Mandating Insurance & Technology, No Room For Agents

I was thinking the other day about the health mandate and how it compares to the state mandate with auto insurance. Every state mandates by law for individuals to buy auto insurance for the common good. With these statues on the books, the growth of online buying of auto insurance has exploaded. Folks can buy auto insurance without the help of an agent. The mandate forces buyers to the front door of insurance companies. Insurers do not need agents to "rustle" up the business and sell it. So as the studies show, agents are becoming less and less important in the buying decisions of auto insurance. Now comes Obama Care with a fresh supreme court "ok" on the mandate and I am wondering what is going to happen to agents. My prediction is we will see the same trend as auto insurance buying. The health mandate will force buyers to the doors of insurance companies via the exchanges and no agents will be needed to produce the business.  Agents will also be forced out of the equation by technology, as the health exchange online portals will provide application and buying choices, similiar to what we see with online auto insurance websites.

The good news for agents is that studies still show that people want to talk with an agent or broker right before they buy. They use the conversation as a little reassurance that they are making a good buying decision. Unfortunately, insurance companies know this and are not going to pay agents the same amount of commisssion as in the past just to fill this roll. The future for agents is pretty clear.
As Federal or State governments continue to mandate insurance, technology will push the role of agents into a minor state of "final resource" before insurance buying. Agents will still be in the game but paid at a lower rate for thier services. Bleak ?  Yea it seems that way. Gosh I hope I am wrong!
Until next time be careful out there and know your risks. K

Blog by Kevin Nemith, President CNC Insurance Associates Inc. & The Small Business Insurance Center. Specializing in Business Insurance , Small Business Insurance, Risk Management, & Enterprise Risk Management.

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