How Independent Agents Defeat Online Distribution

close up of woman using her smartphone 1098 1151Just the mention of Google entering the insurance industry a while back sent some independent insurance agents into a panic.  When Geico and Progressive started actively marketing their online sales platform, I started getting calls from P&C agents left and right.  Many agents have feared that the independent agency world is doomed due to online distribution. The threat is very real, and I believe that if it goes unaddressed, it could mean bad news for independent agents. However, there are ways to capitalize on the trends that may lead independent agencies to even more success.

So why are we so afraid of Geico online? Is it that clients are running into the lizard at the grocery store and feeling awkward that they didn’t buy insurance from him?  Do they see Flo at church and worry she’s going to ignore them at the next potluck because they go through someone else?  Think about why people would choose to purchase insurance online. It’s not because of the silly faces associated with the company, it’s because they offer a different service.

Price is not the reason consumers go online to get insurance quotes rather than meeting with an independent agent.  Both options offer the potential for a reduction in price, and some customers even know that independent agents can offer more discounts than a singular company. The leg up online distributors have is ease of business. It’s the unique service that these online giants offer to their customers, which many independent agents do not.

There are some people who still enjoy sitting down with someone face-to-face to discuss the intricacies of insurance over a cup of coffee. However, a growing population is more interested in a quick transaction so that they can continue with the tasks of their busy lives. Some people choose to purchase online because they believe they’re avoiding “sales tactics” that they might feel vulnerable to from someone local.

Companies like Geico and Progressive have engineered their websites to be very user-friendly. Purchasing insurance coverage is simple and accessible 24/7. After you buy coverage, you receive a text and an email with your insurance summary that you don’t even need to file away.  If that’s not easy enough, you can download the app to get everything you need with just a few taps of your phone.  Sound too good to be true?  It’s because there’s one Achilles’ heel with this system; local accountability.

The secret weapon and foundation of the independent agency system are the agents themselves.  Knowing that you have a real, local person who you can count on in times of need is a primary reason that a lot of people have opted for independent insurance agencies in lieu of online efficiency.

So what we have is a battle being fought with two different swords.  Independent insurance agencies already have the upper hand when it comes to relationship building, but what if they held the same ease of business that the online giants do?  The following is a list of services independent insurance agencies have the ability to implement that may not only level the playing field, but put the win in our favor.


Online Quoting.  This technology is available through some comparative raters and will actually provide a rate for your customer after their information is submitted.  Consulting with an agent is required to bind coverage, but identifying the client’s preferred method of contact and explaining that your advisor may find you additional discounts is a great way to have them hold out for a communication follow-up.

Texting.  Whether it’s reminders for a policy renewal or a notification of important weather events, texting is the new standard for communication and needs to be adopted by agencies.  Management systems not only store them as documentation but also utilize them in sales campaigns.

Mobile Apps.  Affordable and turnkey, the ability for your clients to access your agency at their fingertips is becoming a necessity.  App development companies that work exclusively with insurance agencies have made the app creation process a breeze for agency owners.  Customers can submit claims, view dec pages, ask questions, and even print certificates or auto ID cards. 

eSignatures.  Having your customers drive to your office to sign something is inconvenient, to say the least. eSignatures allow the signing of documents to be done from any location.

Availability. Whether your website, app, or phone system directs your clients to a carrier service center or to an after-hours representative, you need to be available when they need you.  This means organizing a system based on what your carriers offer for outsourcing solutions and creating a client inquiry routing system for those that will need to be handled by on-call staff.

User-friendliness.  It is imperative to be easily found online if your name or agency name is keyed into a search engine.  Searching for keywords is a different conversation, but at the very least, clients need to be able to easily find your site or retrieve your office phone number. An agency website needs to be mobile-friendly as well.


These are the core services that are highly valued by web-inclined clients.  Technology vendors make these products/services readily available to independent agencies, but the agency must take an initiative to seek out and implement them.  The online giants are already researching how to improve virtual relationships through social media, text, email, and other digital media, so it’s important to move towards these services quickly.  Now the question becomes, how are you going to implement an ease of business system for your clients?


Written by Josh Nordin