Travelers Chairman and CEO Alan Schnitzer said that independent agents and brokers still have a place with the insurer even as it continues exploring InsurTech innovations for its operations.
“Yes, for a long time we have been an independent agent and broker company, and I think we will be for the foreseeable future,” Schnitzer said during the company’s July 19, 2018 second-quarter earnings call. His comments came in response to an analyst’s question about how InsurTech might affect Travelers’ use of agents and brokers down the road.
Travelers has invested in new distribution models, such as its 2017 acquisition of U.K.-based Simply Business, a digital provider of quick, customized small business insurance policies. But Schnitzer said that Travelers will continue to try InsurTech innovations in multiple areas.
“InsurTech goes well beyond distribution,” Schnitzer said, pointing out that the insurer would be receptive to investing in the technology for use in other areas, such as “collection and leveraging of new data sources, leveraging artificial intelligence and using drone technology to reduce claims costs.”
“We think aggressively about using innovation across the entire value chain,” Schnitzer said.
In any case, he said that InsurTech investments in new direct-to-consumer distribution models aren’t terribly huge just yet.
“At the moment, where you see distribution on a direct basis in commercial insurance, it is micro,” he said. “It is really, really small stuff. But we do see it; there is something of a trend there and we’re not going to miss it. We will see where it goes and how fast it goes, but we’re on top of it.
Schnitzer termed Travelers’ investment in technology as “a very active innovation agenda” that is “important for us and for this industry.”
One of the analysts asked how the budding trade war and tariffs launched by U.S. President Donald Trump may affect Travelers’ bottom line. Schnitzer said the insurer is watching things closely, particularly how tariffs might affect inflation and loss costs. But he’s not too worried at this point.
Schnitzer said that tariffs would generally affect “short term” lines but that Travelers could react to any situation that transpires.
*Andrew Simpson contributed to this story.