Digital isn't doomsday
21 Dec 2016
Hammad Rafique, Managing Director of Accenture Insurance Practice explains how brokers can use technology to reinvent themselves.
It started with Direct Line. And then price-comparison websites. The demand for quick, accessible quotes meant consumers flocked to access insurance at the click of a button.
Brokers in general insurance felt the initial shock of disintermediation, which threatened to leave them alone with the niche customer.
Aftershocks continue. With the rise of mobile transactions, masses of connected data and InsurTech start-ups keen to poach customers from your incumbent insurance partners - general insurance is set for more disruption.
All this and there is also the looming presence of intelligent automation reducing risk and redefining liability - perhaps best personified by the driverless car.
Data and analytics will be able to determine risk and GI insurance programmes with less friction than the most highly-experienced broker.
Nonetheless it's not doomsday, because my message is this: the very technology that has disintermediated general insurance, could provide the very opportunity for brokers to reinvent themselves and get closer to the customer than they have ever been.
Technology is changing how we live and consumers living in a digital age are driving new patterns of behaviour. How will brokers adapt to a world where millennials poised to purchase insurance - don't own assets? How do they serve consumers lured by peer-to-peer products that make incumbent insurers shake in their suits?
Let's wind the clock forward and look at when my children will be of driving age. Firstly, they probably won't have to learn to drive. They might choose not own a car as it will be a utility.
They won't buy insurance as it will be baked into the miles they travel. They might not make a claim as that will be automated. They'll be digital-natives who expect levels of personalisation, additional services and on-demand accessibility. And so, we face a new battleground to win over the digital customer.
And this is the sweet spot. Brokers' skills and experience are still critical for many customers seeking independent advice and value. But their role is changing.
Remaining relevant in the new, digital insurance age requires traditional brokers to become digitally sophisticated and allied with a wider group of partners. They need to focus more on strategic risk advice, delivering transparency and control, as well as providing value add services.
Forward-thinking brokers are embracing innovation already. Look at, Simply Business, an online-only broker that uses data-driven analytics to develop tailor-made products for small businesses.
They are using digital tools to lure customers with convenient, customised offers that don't promise to settle claims, but reduce risk.
Incumbent brokers and insurers can be first in line to take up the opportunity. They have the advantage of relationships, brand recognition and a customer base that can offer a better service with digital technology.
In doing so, you'll need the right products and services for the digital customer to experience. They'll be attracted by personalised and highly-relevant interactions with you.
They want the prospect of financial savings and its potential to improve their quality of life.
And finally? You'll need the right digitally-minded people to make it happen. Becoming a future broker is an imperative, not an option.
- Insurance Age