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June 17 2013 | Mark Breading

Much has been written and debated about usage-based insurance, enabled by telematics technologies. But one aspect of the conversation that has been largely ignored concerns the implications for agents and brokers. The vast majority of P&C companies in the US use the independent agent distribution channel, and Canada is even more dominated by broker distribution. What are these agency companies and the agents and brokers themselves going to do about UBI? A new SMA research brief, Telematics/Usage-Based Insurance: Implications for Agents, addresses this question head-on.

SMA research has revealed that agents and agency companies believe UBI programs will be more difficult to implement in the agent/broker market, and those agents and their companies will be less successful than direct writers. However, there are some that believe that UBI represents a new opportunity for agents and brokers to grow their businesses and win against direct companies.

Currently, the dominant business model for UBI in North America is auto insurance with lower premiums. Insurers must develop other value propositions to address the needs of different segments. These new value propositions, with value-added services, and opportunities to collaborate on safety and risk management, will play to the strengths of agents and brokers and the companies they represent. The key will be to focus on education, new product/service offerings, and to address the role of the agent in the process.


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To learn more, please contact:
Mark Breading
Partner
Strategy Meets Action
614.562.8310