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I have written recently that I believe the insurance agency distribution model is going to go through a rapid and irreversible set of changes that will destroy many unprepared businesses. These changes will be the result of technology, which will enable distribution to change, and become commoditized as a result, and changes in customer behavior.
This is certainly alarming. Or should be!
But for the enterprising agency owner this also represents enormous opportunity. J.P. Morgan, the famous 19th century robber baron that built giant companies still in existence is quoted as saying, “buy when there is blood in the streets”. There is blood coming. What can we do?
Recently I was in Paris and stopped in a fountain pen store. Fountain pens are anachronisms. Who buys, or uses, fountain pens anymore? Well, a lot of people do! But not everyone. There are still enough people in the world that enjoy using these tools that a good business is available in supplying them. One of the most famous makers of pens is Mont Blanc.
What is interesting to me about Mont Blanc is they sell pens, including fountain pens, to people for whom a plain roller ball will not do. Their customers want a different level of quality. They demand a higher level of service. They are willing to pay more for a different “experience”.
But the Mont Blanc customer is not unique! Check the pockets of business executives and you will see that millions of people purchase Mont Blanc pens. They are mass-produced but have a higher quality than Bic! I hope you can draw a comparison here between how most people buy insurance, and how many want to. This latter group is going to be the most desirable market for independent agents in the near future.
Mont Blanc takes this mass produced quality a step further. They offer “limited edition” pens. These pens have the same basic features of their regular offerings. But they offer something else that is unique and limited. In Paris I purchased a Carl Collodi pen from their “writers” collection. I did so because I’ve been to Collodi in Italy where he is from and where he wrote the children’s story “Pinocchio”. The pen writes like any other – but it is unique. However, it’s not custom. It’s expensive. More than their other pens. But it was worth it to me.
Insurance customers, particularly affluent customers, want similar treatment from agents. There is hardly anyone offering this treatment. So, the customer goes frustrated. There is a different and a better way to serve these customers and the technology that destroys the average agent will enable the clever ones to serve these people better in the future. There is an incredible business opportunity here for those who can see it.
My Mont Blanc Collodi pen delights me every time I use it. Insurance customers in the future will demand a similar experience from their agents. Or they will go somewhere else.