Despite strong investment in recent years, many direct-to-consumer (D2C) insurtechs aren't seeing the adoption they expected. One underlying cause: lack of customer trust.
When it comes to insurance, customers trust people more than tech. Buying insurance is a major decision, and customers want a credible human partner throughout the process.
To earn customers’ trust and scale distribution, it’s time to look for long-term solutions. Here, I’ll share my three-step road map to help insurtechs build trust and reach more customers.
Step 1: Partner With Independent Agents
I talk a lot about the power of independent agent partnerships. That’s because insurtechs have a genuine trust problem – and agents could be the key to overcoming it.
Agents provide a human touch and industry know-how that tech can’t replace.
When agents have face time and interact directly with customers, there’s a back-and-forth dynamic that builds rapport. That rapport builds a relationship. These relationships usher in trust, and customers trust their agent to deliver guidance that actually meets their needs.
In each conversation, agents can use their inside knowledge to deliver insights. They can even enlighten customers about things they don’t even realize they don’t know. For example, an agent could assess a customer’s wildfire risk before a consultation. Then, they could reassure customers about their insurance concerns – and ask follow-up questions about things the customer might not have mentioned.
With agents as partners, insurtechs can put a face to their brand name. The benefit: Through agents, insurtechs can build a foundation of trust with each customer, making it easier to win adoption across markets and retain business.
Step 2: Get the Right Back-End Tech
Insurtech-agent partnerships are a two-way street. Agents can build and maintain customer trust – but only if they have the right tools.
Insurtechs can leverage their prowess to provide specialized back-end tech. The key here is to understand agents’ pain points. This way, each tool can actually meet their needs.
The right back-end tech helps agents get better at the things they’re already good at. Tech-powered agents can pull from extensive historical and demographic data to deliver better guidance -- faster. With the time they save, agents can focus on customer conversations and provide personalized guidance at scale.
My suggestions on back-end tools insurtechs should invest in:
- Quoting and binding tools. In minutes, agents can help their customers find personalized coverage based on location and demographic data.
- Policy-writing software. Faster policy-writing helps agents reduce their customers’ coverage gaps.
- Customer support tech. When agents aren’t available, a tech-enabled support team can answer policy questions fast.
Something to remember: Insurtechs don’t have to reinvent the wheel. Proprietary tech can play well alongside third-party software. With a few smart investments, insurtechs can tap into a ready-made knowledge base and quickly give agents the tech they need.
Step 3: Educate Customers About the Industry
Customers rarely understand everything about their insurance policy, much less the industry. But insurtechs can change that. By educating customers about insurance matters, insurtechs can empower them to make confident policy decisions.
There’s a clear business benefit, too: Education builds trust. An educational dynamic is collaborative – it helps customers feel like valuable partners. Educated customers are more apt to trust insurtechs to provide the right coverage. The reward: better customer loyalty.
See also: Insurtechs' Role in Transformation
Agents play an important role in the education process. When helpful resources come from a trusted agent (rather than an anonymous brand), customers are more likely to recognize the value and engage with the material.
Insurtechs and agents can educate customers about things such as:
- Financial literacy. When customers know the financial basics, they can make smarter coverage choices.
- Lines of business. Customers need to understand the coverage they have – and the coverage they might need.
- Industry jargon. Once customers grasp complex terms, they’ll know how to ask the right policy questions.
- Local insurance news. Customers should understand how market dynamics affect their coverage.
Insurtechs can use digital tools to boost their educational efforts.
The Future of Insurtech Depends on Trust
Like many tech spaces right now, insurtechs are going through a shakeup because of plummeting valuations. To steady the waters, insurtechs have to prove they can deliver on their promises.
A new-and-improved distribution model can help. With the right approach, insurtechs can partner with agents to restore customers’ trust. The result: a model that keeps insurtechs competitive for the long haul.
