In the first part of the article I wrote why the world of insurance works with insurance agents and brokers and I mentioned a number of reasons that may cause a change in the activity of insurance agents and may even cause a sharp reduction in their activity
The first reason is profit – there is no doubt that many customers are interested in a professional person who will guide them in the process of purchasing insurance and will provide them with professional service later on. But do those customers want to pay for this service and if so how much. In addition, there is constant pressure from regulation and competition to lower insurance prices and commissions, which leads to a sharp drop in the income of insurance agents. So even if there is a need and desire on the part of customers to work with an insurance agent they and the insurance companies find it difficult to pay for this service. This means that agents’ revenues are already declining and will fall further in the future, which will cause many of them to unite or be acquired by larger agents, or even worse. This is the first reason that insurance brokers in the world over the next decade will disappear from the market
The second reason is regulation. Regulators around the world want to ensure a number of important things, including stability in the insurance industry, and especially insurance companies, a fair and competitive market. Many regulators in the world do not see the insurance agents and brokers as part of the factors that serve these goals and perhaps vice versa, so regulators in the world actively and partly less directly cause a reality in which insurance agents will find it difficult to operate as in the past. A load of directives and requirements, and a significant change in the activity of the industry. Like many regulators, technology is seen as a means to achieve these goals. In the next chapter I will discuss this issue and see its effect on insurance agents and brokers.
In the next parts of the article we will go deeper and explore how each of these factors affects the agents. Whether and how the technology will lead to the disappearance of most agents from the insurance industry
- Availability of knowledge
- Technological improvements (InsurTech)