State of The Industry - 3 Reasons Insurance Will Never Be The Same Again

The State of the Industry
3 Reasons Insurance Will Never Be the Same Again

THE ORGANIC GROWTH SERIES
What Happens When

Trends Are Ignored
Changes in Insurance
Consumer Behavior
Changes in Carrier Behavior
Changes in Risk
A Simple Action Plan for Agents
by Michael Jans | CEO Agency Revolution
Executive Summary
After McKinsey and Co. released the Agents of the Future: The Evolution of Property &
Casualty Insurance Distribution report this summer, the industry reacted predictably.
First, fear and panic. My email browser lit up with messages from clients and
friends who felt anxious and frightened about the projections. Then, industry
strongholds (and legitimate advocates) declaring that the outsiders at
There are signs now...
McKinsey were dead wrong, didnt understand
that the economics of
the industry or were issuing opinions, not facts.
the traditional agent

model are beginning
to unravel.
McKinsey & Co.
I have no bias for or against McKinsey. They earned their reputation the hard
way. Serious research and analysis. Penetrating insights and observations.
(Even when you disagree with them.) Youd have a hard time finding a
serious business executive who thought they were out of touch or rash. As I
read their report, I see their observations based on the very same empirical
evidence available to all of us who are serious students of our own industry:
Local agents wrote 80% of new Private Passenger Autos (PPA) in 2003. They only wrote
63% in 2010.
Since 2005 the Independent Channels PPA market share decreased from 34% to 31%
(while the Direct Channel increased from 21% to 28%).
In 2010, 22% more quote requests were bound online than the previous year. (38.8
million online quote requests were submitted in 2010.)
So do these changes in consumer behavior signal the undoing of the agent channel?
The short answer is no. And Ill explain why in this report. But does it sound the alarm
bell for agents to change, re-strategize and re-assess their value proposition. The short
answer is an unequivocal yes. That, too, should become clear in this report.
The knee-jerk response of many industry stalwarts - advocates who I count as friends is reactionary, inadequate and potentially dangerous, causing harm to the very
constituency they intend to protect.
In this State of the Industry report you will learn about:
The nature of disruptive trends and how other industries were revolutionized by
innovative technology and trends
n The substantial and irreversible changes in insurance consumer behavior.
n The changes in carrier behavior and what this means to local agents.
n The impact that user based insurance (UBI) will have on the auto insurance industry
and 4 trends leading to an accident-free world.
n Recommended actions and strategic responses for retail agents.
n
www.agencyrevolution.com | 888.208.9239 |
Copyright 2014 Agency Revolution, Inc.
What Happens When Trends Are Ignored
In this section well briefly review examples of how trends have disrupted other
industries so that we can recognize similar signals in our own industry.
In a world thats changing, standing still means that youre losing ground. Since the
introduction of digital technologies, the world economy has witnessed the disruption
even the destruction of numerous stable and solid industries and companies that didnt
adapt to larger trends.
While its tempting for the small business owner to focus their attention on their day job
the consuming tasks of running their day-to-day operation the serious entrepreneur
keepsone eye on the world, monitoring trends and global changes.
Lets glance at the nature of trends and how the Old Guard mindset affected the leaders
in other industries. Hopefully this will serve as a wakeup call for many agents.
Case Study: Blockbuster

Blockbuster failed to recognize the trends in their industry, and their world got turned
upside down. But it couldve turned out much differently for the video store giant. In the
early 2000s they turned down a deal that would have allowed them to purchase Netflix
for $50 million.
But in 2008 their CEO Jim Keyes made the famous quote in an interview with Rick
Munarriz at the Motley Fool, Neither Redbox nor Netflix are even on the radar screen in
terms of competition.
Two years later Blockbuster filed Chapter 11 bankruptcy after losing $1.1 billion. At that
time the floundering companys value had diminished to $24 million, while Netflixs
value had increased to around $13 billion. And Blockbuster just recently announced that
they will be closing their last remaining 300 stores by early January 2014. Their story is a
perfect example of the effect disruptive trends can have on industry giants.
Neither RedBox nor Netflix are even on the

radar screen in terms of competition...
Jim Keyes, Blockbuster CEO
Case Study: Kodak

