Will brokers survive Covid-19 ?
I’m biased. I’m a fan of brokers and the broker channel. I think they serve an important need and generally add value to their clients and their carriers. But, I’m worried. I’ve been embedded in the broker distribution channel in one form or another for more than 27 years. I’ve seen hard markets, soft markets, consolidation, aggregators, disintermediation and the gentle erosion of the brokers’ market share. Through it all, the best brokers have grown & prospered. I, and many others, have been promoting broker digitization for years. We talked about it & encouraged brokers to get on board because “that’s where consumer preference was heading”. The impetus to digitize was to satisfy a consumer desire. Well, guess what? With Covid-19 & physical distancing, digitization is no longer a preference. It is the solution to a looming existential crisis. You’ve likely already seen the stories of business succeeding in these times - Amazon hiring more than 100,000 workers, Walmart hiring 75,000, NetFlix has added 16 million subscribers - those are the obvious success stories. But, what about insurance? In my opinion, we’re in the calm before the storm. Insurance is somewhat of a good news story right now. Carriers have suspended cancellations and are providing relief on policy premiums. Consumers are taking cars off the road or reducing costs by notifying providers that they are no longer commuting. That’s the calm, and that’s good. But, it won’t last. The storm is what happens when needed rate increases go through, when carriers stop holding off on cancellations, when cash-strapped customers decide to seek options. The storm is when huge numbers of policyholders hit the market, whether by choice or by necessity. Your retention is going to be hit. Hard. There is a silver lining, however. All those non-retained customers are now free agents and up for grabs. Where are those free agents going to go? Spoiler alert - it’s not your office. It’s online to Google and Bing. (Well, OK. Not Bing). Are they going to find you? Do a quick test to find out. Google “car insurance” or “car insurance quote”. See yourself there? I’ll even save you the trouble and do it for you:
Of the 10 results on the first page - also known as the “only page prospects look at”, there are only 3 brokers. That is nowhere near good enough for the entire channel to survive the storm. Bottom line Now is the time for brokers to invest in SEO and digital marketing in general. Now is the time to pull the trigger on that client self-serve tool you’ve been thinking about. Now is the time to start using that email marketing tool that you bought last year. Now is the time to up your social media game. As always, the best brokers will survive & prosper. Now is the time to choose to be one of them.