Broker Week 2022: Evolving insurance business models

Brokers must adapt to keep up with the evolving insurance ecosystem. And, they must show they have the connectivity, flexibility, and agility to maximise the opportunities these changes will bring.

Intermediaries are seeing an increase in demand for different routes and avenues to reach their customers and distribute products more efficiently. The successful adoption of technology will help brokers evolve into digital-first companies that can distribute and service products across all customer touchpoints.

However, they will often need to team up with insurers, insurtechs, and technology partners within the ecosystem. By teaming up and changing their business models to create more value in their processes, they will ultimately provide more value to their customers.

Peter Blanc, CEO of Aston Lark Group, says: “Technology – both as an opportunity and a threat – should be on every broker’s agenda as a standing item; brokers need to be constantly monitoring the landscape and seeing how technology can help them to serve clients better, save money or win business.

“The challenge is the temptation of status quo… it’s so easy to say, ‘we have systems that work, so let’s not bother exploring alternatives’ – but time marches on quickly, and the agile and curious will be far better placed than those ‘stuck in the mud’ brokers.”

Digital acceleration

The Covid pandemic prompted an increase in online business that looks permanent. The opportunities this affords insurance distributors have seen many brokers accelerate their digital strategies. Brokers can no longer afford to be ‘stuck in the mud’, as a digital strategy is essential for the future.

Applying this transformation successfully gives firms the core capabilities to manage all sales and servicing workflows, online customer interactions, and insurer connectivity. After technology eliminates mundane tasks, brokers are free to spend their time generating revenue and servicing clients.

However, brokers’ natural strengths and expertise usually lie in distribution, risk management, or client relationships – not technology.

Blanc says: “Tech isn’t top of many brokers’ skillset list, so partnering with firms and individuals who can bring these skills to the table is a sensible way to benefit from it. Insurtechs desperately need distribution, and brokers provide this in spades, so a naturally synergistic partnership is possible.”

According to Blanc, brokers should aim to partner with insurtechs, insurers, trade associations, and affinity groups.

“In short, anyone that brings similar groups of clients together,” he adds.

The increase in online business since the outbreak of Covid in 2020 has impacted insurance just like many other industries. However, by using technology to create a competitive edge, brokers can improve their communication with customers and employees.

This has prompted more companies to move to the cloud. Hosting in the cloud is more secure than ever and makes working remotely more accessible for the insurance industry.

Connectivity

Connectivity is critical to provide the best advice to customers. Insurer connectivity enables access to markets otherwise unknown by searching insurers, MGAs and wholesalers with an appetite for a specific risk.

Digital brokers will have an advantage in finding the best markets and identifying and highlighting policy differences for new business and renewals, making them risk advisors to personal and commercial lines customers.

This will allow them to generate significant business value in growth, efficiency, customer satisfaction, advice, and trust. Increasingly customers want 24/7 support from brokers, and technology can provide the solutions to make this happen.

Blanc says: “Enabling customers to self-serve online should they choose to do so is a great tool that only a few brokers have been able to introduce. For complex commercial insurance, where such tools don’t exist, we simply must ensure that we are available for customers via phone and the web. Using tech to help enhance the user experience for customers is vital.”

As the business models of the insurance industry continue to adapt to the demands of the future, it is imperative that brokers also evolve using technology to access a more comprehensive range of products and become better risk advisors. By staying connected and agile, they can maximise opportunities from partnering insurers, insurtechs and technology providers.

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