Last few years have seen quite a disruption in the insurance market. Direct insurance players have used emergent technologies to not only increase their market reach but also disintermediate brokers, particularly in the personal lines business.
Today, less than 50% of premiums in personal lines are handled by brokers and it is expected to drop significantly in coming future. Corporate brokers have been moderately unaffected by the direct insurance industry as they have morphed from insurance facilitator to that of a risk advisor.
However, corporate brokers continue to face cost pressures, especially due to enhanced compliance costs. From the Broker’s point of view, this situation has been intensified by the fact that many Corporates are now employing their own risk managers, many of whom were brokers in their former lives so have the same skills. Also, the identification and management of risk have become extremely complex and technical that often the broker is quite simply unable to explain the risk.
Continued survival and relevance of brokers depend on their ability to innovate their business model. Brokers need to embrace technology to reduce the cost of delivery, but also personalize services across various customer segments.
Towards achieving market relevance and stay competitive, insurance industry players must:
- Benchmark client coverages and programs; increase client deliverables and carrier relationships.
- Recognize new business and growth opportunities across the portfolio.
- Drive insights using analytical tools customized to individual roles and responsibilities.
- Acquire continuously enhanced intelligence on carrier appetite, client information, and associate expertise.
- Learn to manage both structured and unstructured data; provide quotes online and send and electronic policy.
Amongst the several benefits that will accrue to the insurance players, nothing will weigh more valuable that real-time visibility and quick response. This will help them not only to boost new sales and increase retention but also effectively manage business relationships.