Last Updated: January 3, 2023

Insurance Aggregator – The Best Way Forward for Insurance Agents

Recommending a good insurance policy from a reliable carrier alone will not suffice to make you a competent agent. According to Insurance Journal, recent research found that 57% of customers switched to a competitor for a better customer experience. Another 80% of respondents stated they are more likely to do business with someone if they are provided a more personalized customer experience. Therefore, the market demands that you be a highly responsive, informative, and reliable service provider. For these requirements, there’s one proven solution—an insurance aggregator.

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What is an Insurance Aggregator?

An Insurance Aggregator is a one-stop shop for insurance seekers. It’s a website that gathers insurance-specific information from different sources and organizes them in one place. It fosters a network of insurance carriers, independent insurance agents, captive agents, and clients. While the providers can display their insurance products to a broader market, the shoppers can find detailed information about insurance policies – prices, coverages, premiums, and other special features.

Why Choose an Insurance Aggregator?

Let’s unravel how an aggregator benefits you.

Surviving and Thriving

The consolidation of agencies is increasingly growing. According to Insurance Journal, there are 15 insurance distributors that are bigger than almost all of the insurance companies out there. Out of a total of 900 insurance companies, their scale of operation is equivalent to being larger than roughly 860 of those companies. To combat this, insurance providers are also progressively looking for partnerships and broadening their networks.

Becoming a part of a broader network has become essential for an insurance agent. Long-term survival is almost impossible if you intend to work in a silo. However, with an aggregator you’ll be able to get a comprehensive picture of your market through information centralization. That will help you plan your next moves.

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Keeping up with tech-savvy

Statista reports that as of 2019, there are over 72 million millennials making them the dominant generation in the US. Exposed to digital technologies from their early years, millennials are digital natives. This shift in demographics opens demands for tech-based services. Hence, you have to be able to play with the Internet of Things and smart devices.

Keeping up with evolving digital platforms, analytics, artificial intelligence, and interactive marketing modules is grueling. But through aggregators, you won’t have to worry at all. Your aggregator will set the platform and update it as required, while you only have to learn the basics of relevant insurance agency management system to reap the benefits.

Up-selling and Cross-selling

An aggregator comes with the benefit of structured data and it helps you keep your accounts on track. You can maintain records of approaching expiration dates of your clients’ insurance policies and help with renewals. Furthermore, you can even reach out to your clients to ask about their satisfaction with existing policies and help them if needed, thereby increasing your customer retention rate. Another benefit of using aggregators is access to information intelligence. For instance, you can get information if an existing homeowners policy client puts their home for sale in an online market. Accordingly, you can keep track and approach this client to sell another homeowner’s policy. Selling a new policy to an existing client does not take as much work and resources as prospecting.

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Escalating Processes and Conversion

When prospects request a quote from their chosen carrier, they enter most of their data in the system. That means you will get an outline of the lead’s needs before you even contact them and will be able to more easily develop a good rapport with them. Additionally, you can focus on gathering other needed data to move ahead with the submission.

Through an aggregator, your clients can enjoy a seamless insurance experience. Whether for inspection, insurance proposal submission, or insurance claim adjustments, the processing time is significantly reduced. An overall faster process will keep your clients loyal to your services. It is an influential factor for customer retention.

Limiting fraud

According to the Insurance Information Institute, auto, home, and business insurers in the US pay roughly $30 billion annually towards fraudulent claims. Surprisingly, this amounts to about 10 percent of their total claim payouts. Insurance companies are turning towards data aggregators and producers for predictive analytics and artificial intelligence to keep fraudulent cases low.

Since aggregators are powerhouses of information, you’ll have an advantage when it comes to assessing your prospects and identifying anything suspicious. Limiting fraudulent claims lessens costs to the related carrier, leading to decreased policy premiums. It also means you can be a reliable source of business for both the carriers and your clients.

Is Becoming an Insurance Aggregator the Best Way Forward?

Traditionally, insurers would not contract with agents who could not bring in over a half a million dollars in premium volume. Establishing an independent agency was considered remarkable. To overcome this challenge, the concept of insurance clusters came into being.

The clusters allowed agencies to collaboratively share an insurance carrier contract and spread the premium requirement. However, the clusters had two major loopholes: Lack of control over the quality of business written and lack of professional management as an organization.

Insurance aggregators are the improved version of insurance clusters. Aggregators focus on market access, profit sharing, networking with insurers, and so on. An aggregator is the association of insurance agencies as well as the umbrella network of clients and carriers. This makes it clearly better than an independent agent acting alone, or an insurance cluster.

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Insurance Agents and Aggregators in the Future

Aggregators are growing rapidly and globally. In varied countries like the UK, France, Spain, Japan, Italy, and India, insurance aggregators are progressively growing and attaining a share of the market. This trend demonstrates the reliability of aggregators in a variety of markets, and indicates a promising future for them.

While aggregators help clients get quotes from their intended insurance carrier in just a few clicks, an agent’s scope will not diminish. You will remain a key asset in the value chain. The automated system provides quotes for general policies but lacks the human touch necessary for personalized service. The system cannot provide results for special requests and does not offer expert advice. For all these reasons, clients continue to seek agents.

What’s more, carriers’ progressive partnerships with aggregators means greater competition. Carriers will need agents to bring in new clients while ensuring that existing ones do not switch to other insurers. Since insurance agents are experts in understanding prospects and making sales, you will have the upper hand.

Insurance aggregators are a disruptive force in the industry and are necessary for independent agents to survive in this highly competitive market. Become a part of this winning strategy and get on top of the competition.

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