2023 was challenging in insurance. The entire industry, specifically personal lines, has been on a roller coaster driven by a historically volatile macroeconomic environment.
In my role at Clearcover, a next-generation car insurance company, my team and I speak daily with a variety of agencies and producers–those who have been working on the front lines of the industry and can attest firsthand to the challenges the industry experienced last year. Suffice it to say, we recognize that 2023 might not have been a career highlight for many.
The good news: While challenges in the market will not correct themselves overnight, there’s still reason to maintain some optimism as we head into this year. But first, to ensure 2024 produces a better outcome than its predecessor, we need to sift through the lessons 2023 doled out to learn how best to move forward.
See also: Top 5 Challenges Facing Agents in 2023
The market challenges of 2023
We’re using the word “unprecedented” a lot right now to describe the state of the industry, and it seems to be an appropriate description. Veterans of the industry–on both agency and carrier sides–tell me they’ve never experienced a market like this.
That's not to say that the industry didn't present opportunities for those who were willing to innovate and adapt. While connecting with agents, our team noticed that those who found themselves busier than ever in 2023 were the same agents who had implemented operational efficiencies in their agencies. They built more sophisticated automated workflows into their customer relationship management systems (CRMs) and dedicated specific staff to make renewal calls if they weren’t doing so already. They also diversified as much as possible, dedicating more marketing dollars and personnel to commercial lines insurance than they had in the past.
Carriers, working feverishly to find profitability, began to lean on artificial intelligence (AI) as one of the major directions of innovation. In 2023, AI became much more than a buzzword as carriers implemented sophisticated predictive models to place risks. (I cannot help but be comforted knowing that AI helps us procure and analyze data that might help us predict the “2023s” of the future so we can get ahead of hard markets.)
Because Clearcover felt some of the market impacts sooner than the average carrier, we made some early adjustments to our operational costs by using AI to save where we could.
This is only the beginning. The market effects of artificial intelligence should only increase in 2024. As AI and machine learning tools improve, significantly refined models will evolve, optimizing predictions for target customer groups.
See also: The Key for Agents: Lifelong Learning
What agents can do to position themselves for success
We don’t have a crystal ball, but we are taking a few bets that 2024 will see the return of broadened customer appetites and fewer rate changes than last year. With that in mind, here are a few things I think agents should lean into in 2024:
1. Embracing artificial intelligence: It’s easy to be apprehensive about AI, especially if you haven’t yet experienced all the ways it can help even small agencies succeed. For example, imagine a world where you don’t have to call every customer at renewal because you have an automated tool that can accurately predict who is most likely to respond to a renewal call—or who is most likely to shop at renewal based on previous behavior. This could save your agency a lot of time on the phone, which could translate to more time prospecting. Embrace and learn as much as you can about the AI landscape. It will no doubt be in our future. Educating yourself on the new technology will be key.
2. Encouraging customers to reflect on their insurance needs: This is a great time to review and revise their coverage to fit their needs, as customers may have been (understandably) too price-sensitive to make adjustments in 2023. There could be new discounts that apply so it’s always a good idea to go over existing coverage with your clients.
3. Refreshing your carrier relations: Understanding the evolving goals and appetite of the carriers you work with this year will help your agency be able to present as many options as possible to your customers. It will also keep your staff feeling knowledgeable, empowered and positive about the industry. If your top carriers offer a re-training or even a sit-down (virtual or in-person) with a carrier representative, this could be a great way to ensure you’re up-to-date on their appetite, offerings and technology—all of which may have been updated while new business slowed down.
