Canadian Underwriter
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Sending out an SMS


February 4, 2020   by Adam Malik, Managing Editor


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There’s a powerful tool at the fingertips – literally – of every business to communicate with their clients, but few are taking advantage of it: text messaging.

Yes, the short messaging service (or SMS, the technical term for text messaging) can be a powerful tool for brokers. Customers want to communicate with businesses via text but businesses are dragging their feet.

EZ Texting, a texting software company, found that small businesses are missing out on opportunities like promoting products, generating leads, and making sales – all of which would help grow their business – by not texting their customers. Almost 70% of customers told the company in a survey that they want to connect with businesses via text, but only 13% of the organizations in the survey reported that they are in fact texting their customers.

According to the Canadian Radio-television and Telecommunications Commission, the regulatory agency for broadcasting and telecommunications, there were 31.7 million mobile subscribers in Canada in 2017. That suggests 87% of Canadians owned a cellphone (and 78% owned a smartphone). Between 2014-17, Canadians sent and received an average of 513 million text messages daily.

“We find that the majority of the customers prefer text message communication for reminders, versus older communication methods such as phone calls, letters or emails,” says Scott Irwin, technical director of Brokerlink Software Inc., a software solutions provider for auto insurance in British Columbia. The company has offered an automated texting and email reminder service called BCautorenew for the last six years. Brokers in the province use the software to send customized and personal text and email reminders when a policy is expiring.

Its emergence is reminiscent of email. Businesses were slow to adopt the method because, they rationalized, who would want to communicate through an elecronic message when you could call them? Nowadays, the phone is quite literally right there in your client’s pocket, only it’s not a phone call they want – it’s a text.

“Text messaging is less intrusive than phone calls,” Irwin adds. “A phone call can occur during a very inconvenient time. A text message, on the other hand, can be read and replied to when it is the most convenient for the customer.”

Texting is quick and virtually guaranteed to be read, according to EZ Texting, which reports that nearly 100% of all text messages are read; half of them within three minutes of arriving. Greg Kruk, partner at Toronto-area brokerage Sentinel Risk Insurance Group, attributed that to the intimate nature of a text message compared to the informality of an email.

“There’s more of a personal touch with text,” he explains. “If you have a text relationship with your broker or insurance company, it seems to be a bit more intimate than email. It’s usually a one-on-one communication over text.”

In contrast to a canned email that reads “Dear valued customer,” a text message is more specific to the client’s personal situation. Basically, it’s not spam, says Adam Mitchell, president of Mitchell & Whale, a brokerage in Whitby, Ont.

“Your cellphone doesn’t have a spam bucket. It’s not currently inundated with a lot of other spam,” he said. “People are paying way more attention to SMS than they are to their email. I don’t know about you, but I can’t keep up with my email. But I text almost everyone back and certainly read most everything [that is texted to me].”

It’s easy to miss an email, less so for a text. “From our experience, we find that customers prefer text message because it is faster and more convenient,” Irwin says. “The average inbox these days has too many unread messages and the reminder email can be easily lost or overlooked. There is a reason why people text more than email for short messages.”

However, Kruk warns, a customer’s text message inbox may one day resemble his or her email inbox. “The problem is, if every business starts dealing with the clients through text, it’s just going to divert the problem to SMS messages as opposed to email,” he says. “That would be my opinion – people want text because they might only get a dozen texts in a day, so they’re not going to miss one.”

Therein lies the future challenge for text messaging. It’s a great tool now because it’s not widely used. But once it is, then what? It’s all about staying on top of the latest technologies, Irwin advises. “In the future, something different and better will most likely come along and become more popular than texting,” he says. “Brokers should constantly keep track of what technologies are available to best meet current preferences.”

That’s not a problem as far as Mitchell is concerned. Texting shouldn’t be a brokerage’s only form of communication with customers. It’s simply another tool at a broker’s disposal.

“Would you ever give up email?” he says. “It’s the same sort of thing now with texting. I just think it’s a foregone conclusion. Everybody has a cellphone; everybody can text. It’s now a legitimate standard form of communication in our modern day.”

There’s a time to use text and a time to use email, Irwin says. “A text message should be short and concise. The message cannot have the same amount of content as an email or a letter.”

Brokers need to keep in mind that they can’t do everything by text, like binding coverage. A text, Irwin stresses, is for fast and simple communication. “Customers can ask questions via text and receive answers almost instantly.”

But data can be collected via text, such as the make and model of a car, leading up to binding a policy, Kruk says. Brokers can then send a quote back via text. Or it may be the contact information of a lawyer when buying a house.

“You can collect photos of ownership, accidents and houses,” Mitchell adds. “You can chat back and forth about when you can connect.”

Kruk cautions that brokers need to be careful about privacy concerns. “It’s hard to send private information over text,” he says. “You’re not going to send claims information or stuff to do with court cases.”

Plus, there are limitations around what can go through text. Some things, like cancellations, must be done through registered mail. Given “how litigious it’s becoming in Ontario, we’re making sure our documentation has all the I’s dotted and T’s crossed,” Kruk says. “With text conversations, it’s hard to make sure that’s being done.”

Still, Mitchell encourages all brokers to get on board. “I really think it’s being over-thought. No one says, ‘How dare you text me?’”

Furthermore, Mitchell says, you can carry on multiple text conversations at one time, as opposed to being occupied by only one phone call at a time. “I think it’s as much to do with being available to our customers as how they would like to communicate with us,” Mitchell added. “If they would like to chat on Facebook Messenger, text, whatever, we want to be there to receive it and respond.”