Another lesson about the importance of monitoring and responding to disruptive trends
comes from Kodak. Even though they created a working prototype of the first digital
camera in 1975 they failed to see the writing on the wall regarding the move to digital
photography.
Steve Sasson, the Kodak engineer who invented the digital camera presented it to
management they essentially said, thats cute but dont tell anyone about it. Although
Kodak would remain healthy until the mid-1990s they would later fail to respond to the
consumers shift to digital photography and filed Chapter 11 bankruptcy in 2012.
Kodak failed to recognize the shift from film to digital until it was too late. Their
complacency was fueled by the fact that for decades their sales and profits rose.
Therefore, management continued to simply refine existing products instead of focusing
on innovation. They also suffered from the Old Guard mindset that says, why fix what
isnt broken?
Steve Sasson, Kodak Engineer
...it was film-less photography, so managements

reaction was, thats cute, but dont tell anyone
about it.
Case Study: General Electric

Fortune called Jack Welch the manager of the century. And The Financial Times said
GeneralElectric, which Welch was the CEO of from 1981 to 2001, was the worlds most
admiredcompany in 1996 and 1997. Why?
Because Welch understood industry trends. In fact Welch said it best, The best executive
today is the executive that can see around that corner whats coming. Not when youre in
the tunnel and the train is coming right at you. Anybody can make change then. The job
is to change before thats necessary, and its the hardest thing in the world.
Its easy to change a company when the fire is burning in the back of the room. Its much
to change a company because you smell something or feel something coming at you [in
another direction]. And thats the challenge all of you have, is to not sit on what youre
sitting on. Always be paranoid that somebody is going to take that away from you. Be
thinking about the next jump. Its almost like a chess game, you think the next move
before its upon you.
Its often said that Welchs brilliant leadership was not the result of so-called leadership
skills or attributes like charisma or inspiration. He made keen strategic decisions based on
observable trends. As the head of GE, he sold more than 200 businesses worth over $11
billion, using that capital to purchase 370 strategically located businesses.
Jack Welch, Chairman and CEO, General Electric, 1981-2001
Jack Welch, General Electric Chairman and CEO
Be thinking about the next jump. Its almost

like a chess game, you think the next move
before its upon you.
Trend #1:
Consumer Behavior Has Changed
In this section well review key takeaways from major reports by respected names
in including: McKinsey & Co., J.D. Power, comScore, A.M. Best, The Independent
Insurance Agents of America, and Celent. I encourage you to consider this
information with an open mind and resist the urge to draw any conclusions
before seeing the data.
Clearly, the consumer has gone digital, but thats not the only consumer behavior thats
changed. Theyre also thinking about insurance differently. Ill explain that in the three
forces that are driving commoditization (e.g., price is the predominant advertising
message today).
Well also review J.D. Powers Overall Index Score which reveals remarkably powerful
insights on what it takes to thrive as a retail agent. J.D. Power asked, How likely are you to
respond to a price increase? See how many consumers would shop and who would stay
no matter what.
As you study this data youll notice some alarming trends. But, if you look closely, youll
also see some silver linings. For example, youll see consumers are most satisfied when
they interact with a local agent who uses emerging technology. So while consumer
behavior is changing it does not mean that this is the end of an era for local agents. But
you do need to pay attention if you want to be around in 5-10 years. Lets get right into
it
What Did McKinseys Report Say?

Since McKinseys report titled, Agents of the Future: The Evolution of Property and
Casualty Insurance Distribution is the report that has caused the most controversy
lets look at that first:
...gradual shift in the value that carriers and consumers....place on...local agents, which
is increasingly calling into question what role they will play in the future.
They go on to say
There are signs now, however, that the economics of the traditional agent model are
beginning to unravel.
But, lest we think they are a lone voice in the wilderness, lets consider what some other
respected sources are saying too:
...emerging trends are dramatically reshaping customer expectations in the personal
auto insurance market.
The internet has dramatically transformed consumer behavior and shifted their
interaction with insurance providers, as well as their expectations of quality...
So either the most respected industry observers are all passing around the same pitcher
of after school Kool-Aid, or, maybe we should pause, take stock and strategize.
Local agents still continue to make up the majority of auto insurance purchasing. But
as you can see from the chart on the right, overall consumers are shifting towards
purchasing auto insurance through less personal outlets.
What Do the Numbers Say?

