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On Technology: The Major AI Problem Facing Insurance Brokers That Microsoft, Google And ChatGPT Won’t Solve

By August 10, 2023No Comments

(This column originally appeared in Forbes)

Let’s say you’re running an insurance agency. You sell different types of policies. You may represent various insurance companies. Maybe you specialize in commercial insurance so you offer property, auto and liability coverages for businesses. Or perhaps you sell life insurance to individuals. Or maybe health insurance plans. It’s a good business. But you’re about to face a big problem: Artificial Intelligence.

That sounds kind of strange, right? The whole world, let alone the tech industry, is romanced by the potential of AI. And the hype is believable. Just look at changes that are coming in the very near future that will significantly impact your business.

Within the next 12 months both Microsoft’s and Google’s business applications will include AI tools that will help insurance agents write better emails, perform deeper spreadsheet analysis, create automatic sales presentations and even attend more than one meeting at the same time! ChatGPT, which is half-owned by Microsoft, has released a new version that allows developers to create conversations, provide insights and perform client service and marketing actions not only based on external online data but on their own internal data.

Customer Relationship Management systems like Salesforce, Zoho, Copperand Microsoft Dynamics, which are used heavily in the insurance business, are being re-tooled to not only read and understand customer and prospect data but to automatically and more intelligently perform outreach, respond to questions, chat with website visitors, send automatic emails, deliver forms and prompt agents to remind them of renewal dates, birthdays, anniversaries, policy lapses, overlooked clients and potential new products to sell.

Human Resources platforms from Paychex to Gusto to BambooHR will be better at employee onboarding employees, managing feedback and performance reviews, coordinating paid time off and automating benefits applications and form-filling. HR technologies like HireVue and Vidcruiterare improving their AI video capabilities to better evaluate prospective employees while limiting bias. New AI-leveraged platforms like Workableand Greenhouse will continue to help their clients create and place better ads while more efficiently tracking and qualifying applicants.

Agency management and marketing systems like Agency Revolution, Indioand ImageRight — among many others — will better integrate with insurance company platforms to deliver up to the minute policy information, workflows, reminders, customer self-service help, better client onboarding and automation of forms processing while guiding users and agents to choose the best policies.

A lot of this is available even now. A lot more is coming. All of it will be better, cleverer, quicker and more autonomous once these software companies get smarter about their own capabilities and begin rolling out improved functionality leveraging AI.

It’s great. It’s exciting. And it’s a problem for insurance agencies. Why? I offer one number to explain the reason: 66.

What’s so important about 66? According to Zippia, a research site for job seekers, approximately 66 percent of the almost 145,000 insurance agents nationwide are over the age of 40 and only 11 percent are under the age of 30. The average insurance agent is actually 46 years old. What’s even more concerning is a typical insurance agent only stays at their job for 1–2 years. Which doesn’t bode well for the younger group to make it into the older category. The insurance industry needs younger people. And it needs it needs its older managers to think younger.

AI is new. It’s exciting. It’s game-changing. But, like any new thing it will require an enormous amount of change. It will involve risk. It will rock the boat. Mistakes will be made. Employees will need assurance. Clients will need care. Agency firm owners and managers will need vision, self-confidence and the desire to adapt for the sake of growth and future profitability. Older people tend not to do this. They’re more set in their ways. They’ve invested years in creating their own processes and systems and are reluctant to change unless the return on investment is significant and can be assuredly proved.

“If it ain’t broke, don’t fix it,” we say.

The insurance industry doesn’t have an AI problem. It has a demographics problem. Smart agents — both younger and older — will recognize this opportunity and pounce. Larger insurance companies who cannot bring those channel members who resist this change into alignment in order to take advantage of this new world will be forced to leverage AI tools to do more of the selling and servicing themselves and leave those older agents behind.

This is not a problem that will just impact the insurance industry. Other industries have similar demographics. But unfortunately, this is a problem that Microsoft, Google, ChatGPT and all the other software vendors won’t be able to solve alone. They can’t put a gun to the heads of their users and tell them to leverage their AI tools. At some point it’s the users, the agency owners, who need to understand its value and embrace these changes.

Many older users will resist. And unfortunately it’s the older people that make up two-thirds of the agents in this country. It’s one of the biggest challenges that will face the adoption of AI in this industry over the next few years.

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