through-latest-round-of-funding/ In a recent round of series B funding, PolicyGenius raised $15 million, lead by Revolution Ventures. Revolution Venture’s is the brainchild of Steve Case, the chairman and CEO, of this Washington, D.C.-based investment firm. Revolution’s story is that they invest in entrepreneurs with disruptive and innovative companies, who are attacking “traditional” large industries, with the intent of bringing about big changes by implementing new technologies and methodologies. http://www.revolution.com/our-story/ The fact that Revolution Ventures spearheaded this sizable investment, signaled to me that they must have great confidence in PolicyGenius’s platform, strategy, and growth potential.
How does PolicyGenius make their money? Well they are still an insurance broker, so they get paid in the same way that most brokers do, by insurance companies from commission on sales. They bundle in the price of the commission into their insurance policies offered, so there is no additional costs for using their services. PolicyGenius differentiates themselves by not selling client’s information to other insurance brokers/agents, like some lead-based insurance sites do. They claim to work with individuals personally and have a very user-friendly website, so that people can easily navigate and compare insurance prices. They do not promise consumers cheaper prices, but instead offer products from several insurance companies, so that if a company has a competitive price for an individual, then consumers can choose that plan and company to go with, therefore saving them a few bucks.
PolicyGenius is an interesting online insurance broker, and it will fun to track their growth and progress in the years to come.