You may not agree with McKinseys implications but that shouldnt stop you from looking
at the numbers yourself so you can draw your own conclusion. So lets take a look at
some important industry surveys and statistics so you can be armed with the facts and
then decide if this industry is really being disrupted or if its all hype.
The Consumers Gone Digital: They Expect Us To Do The Same

A common thread found in these studies is that the consumer has gone digital. More and
more people are using the internet to research insurance and get quotes. As you can see
in Figure 1, 71% of consumers use the internet to research insurance before making a
purchase. Compared to only 6% who use the Yellow Pages.
Consumers are not just spending more time researching insurance online, theyre also
requesting more quotes online. In 2010 there were 38.8 million online quotes submitted,
a 21% increase over the previous year. And of those 38.8 million quotes, 72% went to
GEICO, E-surance, and Progressive (See Figure 2 below).
And what about all those consumers who have not purchased online before? Well,
according to comScore in 2012, 35% said they were likely to do so. In 2009 only 30%
said they were likely. Clearly, the consumer is rapidly becoming more comfortable doing
insurance business online, just as they have become comfortable doing business with
other industries online.One last fact worth considering when it comes to the consumer
going digital comes from comScore, The number of customers who have only interacted
via digital channels in the past 12 months has nearly doubled in size, compared with
2007, and now represent approximately one in six customers. So one in six people ONLY
interact with this industry online.
How Technology Affects Customer Satisfaction

J.D. Power discovered a direct-line connection between the way consumers interact
with the industry and their overall level of satisfaction. Further, they identified a powerful
connection between consumer satisfaction and client retention, likelihood
to recommend and price elasticity.
J.D. Power identified five
main ways people interact
with the insurance
industry.
They either have:
1. No interaction.
2. Interaction with an
agent only.
agent who uses
emerging technology.
agent who uses
traditional technology.
5. Interaction with a
non-agent only.
Then they analyzed the customer satisfaction level of each of those five ways. Can you
guess which way had the highest customer satisfaction rating? If you guessed #3, agents
who use emerging technology, then youd be right. This was true for both Baby Boomers,
who had an overall satisfaction index score of 852, and Generation Y who scored 822. See
figure 3 on previous page for more information.
J.D. Power said, ...emerging trends are dramatically reshaping customer expectations in the
personal auto insurance market. In other words, the internet has changed consumers
expectations. Remarkably, their report did not analyze the quality of the communication
interactions, but clearly determined that the mere use of emerging technology generated
substantial financial benefits for the business.
Magic of 852
According to the research, an 852 Customer Satisfaction Index score will, overall, deliver a
reward of a 95.5% retention rate. However, a lower end score of 750 will punish the
business with a meager 82% retention (see Figure 4).
What does that mean for the typical agency? It means that for every million dollars in
income, the agency would see an annual bump of $130,000 and a remarkable cumulative
10-year increase of $3,694,595 by increasing their retention from 82% to 95.5%.
Maintaining a high Index Score is also important if you want your customers to refer you.
For example, the research shows that if you have a score of 852 then roughly 63% of your
customers definitely intend to recommend you. But only 29% if your score is 750. So the
bottom line is that customers are happy when you use emerging technology and when
customers are happy you make more money. I mentioned this quote from A.M.
Best earlier but its worth repeating here, The internet has dramatically transformed
consumer behavior and shifted their interaction with insurance providers, as well as their
expectations of quality...
10
Trend #2:
Carrier Behavior Has Changed (And the Rise of the Direct Channel)
Consumer behavior is not the only force thats leading this industry to a tipping point.
Local agents also need to be aware of major changes in carrier behavior.
One of those changes is what I call carrier personification. Theres now an advertising
persona most of the major direct channel brands. The reason this is so significant is
because its a signal to the retail side of the industry that carriers are increasingly
willing to develop a perceived sense of relationship directly with the consumer and
bypass the agency channel altogether.
11
More Carriers: Well Work Directly With Customers.

