Tech Companies Now Selling Insurance Overseas?

3 minute read

I just read an alarming article on PC360, one of the online insurance industry trade publications. The article said that ‘effective immediately Amazon will be selling automobile insurance in India’. Not only will they be selling insurance in India, but it will only take a few seconds with no questions asked to issue an automobile quote there. This is alarming because if Amazon can sell auto insurance in India, they can sell it in the United States.

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We already know that you can insure people by asking just a few questions. Some carriers can ask less than two or three questions and develop an insurance proposal in the background. Doing it for auto insurance with a name and a driver's license number and perhaps your garaging address is technically possible today. And certainly, Amazon could provide the same capabilities in the United States as they’re providing in India. We knew this was coming, it's just that now it's happening.

What are we going to do about it? The first thing is, ask ourselves, are we going to freak out and worry about it or not? My personal view is that I don't worry about things I have no control over. And certainly, I have no control, and neither do you, over whether Amazon decides to sell insurance or not. Amazon, Google, or any other large tech company has the capability if they have the willpower and the desire. Since I can't control those things, I'm not going to worry about them. What I am going to do is get prepared. Chris Voss, a former chief negotiator for the FBI says that in times of crisis, "People don't rise to the occasion, they fall to their lowest level of preparation". I'm not going to get excited, but I am going to get prepared and so should you.

How do you get prepared? I think the first thing that every agency selling automobile insurance ought to do is reassess their current capabilities. Make certain that you're giving your current clients the very best service. If you don't have 24/7/365 services, find a way to deliver that. Service Centers are one way, cell phones are another, third-party service providers are yet another. You may want to do it differently, but first, make sure you give great service. Great service includes great advice. It's hard to believe that Amazon in India or Amazon in the United States is going to give the kind of advice and counsel that you give your clients. Be sure you're not just quoting them a price but you're looking at their risk, giving them great advice, giving them multiple choices, and that you're doing it rapidly. If you're doing that, then you're giving a great service today. That's step number one.

Step number two is you can allow people to get quotes on your website, too. Your agency automation system undoubtedly has some self-service and self-quoting capabilities. If it doesn't, perhaps it's time to get a different system. But put the ability on your website now for customers to get quotes, when and how they want them. Then you'll be doing exactly what Amazon is doing. The next thing to do is begin to talk to your insurance carriers about their plans for minimizing the speed issue. That is the number of questions that will be required for them to issue an automobile policy. Put your preference on doing business with those carriers that offer the most automation and the fastest speed of quote to issue. That will encourage them to develop rapidly the capabilities that you will need to compete.

The last thing is don't worry. You can't control what other people do. But you can control what you do, and you can control your level of preparation. This announcement, like many others in the past, is not unexpected. You should expect that carriers and tech companies increasingly find ways to sell insurance rapidly online. An additional thought is to find ways that you can diversify your agency now into areas that don't naturally allow themselves to be quoted instantaneously with an algorithm. Remember, you can compete on service, you can compete on personal relationships, you cannot compete on price against an algorithm. And you can compete much better on complicated products than something simple like auto insurance. If you have not diversified into commercial lines, this is the time to get prepared to do that. If you're not focused on niche marketing to people who don't want to buy from Amazon, now is the time to revisit your marketing plans. This is an interesting and yet unexpected announcement. Well, I say it's unexpected; I think we have been expecting it, but any time news like this hits the marketplace, it seems so sudden and so unwelcome that it seems unexpected.

One of the things that has happened with COVID is that it's speeding everything up. The movement to online and online selling is also speeding up. The only thing you can do is get ready and get prepared. Do the best job you can and focus on things that are value creation instead of transactions, which is all the Amazon deal is. I believe the best days of the independent agency system are in front of us because I think technology allows us to focus on relationships and get rid of drudgery. But you have to realize that when things change, you have to change along with it. And again, what you can't control is you can't control what other people do. You can control your preparation. If you're prepared, don't worry. If you're not, now is the time to get prepared. Good luck.