Transforming insurance agents into advisers

10 Jan 2017

While the ideal for an insurance agent has long been someone who understands each client, and offers personalised service, in reality agents have tended to be salespersons focused on pushing off-the-shelf products. Yet nowadays, driven by digital disruption and rapidly growing consumer power and sophistication, the role of an insurance agent is fast evolving towards being a financial adviser focused on lifetime financial planning and advice, said Mr Jason Dehni, CEO of Sun Life Hong Kong .

Sharing his insight with Asia Insurance Review, he said:

Days of digital disruption 

While digital disruption may seem a somewhat abstract concept, we are all familiar with the changes arising even from smartphone apps that simplify everyday services. Once we begin using an app with a great experience, most of us are immediately hooked. The interaction is straightforward, the delivery consistent, and life has changed a little, for the better. 

With such changes, our expectations of services are evolving. And that evolution is accelerating every day. Consumers may have long dreamed of personal services and products tailored to their needs, even when dealing with large companies. Now this is possible as digital solutions cut straight through traditional gatekeepers and market limitations. 

As a result, consumers expect more: more convenience; more personalisation; more instant satisfaction. The user experience is effortless, even pleasurable. And of course, consumers soon become accustomed to a new normal of fully customised interactions.

Three trends accelerate change in Hong Kong

Here in Hong Kong, disruption in the life insurance space is being accelerated by three major trends.

Firstly, Hong Kong has one of the lowest retirement readiness scores of any major developed city or country. The cost of living is outpacing salaries, while the population is living longer and ageing. This requires a rethink of how we help our clients prepare for retirement.    

Secondly, personalisation of experience and content are becoming incredibly sophisticated, enabled by the availability of Big Data and behavioural economics. So from the client’s perspective, everything can be personalised. 

 And thirdly, the rise of FinTech and start-ups is set to disrupt longstanding life insurance business models. It is leading to clients’ expectations rising and becoming more sophisticated than ever. Companies no longer have a choice in adopting digital distribution technologies, but must put advice and needs-based solutions and services at each client’s fingertips. 

More importantly, given that we are a relationship-driven business, a combination of digital and physical – or “digical”, as management consulting firm Bain & Company describes it – is absolutely critical to the survival of the life insurance industry.

Agents to digitally empowered advisers

Given these trends, progressive insurance companies are now transforming their agents to become digitally connected advisers. Rather than being salespersons primarily pursuing one-off deals, these advisers focus on building clients for life. The new advisory model is empowered and enabled by the transformation to the digital age.

 For all the importance of technology, agents still need a human touch. They must become trusted advisers, guiding clients through thinking about and preparing to answer some of the biggest questions they will face in their personal lives.

Insurance companies must help and invest in their agents as they make the transition. In particular, they must emphasise the transformation in an agent’s role. It is no longer about selling a product. It is about developing a connected relationship with the client, building a financial plan and offering a range of solutions that meet the specific needs of each client – and not just today, but over their lifetime. 

This kind of change cannot just happen overnight. Insurance companies must help and invest in their agents to make the transition, including through:

A complete rethink of model that is more closely aligned with the interests of the client.

To deliver on this concept, the entire adviser-client relationship must be built on a digital platform that seamlessly engages the client in a manner of their choosing.

Digital distribution now business-as-usual

This digital distribution is now part of business-as-usual, and can integrate seamlessly with traditional methods in order to attract and retain clients. Clients can receive high-quality advice and solutions using all available channels and in a way that fits their individual lifestyles, whether that is a Skype chat with an adviser, going to a bricks and mortar location for a one-on-one financial planning session, opening an App on a smartphone, or consulting a company website to have a question answered for a premium.

Omni-channel distribution is no longer an experiment, but is the new normal and is the way through which companies will develop new operating models to provide and capture life-time client value.

Additionally, increasing use of analytics for market segmentation and predictive modelling helps to ensure that messages, solutions and channels alike are personalised and customised. Of course, this presents insurance companies with immense challenges - including the need to interlink technologies old and new. Success requires the delivery of a simple, personalised and digitally connected experience for each client, throughout his or her relationship with an insurance company.

Outstanding client experience

Clients will enjoy three key benefits of the transformation. 

Firstly, advisers will carefully listen to each client, in order to truly understand their dreams and aspirations, and those of their family, and their financial needs for helping achieve these dreams. They would not push individual products, but instead develop a financial plan and offer a range of solutions based on each client’s requirements. Advisers recognise there is no “one-size-fits-all” when it comes to financial planning.

Secondly, advisers know that what is right for clients today would not necessarily be right for them in five or 10 years’ time. They update financial plans to accommodate different life stages, dynamically creating different scenarios to assess risk. Advisers help plan for future generations by engaging each client on an ongoing basis, powered by advanced analytics to help anticipate their evolving needs.

Thirdly, each client benefits through engaging seamlessly and conveniently with their adviser and the life insurance company. 

Ambitious strategy relies on human touch

This digital strategy is ambitious, but for a life insurance business to survive and thrive in the face of significant change, it has to be. We cannot avoid technological disruption, but must instead embrace it, and in doing so, can breathe new life into the roles of life insurance agents and companies, whilst setting new standards for the industry. 

And for all that new innovations’ promise to simplify client interactions, they cannot offer that human touch. That is why insurance companies’ people and the relationships they cultivate matter more than ever. It is why agents matter more than ever. And it is why digital disruption is making the agent – or rather the adviser – more relevant than ever. 

Hence, while digital disruption might appear impersonal, it in fact offers an enormous opportunity to renew our commitment to the values and practices that built the insurance business in the first place: trusted relationships and meaningful experiences.