Their willingness to bypass the local agent is evidenced by the fact that P&C carriers
went from spending $1.7 billion in advertising in 2002 to $5.9 billion in 2011 (see Figure
5). Thats an astonishing 347% increase in advertising in the last decade. Theres no other
industry that Im aware of, that has seen such a significant increase in advertising in a
single decade.
Lets look at who the big ad spenders are (I think you can guess who #1 is). Well also
look at the result of what that type of advertising has done in terms of acquiring market
share for the top 10 private passenger auto insurers.
Well also review the auto market distribution by channel so you can see the trends over
the last 15 years. And finally we will review the combined ratio by channel in order to
determine which channel is most cost effective.
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Big Ad Spenders (And What Its Done for Them)

As you can see in Figure 6 the company who spent the most in marketing in 2011 was
GEICO. The direct insurer spent $993.8 million on marketing in 2011 (up 10% from the
$902.7 million they spent in 2010). Never before has a single car insurer spent that much
on marketing. GEICOs ad budget is not only high in terms of total amount spent but
also in the percentage of its overall ad budget. For example, according to SNL Financial,
insurers spent 2.4% on advertising on average. Whereas GEICOs ad budget represented
6.5% of the premiums it wrote in 2011. In comparison, State Farms ad budget was 1.7%.
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How Much Market Share Will Money Buy?

So what will $1 billion a year in advertising buy you in terms of market share? Well, see for
yourself. Figure 7 shows the percentage of market share for the top 10 private passenger
auto insurers in the U.S. and how its changed since 2002.
Although State Farm and Allstate maintained the #1 and #2 positions respectively, their
market share has diminished. Farmers went from #3 to #5. Progressive maintained their #4
position but their market share increased from 5.8% to 8.4%. And of course, the biggest
leap was GEICO, going from #6 at 4.8% to #3 at 9.7%, a major expansion in market share.
You can expect GEICO and Progressive to continue to grow and take market share from
the captive and independent channels. In fact, Warren Buffet said, There is still more than
90% of the auto insurance market left for GEICO to rake in.
Concentration of Carrier Market Share

Another trend thats been happening over the last 15+ years is the concentration
of carrier market share. In 1995 the top 10 carriers represented 58.8% of the private
passenger auto market share. Fast forward to 2012 and this grew to 69.8%, an increase of
18%. Also, in 1995 the top 25 carriers represented 69.8% of the market share and in 2012
that grew to 83.6%, an increase of 19.7%. So were also seeing a significant consolidation
trend amongst the top carriers.
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U.S. Auto Market Distribution by Channel

So how has this affected the captive and independent agency channels? Lets take a look.
Figure 8, from A.M. Bests report on market share, compares the auto market distribution
by channel based on premiums written. Starting at the bottom youll notice the
independent agents market share was at 31% in 1995 and in 2012 theyre also at
31%. You may think, Oh, no real change there. But look at the middle of that chart. In
2005/2006, when the consumer was really responding aggressively to the internet as a
legitimate channel for insurance, an erosion started thats continued to this day. Market
share went from 34 % to 31 %, a loss of 10% of volume in 5 years. This trend will continue
unless independent agents do something different (more on that later).
The captive, or exclusive agency channel has also dropped, going from 48% to 44%. So,
overall, the agents share went from 80% to 73%. And of course the direct channel is
whats eating away at the other two, going from 20% to 27%.
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What about Homeowners and Small Commercial?

Now lets take a brief look at homeowners and small commercial lines. As you can see in
Figure 9 there has been a minor erosion in homeowners, so that is something to monitor.
But the small commercial lines still seem to be in the sweet spot for both the captive and
independent agent, being virtually untouched by the directs. Middle market and large
commercial lines remain the safe harbor of the independent channel.
Billion Dollar Question: Who Has the Best Combined Ratio?

