Fired Up! Insights on the Future of Insurance From Mike Scott

Feb 12, 2020

Mike, how do you think the role of insurance agents is changing? 

“I view it as the agents’ job to be experts and to truly understand the coverages they’re selling. And to deploy that expertise in the most affordable and beneficial way possible. The best way to do that is through syndicated program business, in my opinion. 

I think a major change that’s already happening is that agents cannot survive on their own as just generalists. To some extent we’re always going to be generalists because we’re managing property and casualty risk. But a true generalist would be someone who literally would write anything that comes in the door. They list their expertise as everything and that’s not somebody a client should partner with.

Instead, agents need to be building a really deep bench of people to back them up. And it only costs a couple points of commission. I think beyond the money it can be even harder for some agents to set aside ego and bring in people that are smarter than them to handle a certain subject matter. It’s the right thing to do for their clients and their own career.”

Are insurance agents under threat by new technology in the industry?

“I view `insurtechs` and `insurance technology` as two different things. Insurtechs are tech companies that are trying to become insurance agents or companies. Insurance technology are tools intended to make existing agents and programs even more successful. 

For agents who’ve done their job right, their clients aren’t going to feel comfortable buying something just directly online from an insurance carrier. They’re going to worry about how that coverage actually applies and would rather an expert agent guide them. 

I’ve also seen the customer service that insurtechs provide and the learning curve they go through when their workflows aren’t really fully understood from a client point of view.

On the other hand, there are those high volume, small premium products that insurtechs are effectively selling, for which I hear a lot of people complaining about and I just disagree. The bulk of this business agents should really be trying to get away from. There just isn’t enough revenue for what the cost of risk is, and some agents just need to accept that.”

How are you seeing technology improve the industry?

“I think insurance technology is absolutely critical. But this piece is only as good as the team using that technology. If they don’t use it correctly, it’s worthless. 

I see technology reducing the number of steps and touch points required of staff to service clients. We all know that filing documentation is not why clients buy from us. So we need to minimize double, triple or even quadruple data entry, which is meaningless work. What clients really need is the advice, the consulting and the friendship of the people they buy from. Great technology is out there reducing these steps so our partner agents can focus on what they do best. 

I think about Lloyd’s, the founder of insurance and they’re making it very clear that you have to digitize. Everyone is going to be forced to be more efficient or you’re going to be forced out of the marketplace. I can’t give a timeline on when that might happen, but we need to embrace the improvements that technology brings to insurance.”

What changes for the industry at-large are you confident are coming?

“The industry as a whole is trending toward a hard market. Coverage will continue to deteriorate, and price will continue to increase. I think in the next three years it’s going to be hard, and those that are going to suffer the most are focusing on the general liability side of things. Particularly for customers in the $10,000 to $50,000 premium range. They’re going to get hit with exclusions and other changes on their policies that they’re just not aware of.”

What do you wish the insurance industry would do better?

“I love this industry, but I wish we would be better to each other and a little bit more friendly in our competition. When we tear each other down it makes our industry look bad, and I would like to see that changed. 

It’s a great industry and I absolutely love being a part of it. There’s plenty of business out there, so don’t try and force a square peg into a round hole just to move up the ladder. Let’s do the work we want to do, the best way we can do it, while cheering on the greater insurance industry.”