CEO and Co-Founder at COVU.

Even in our self-service world, many consumers still prefer personal interactions with the people helping them manage their risk, including healthcare providers, financial advisors and insurance agents.

In the insurance space, larger carriers have made significant headway in technology, offering apps for consumers to file claims and creating online portals to manage policies. But independent agents have often been slower to roll out tools that help consumers or better manage their own operations.

Often, as these independent agencies grow, administrative tasks start to become more complex and begin to pile up. Owners and agents may find themselves spending too much time managing back-office tasks and not enough time proactively engaging with customers. In fact, McKinsey reported that agencies struggle with managing back-office workloads, which led to a drop in customer satisfaction and financial performance.

Automating common agency tasks can streamline day-to-day operations, giving agents more time to focus on customer service, cross-sell and help customers more effectively reduce risk. Using the right technology can speed service delivery and save considerable business hours each year.

Successfully implementing automation technology and artificial intelligence (AI) tools into insurance business operations can have an impact on quality and efficiency, helping agents build stronger, more personal relationships with customers. But it’s difficult to know where and how to implement these tools.

For insurance agencies considering modernizing their business practices, here are four areas where technology can benefit both the business and its customers.

1. Accurate Data Collection

Data is at the forefront of how organizations learn, grow and develop customer relationships. Agencies generate most leads from their website, but getting these leads to provide the necessary information upfront isn’t always easy. Incomplete applications mean staff may spend hours following up with prospects, gathering missing information and suggesting appropriate coverage options. By modernizing the data collection process, agencies can refocus on what’s most important—the consumer.

Solutions such as implementing a reliable online customer relationship management system, sales database or lead funnel can lower manual inputs and reduce human error, resulting in a clearer picture of the customer’s needs right at the beginning of the relationship.

Gartner research has found that “organizations believe poor data quality to be responsible for an average of $15 million per year in losses.” This inability to manage data has negative consequences that lead to low-quality or unsatisfactory customer experiences. It may cause agents to recommend the wrong policy or miss important opportunities to upsell. By better managing data collection, agencies are in control of what parameters they measure, who manages it and how to utilize it, all without the worry of human error.

2. Personalized Marketing Communications

Effective personalized communication with customers and prospects can boost client relationships and increase team productivity. Instead of relying on agents to manually email new service information to all clients, send reminders or schedule meetings, marketing automation tech can help categorize customers, automatically send outbound marketing emails and alert agents to tasks they need to complete. Better data collection can also work hand in hand with marketing to ensure that agents are always communicating with clients to build stronger relationships.

To effectively use personalized communication to engage customers or sell new services, agents need to understand the customer need, have access to the right tools and platforms to manage outbound email campaigns and have the resources to do an effective follow-up.

3. Cross-Selling To Reduce Customer Risk

With millions of dollars of policies under management, it’s difficult for agents to know which customers may be missing critical coverage or which ones may be ready to update their policies due to changes they’ve made in their personal lives. But today’s variety of AI tools can help automatically review customer data and policies and proactively flag customers who may present an opportunity.

For example, a policyholder who recently bought and insured lakefront property may also be in the market for boat insurance. Or customers living in an area prone to hurricanes may need to consider flood insurance as the climate changes and new areas experience natural disasters.

Automation and AI can take the burden off of agents to catch every potential opportunity. It can be used to automatically find sales opportunities, identify underused policies that could benefit the customer or even proactively share new services information with policyholders to fill gaps in their risk profile.

When agents don’t have to search through extensive data, they have more time to work one-on-one with customers to explain new personalized insurance products and show their value by reducing customer risk. This elevated approach to customer service creates more loyal and protected customers. Before implementing automation or AI-driven tools, make sure to have your customer data organized and talk to peers in the industry to see what tools they are leveraging.

4. Improved Fraud Detection

AI and machine-learning-based tools can also help insurers spot unusual patterns in data. For example, by comparing new claims to existing customer data, software can help automatically detect claims that appear to be unusually high and potentially fraudulent. Using this technology, agencies can identify unusual patterns in data that the human eye might miss and reduce the possibility of fraudulent claims that can impact an agency’s reputation and revenue.

Modernizing your independent insurance agency doesn’t need to be complicated. Many tools now exist that are cloud-based and easy to install and learn. Agencies that automate back-office processes typically see an increase in overall productivity and profitability—uncovering easier ways to streamline claims processing, rapidly digitize documents, manage for faster underwriting and free up time to create more personalized relationships with policyholders that can reduce risk—both for the agency and the customers.

Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?