Startups Taking Over
According to an associate at venture capital firm General Catalyst Partner, startup companies have been recently interested in replacing insurance agents. Last year, there was a large growth in technology deal activity in the insurance business. A variety of factors may transform this business’ transactions. First, the average age of an agent today is 59 years old. Since millennials will be the next largest wave of insurance consumers, older agents need to adapt to the channels that millennials interact with, specifically through the internet and smartphone technology.
The successes of other markets that have also greatly reduced the need for a personal agent make this a compelling point. Companies like Kayak and Expedia have largely decreased the need for a travel agent. As startup companies begin to provide different methods of consumer education, they may also begin to substitute what a personal insurance agent does best – individualized consumer education. Startups have also found new ways to facilitate supportive customer service online. A Deloitte representative recently stated that the small-business insurance market may not be significantly affected in the near future, but having a presence through a variety of channels is important.