Which distribution channel is more profitable when it comes to combined ratio? A
popular argument I hear from independent and captive agents is that they do better
underwriting, so carriers will always have a bias for the agent channel. And, yes, its true.
The loss ratio of the independent channel (70.8) and exclusive/captive channel (74.1) is
less than the direct channels loss ratio (74.2).
However, when you add expenses and compare the combined ratio of all three channels,
which is what the CEO of a carrier looks at, then youll notice that the direct channel
posted the lowest combined ratio of 95.0 (see Figure 9). The agency channel posted an
average combined ratio of 97.3 and the exclusive/captive channel combined ratio was
98.2. And if were talking billions of dollars, an extra $2.30 out of every hundred dollars
adds up fast. Which is another reason why carriers are willing to bypass the agent to
increase their market share.
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Trend #3:
An Accident Free World
Now, lets discuss the third major trend in our industry: moderation in risk that could
potentially have a huge impact on private passenger auto premiums. Simply put, think of
the impact that an accident-free world would have on the auto insurance market.
According to a recent report by the research and consulting firm, Celent, titled, A
Scenario: The End of Auto Insurance: What Happens When There Are (Almost) No
Accidents, there are four forces at work moving us to an accident-free world. The report
describes a dramatic but likely scenario in which local and federal governments in the
U.S. would encourage or regulate the use of three currently available technologies:
telematics, collision avoidance and automated traffic law enforcement. Additionally,
they identify an emerging technology that may receive wide adoption sooner than most
people anticipate: driverless cars.
Consequently, there may be a very different world in regard to the amount of premium
and the amount of risk that flows through, not only the agent channels, but the industry
in general. And now is the time to prepare.
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The 4 Technologies Leading To An Accident-Free World

Heres a brief summary of the four technologies
1. Telematics: one example would be Progressives Snapshot. This is also known as User
Based Insurance (UBI). Progressive has recorded over eight billion miles in actual driving
records.
2. Automated Enforcement: this would be things like automatic red light cameras and
stop light cameras.
3. Collision Avoidance Systems: auto manufacturers have built several different collision
avoidance systems and identified the ones that have had a significant impact on
reducing the amount, and severity of accidents.
4. Robot Cars: last year, Google announced that their self-driving cars logged some
300,000 miles and that, there hasnt been a single accident under computer control.
To get a better understanding of how Celent predicts The End of Auto Insurance as we
know it, see Figure 10 below. In this diagram you can see how these four technologies
could theoretically go from an available technology, to voluntary adoption by the masses,
to a preferred technology and finally to a technology thats mandated by legislation.
When participants in the insurance telematics industry were asked, Will user based
insurance (UBI) impact the auto insurance industry, and if it will, how great will the
impact be? 95% of those experts said that this will have a medium to large impact on
the industry.
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A Quick Summary of What These Trends Are Telling the Retail Agent
Fear, despair, panic on one end. Denial on the other. Neither extreme serves the interests
of the retail agent.
Rather, we advise a sober discernment of precisely what the trends are and a seasoned
and appropriate strategic response to each of them.
A very brief summary of each of the three sources of change looks like this:
Changes in consumer behavior. The consumer in every generation has gone digital.
They have, so to speak, voted with their fingers, using their computers, mobile phones
and mobile devices to interact with the insurance industry. The silver lining? They have
made this clear: use emerging technology, and we will reward you. And those rewards
are material: in retention, customer acquisition and loyalty. Note: while the majority
of research focuses on the personal lines customers use of technology, our own firms
research reveals that the commercial lines buyer likely spends more time researching
insurance options online, having so much at stake with their purchase.
Changes in carrier behavior. The carrier community, as a whole, is moving in one
direction: toward a more direct relationship with the consumer. Just as they did with the
introduction of direct bill, carriers are absorbing more consumer-facing roles traditionally
owned by the agent: service, sales, and, of course, underwriting. Several major carriers
will continue to absorb agent market share. Others who rely on agents will likely
increase their consumer connection, even expanding their direct sales channels.
However, the savvy agent or broker will see a silver lining here, as well. The carrier
community is increasingly focusing their message to the agent: your job is to get and
keep good clients. As the value chain adjusts, the agents role is increasingly clear. Market.
Thats your job.
Changes in risk. Potential modifications in risk could affect the entire industry top to
bottom. If, in fact, we even approach an accident free world through the adoption of
accident-prevention technology, the volume of premium dollars flowing through each
channel could be significantly reduced. That said, its harder to find the silver lining. The
savvy agency strategist should consider this information carefully, creating lean systems
that deliver customer value as efficiently as possible, while pondering appropriate
diversification to the agencys book of business.
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A Simple Action Plan for Local Agents

