Advisers have received a guarantee that artificial intelligence (AI) and other technologies will not be replacing them and their jobs as the “money is betting on the agent”.
The World of America Convention also heard that the valuations of advice businesses is only likely to increase as new technologies allow firms to do more and reach into different markets.
Speaking at the World of America Convention, American Fidelity president Ana Gomez was emphatic that instead of being a threat, AI would be a boon to advisers.
“We have an enormous opportunity in our hands, enormous,” she said.
“Every day we hear threats that artificial intelligence is replacing many jobs, but I guarantee you that insurance adviser is not one of them.
“There have been thousands of experiments trying to reach customers, specifically directly from the insurers, and they haven’t succeeded.
“Everyone who sells life insurance knows why; it’s because it is a product sold heart to heart – it is a 100% emotional sale where we, as human beings, are the only ones who can awaken that need in another human being.”
Gomez praised advisers for the role they play in ensuring customers get the protection they need.
“We know this is a spectacular job and artificial intelligence is simply going to allow us to do that job much more efficiently and I thank all of you who do this work day in and day out, which we know is not easy,” she added.
‘Money is betting on the agent’
This position was highlighted by Vumi Group president and CEO David Rendall, who recognised that the insurer would also need to work with intermediaries.
This was in part due to the critical role advisers play in building trust with their clients.
“I could never see a future where we don’t work together, so I think the agent is always going to be an important part of the process because that’s where the client has trust,” he said.
“There’s already a bias that the client thinks the insurer doesn’t want to pay because they make more money for not paying, so automatically the client’s going to trust their broker or their agent – that’s just kind of fundamental.”
He also emphasised that the value of advice firms was soaring.
“You can look at multiples for agencies in the US and in private equity,” he continued. “They’re the highest multiples that have ever existed. They’re probably 20 times forward earnings, whereas 10 years ago, they were trading at six to eight times historical earnings. “So that tells you that the money is still betting on the agent and that’s where the future is.”
‘Enviable position’
Echoing this point, Investors Trust senior business development manager Carlos Pombo told the audience they were in a great position.
“You are actually in a very, very favourable position in my opinion,” he said.
“The value of your companies is going to have excellent multiples because artificial intelligence is going to put you in an enviable position where you can react much faster, but combine that with the diversification factor.
“That will also allow you to sell not just life products but allow the famous cross-selling of health, personal accident, and disability insurance, all in a single sale, because systems and technology will help you in that regard.
“That is going to be favourable for you as advisers and for us as companies too, and obviously for the providers,” he added.
Agent will be fundamental
Redbridge business development vice president Richard Irures agreed that agents and advisers would remain a core part of the insurance market landscape for years to come.
“We think the role of people in the international market, whether in health or life insurance, or any type of business, is going to be fundamental in all the years to come,” he said.
“It is unlikely that the current generation, or the generation that will be primary in the next 10 years, would prefer to buy from an official AI rather than from an agent. However, the agent’s work is going to be more optimal.
“We think that where it will have the most impact is internally within the insurance company. Service in a general sense is going to be much, much easier for the agent, it’s going to be much more efficient for the agent, and that will be passed on to the client.
“But in our opinion, the role of the agent is never going to stop being a primary role in the international business.”
Advisory role is ‘irreplaceable’
World of America Global Partners president Maikel Garcia agreed and highlighted that the developments were an advantage for those operating in this segment.
“David Rendall mentioned it, the valuations of brokerage firms have grown enormously because distribution is irreplaceable,” he said.
“Although we have a concept where technology is going to start changing things, technology is going to have a very strong impact, it is going to generate many efficiencies.
“That is our advisory role, it is irreplaceable because it is the role where, no matter how much technology there is, it cannot understand the specific reason of that family, of that person – the specific moment in that time, and that is going to be the most difficult part for it,” he added.
