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October 19, 2006
Value In The Channel. Have It or Die.
I was driving to the office this AM when I heard an ad for Progressive Direct. Shortly thereafter I heard an ad for Aetna. In frighteningly different ways, both made me think that insurance brokers were hurtling toward extinction faster than they realize.
Progressive Direct provides quotes online that do not always show them as the lowest cost option. They expose themselves and all the major carriers to the same scrutiny. Gutsy move, giving the customer that much information. Their ad explained their approach in very simple, plain English. Aetna's tack was a little different. It touted them as a font of information on healthy living and well-being. But in a way not unlike Progessive, it also spoke clearly to the customer.
Brokers often get angry at insurance companies seeking to "go direct." I say "get with the program." Many brokers conduct business the old-fashioned way -- assuming some schmoozing will keep the business. They need to recognize that just passing along information from carriers without adding unique value of their own is recipe for disaster (something I have written about before with regard to the auto industry). They can be easily disintermediated (remember that word???). A great broker guides, communicates and informs. They help me proactively avoid problems. They take the time to filter the maze of confusing data and provide objective input from which I can make an informed decision for my home, family or business. In short, a great broker works to create an objective buffer between themselves and the carriers desperate to sell some policies.
Which is why Progressive is so interesting. By presenting "neutral" data, they create their own "objectivity buffer." It may not be as good as a human broker, but think of it as a first-generation effort. All told, it adds up to one of the more unique approaches to crumbling the value of the channel.
By the way, I don't really fault the individual brokers -- in fact, I think many brokerage companies are managed by some of the most antiquated thinkers in the business community. Raised on a high-commission diet that allowed labor-intensive, personal touch approaches to business, they eschew the use of "depersonalizing" technology that could help them improve their ability to create and distribute value. I know many hard-working individuals slaving away in insurance brokerage businesses who are being suffocated by the lack of innvoative thinking and real-world support efforts.
It's no wonder that the gecko can get away with mocking the middleman.
Posted by jcioban at October 19, 2006 7:00 PM
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