Will you be like the CEO of Blockbuster and stick your head in the sand or will you choose
to think like Jack Welch when he said, Be thinking about the next jump. Its almost like a
chess game, you think the next move before its upon you.
If you believe these trends require a strategic response, then I urge you to take action.
And even though the forces at work in the industry are complex, your response to them
doesnt have to be.
Turbulent times cause confusion. A common tendency is to examine the competition
and copy them. For example, agents frequently look at the direct channel successfully
selling on price and think that will be their winning strategy. First, attempting to
out-GEICO GEICO is foolhardy. Second very briefly summarizing GEICOs successful
strategy as price driven is superficial.
One model to guide strategic decision making comes from recent research conducted by
the consulting and account firm of Deloitte, published in the book The Three Rules: How
Exceptional Companies Think.
The 3 Rules
Two of Deloittes directors, Michael
E. Raynor and Mumtaz Ahmed,
analyzed the financial statements
of 25,000 companies that were
traded on the U.S. exchanges from
1966 to 2010. From that
information they identified three
rules of behavior of the most
successful companies.
Rule #1: Be Better before Cheaper
In other words, compete on value differentiators other than price. Innovation is the
business of creating value. The retail agent must, increasingly, seek to add value, not just
pass it on. The local agent must get out of the commodity business and find ways to
delight your customers. For more information about this please email us and ask for a
copy of my book, The Agency Survival Handbook at support@agencyrevolution.com.
Rule #2: Revenue before Cost
This means you need to prioritize increasing revenue over reducing cost. Carriers are
increasingly clear on their expectations of agents: get and keep good clients. That
is the job of marketing, and, as other, former agency roles diminish, the agents job
becomes clear: be a great marketer. For more information about how other agents have
successfully grown, please email us and ask for a copy of The 10X Workbook at
support@agencyrevolution.com.
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Rule #3: There Are No Other Rules

Yes, that is Rule #3. If you do the first two nothing else matters. It really is that simple.
Now obviously the execution of these rules is complex and not easy but the big picture
focus is very clear. You need to focus on innovation and marketing.
Are these rules new? They seem to substantiate on empirical evidence what the great
management guru, Peter Drucker advised of 50 years ago:
Peter Drucker
Because the purpose of business is to create

a customer, the business enterprise has two
and only two basic functions: marketing and
innovation...marketing and innovation
produce results; all the rest are costs.
21
Conclusion.
Do these trends signal the unraveling of the agent channel?

