Fresh Thinking from the “Old Country”

Now and then, we come upon a straight set of thoughts are compelling clear and utterly awake – I do not mean “woke”. Here is an article that every agent in the country should read and pass along. It is written by Maria Rosa Alaggio, editor of the Italian insurance magazine, Societa e Rischio. SA

Algorithm or human touch?

The pandemic has reawakened the importance of relationships and led customers to turn to companies with a “human touch”, which is to say contact persons capable of interpreting the frailties, understanding the uncertainties, and providing adequate responses to an unpredictable future.

This explains why, over the last two years, we have also witnessed a sort of “renaissance” of brokers, whom companies have prioritised and supported in the most critical moments of the emergency. This has been accomplished through financial aid, dedicated commercial instruments and incentive programmes (sometimes inadequate, at least according to some category representatives).

Subjects such as “dialogue” and “listening” to the needs of the agency channel are increasingly on top of the strategic agenda of insurance companies. The goal is to capitalise on the value of interpersonal skills and empathy towards the customer: qualities where only brokers stand out and  display in an omnichannel distribution context.

Agents, as is well known, have long been called upon to break down the cultural barriers that hinder the transformation of the insurance industry, a field where customer relations cannot disregard digitisation and the use of advanced technologies by agencies.

The actual relationship between “human touch” and cloud computing, artificial intelligence and machine learning – technologies in which companies keep investing – will depend on the specific strategies and contents that the individual companies intend to implement in terms of risk management, customer knowledge, service quality, operations and agility in navigating the market.

The impression is that the gap between “algorithm”, or rather technology at large, and “human touch” is narrowing down more and more. Imagine two sides of the same coin that, together, can make a difference today in the relationship with customers, in revamping business models (both for companies and agency networks), and disseminating the insurance offer.

Handling and developing the two sides of this coin is certainly easier for an insurance company or group, which can obviously rely on investment levels and organisational structures that agencies can only dream of.

For their part, many agent groups have been trying to figure out how to transform their strength – i.e. the relational dimension they know to build on – into a competitive advantage capable of harnessing technology with a view to gaining increased autonomy from principals.

Some corporate groups are devising answers based on a broader concept of representation, on support for agents that goes beyond protection and beyond negotiations with companies.

The basic idea is to help colleagues, through associations, consortia and service companies, to benefit from economies of scale, acquiring skills and accessing new technologies to complement the human touch that sets them apart.

In the future, this representation role of the category might be able to provide even greater support if insurance companies tried to liaise directly with the customer or turned agencies into local branches. However, such a scenario is a separate topic which expresses the agents’ determination to ward off the risk of disintermediation. A sticky situation where brokers have always shown that they can tell (and make their customers understand) the difference between the contribution of an algorithm and the human touch.