A quick glance at another but related industry may give us a glimpse of the future.
The travel industry relied heavily on an agent pass through distribution system. The
internet and the consumers comfortable acceptance of it dramatically changed that
industry. to the surprise of many observers many travel agencies benefitted richly
from that disruption. While two-thirds of travel agencies were eliminated over a 15 year
period, the number of air-miles written through the remaining agencies grew by an
astonishing 370%.
As we look to the next 3-5 years in the insurance industry, its likely that well see fewer
agencies. But those who remain will be bigger, faster, more adaptable and smarter.
The future belongs to those who master two skill sets: marketing and innovation.
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Bibliography
McKinsey & Co. (2013). Agents of the Future: The Evolution of Property and Casualty
Insurance Distribution. Retrieved from, http://www.mckinsey.com/clientservice/
Financial_Services/Knowledge_Highlights/Recent_Reports/~/media/Reports/
Financial_Services/FutureAgents_V_FINAL.ashx
comScore, Inc. (2011). Online Auto Insurance Shopping Report. Retrieved from,
http://www.comscore.com/Insights/Presentations_and_Whitepapers/
2011/2011_Online_Auto_Insurance_Report
comScore, Inc. (2012). Online Auto Insurance Shopping Report. Retrieved from,
http://www.comscore.com/Insights/Presentations_and_Whitepapers/2012/
The_2012_Online_Auto_Insurance_Report
J.D. Power and Associates. (2012). Insurance Shopping Study: The Role of the Web in
Shopping for Insurance. Retrieved from, http://img.en25.com/Web/JDPower/
12_4894_ISS_MD%20FINAL_043012.pdf
A.M. Best. (2013). Special Report: U.S. Auto Insurance - Trend Review. Distribution
Trends Continue to Shift in the Private Passenger Automobile Market. Retrieved from,
http://www3.ambest.com/bestweek/purchase.asp?record_code=216745
Independent Insurance Agents & Brokers of America, Inc. (2011). Property-Casualty
Insurance Market: Opportunities & Competitive Challenges For Independent Agents &
Brokers. Retrieved from, http://www.independentagent.com/Resources/Research/
SiteAssets/MarketShareReport/default/2013%20IIABA%20Market%20Share%20
FINAL.pdf
Celent. (2012). A Scenario: The End of Auto Insurance: What Happens When There Are
(Almost) No Accidents. Retrieved from, http://www.celent.com/reports/scenario-endautoinsurance
23
Acknowledgements & Gratitude
My job, as I see it, is to look deeply at the insurance industry and tell the truth as I see
it. Ideally, if I see a problem and that is not a difficulty these days I can find or create
a solution, package it and deliver it. (Or, more likely, the members of my team at Agency
Revolution will create that solution.) Hopefully, it shows up on the desk or in the lives
of people who share similar values and want to fight for the retail delivery system (or
maybe just fight for their own agency). Best of all, it may show up with some elegance,
and, God willing, some beauty, too.
As they say at the Oscars, I have too many people to thank and apologize to those I
missed. But, at the very least, I must acknowledge:
Jeff Yates, who provided an inspriration to everyone who fought this good fight.
Enjoy your retirement, my friend.

Kathy Gorman, who has pushed me to deliver my best, and doesnt hold back if I
can get better.

Mark LaLonde, who remains one of New Englands relentless warriors for good.
Tom Reid and Deb Ambrose, who help Canadian brokers grab the future of
their dreams.

Kitty Ambers, who has asked me on repeated occasions, to say something that
matters. I hope I fulfilled.

And, last, but not least, my friend and proofreader of many years, Mary Ann Jestel,
who quietly but gently spotted my numerous errors. You, too, enjoy your
retirement. (I hope I didnt wear you out!)

24
Michael Jans
is the CEO and Founder of Agency Revolution. Independent Agent
Magazine called him the Insurance Marketing Maven, and Professional
Agent Magazine called him a marketing genius. His clients often call
him the Millionaire Maker because of the powerful marketing and
business strategies he delivers to insurance agencies.
He has created, or consulted on, marketing campaigns for 213 different
insurance niches. Michael has coached, trained and consulted with more than
11,000 agency principals over the last 20 years and is a popular speaker at industry
events. He is the author of The P&C Marketing Bible, The CSR Money Bible, The Agents
Road Map, The Agency Survival Handbook and over 37 courses, programs and workshops
on marketing and business strategy for insurance agents.
Michael was the Executive Vice President of the Professional Insurance Agents in Oregon,
Washington, Idaho, Montana and Alaska for seven years. And he ran the fastest growing
affiliate of The Certified Insurance Counselor Program. Prior to that he was the Executive
Director of several non-profits in the areas of poverty eradication, refugee resettlement
and community action.
His company, Agency Revolution, provides digital marketing solutions to insurance
agencies and employs over 30 people in Bend, OR.
Agency Revolution actively supports the work of Meals On Wheels, which was founded
by Michaels father, Paul Jans, in 1955.
For more information...
Michaels State of the Industry Address was first delivered at the 2013 Insurance
Marketing Boot Camp in a live, two hour presentation. To find out how you can get a
copy of this presentation, please call 800-606-0477.
To schedule a free demo of the Agency Revolution Digital Marketing System visit:
www.agencyrevolution.com/request-demo
You can also connect with us on:
Facebook (Company Page): www.facebook.com/AgencyRevolution
Facebook (Michaels Page): www.facebook.com/MichaelJansOnline

LinkedIn: www.linkedin.com/in/michaeljans
25
What industry leaders say about Michael Jans:

You can trust Michael Jans to tell the truth. Especially when we dont
want to hear it. As much as it hurts, pay attention. The future of the
agency force depends on it.
Brian Barrick, Nonprofit Insurance Services, PA
Michael Jans looks the insurance industry square in the eye - and tells
the truth. Agents would be wise to listen.
Ely Kaplansky, Kaplansky Insurance Agency, MA
Michael Jans isnt just the best marketer in the insurance industry.
Hes our best philosopher. Pay attention to what he is saying.
Jeff Rounds, Libke Insurance, WA
Nobody looks deeper into the soul of the insurance industry than
Michael Jans.
Tammy Leseuer, Bancorp Insurance, OR
When I met Michael he was known as the bad boy of insurance

marketing. Now he is the good guy for insurance success.
Keith A. Savino, Warwick Resource Group LLC, NY
26
Agency Revolution
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Bend, OR 97701
(888) 208-9239 - Sales

(800) 606-0477 - Customer Support
support@agencyrevolution.com - Customer Support
Take charge of your future.
Schedule Your Demo Now.

Call 888.208.9239 or visit www.agencyrevolution.com

State of The Industry - 3 Reasons Insurance Will Never Be The Same Again

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State of The Industry - 3 Reasons Insurance Will Never Be The Same Again

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The State of the Industry

3 Reasons Insurance Will Never Be the Same Again

What Happens When

Changes in Carrier Behavior

A Simple Action Plan for Agents

by Michael Jans | CEO Agency Revolution

the traditional agent

Copyright 2014 Agency Revolution, Inc.

What Happens When Trends Are Ignored

Case Study: Blockbuster

Neither RedBox nor Netflix are even on the

Copyright 2014 Agency Revolution, Inc.

Case Study: Kodak

Steve Sasson, Kodak Engineer

Copyright 2014 Agency Revolution, Inc.

...it was film-less photography, so managements

Case Study: General Electric

Jack Welch, General Electric Chairman and CEO

Copyright 2014 Agency Revolution, Inc.

Be thinking about the next jump. Its almost

What Did McKinseys Report Say?

Copyright 2014 Agency Revolution, Inc.

What Do the Numbers Say?

The Consumers Gone Digital: They Expect Us To Do The Same

Copyright 2014 Agency Revolution, Inc.

Copyright 2014 Agency Revolution, Inc.

How Technology Affects Customer Satisfaction

Copyright 2014 Agency Revolution, Inc.

Copyright 2014 Agency Revolution, Inc.

Copyright 2014 Agency Revolution, Inc.

More Carriers: Well Work Directly With Customers.

Copyright 2014 Agency Revolution, Inc.

Big Ad Spenders (And What Its Done for Them)

Copyright 2014 Agency Revolution, Inc.

How Much Market Share Will Money Buy?

Concentration of Carrier Market Share

Copyright 2014 Agency Revolution, Inc.

U.S. Auto Market Distribution by Channel

Copyright 2014 Agency Revolution, Inc.

What about Homeowners and Small Commercial?

Billion Dollar Question: Who Has the Best Combined Ratio?

Copyright 2014 Agency Revolution, Inc.

Copyright 2014 Agency Revolution, Inc.

The 4 Technologies Leading To An Accident-Free World

Copyright 2014 Agency Revolution, Inc.

Copyright 2014 Agency Revolution, Inc.

A Simple Action Plan for Local Agents

Copyright 2014 Agency Revolution, Inc.

Rule #3: There Are No Other Rules

Copyright 2014 Agency Revolution, Inc.

Because the purpose of business is to create

Do these trends signal the unraveling of the agent channel?

Copyright 2014 Agency Revolution, Inc.

Copyright 2014 Agency Revolution, Inc.

Acknowledgements & Gratitude

Copyright 2014 Agency Revolution, Inc.

Copyright 2014 Agency Revolution, Inc.

What industry leaders say about Michael Jans:

Brian Barrick, Nonprofit Insurance Services, PA

When I met Michael he was known as the bad boy of insurance

Copyright 2014 Agency Revolution, Inc.

698 NW York Drive

(888) 208-9239 - Sales