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May 2020

Insurance brokerage in the era of connected customers

Source: Asia Insurance Review | Oct 2016

Brokers need to leverage on the right processes and technology to drive their businesses to engage customers and meet their needs, says Mr Subramanian Gopalaratnam of Xchanging, a CSC company. 
There is a global deluge of increasingly complex, disruptive and under-insured environments. Multiple causes from climatic, geo-political and simple globalisation are wreaking havoc. Traditional areas of insurance are being rewritten both due to technology (factors like driverless cars) and connected customers. Insurance brokers are ideally positioned to help coordinate between customers, corporations, carriers and policy makers. But to do this, they have to rethink how they operate and lead.
   As the traditional facilitator in the risk transfer chain, brokers can create innovative solutions that provide relief to the changes in the risks and also create technology-led customer solutions.
   The key questions a broker should ask are:
• Do I have the capability to address these changes?
• Am I effectively creating a customer experience that ensures my customer gets the best experience?
• Can I respond quickly to keep pace with the market and risks?
Key challenges faced by brokers 
Technology, especially internet influences like e-commerce, has effectively helped take away the intermediary, putting a lot of pressure on the broker community. For commodity insurance, the new generation of customers are not too bothered about traditional relationships and they want to start digital relationships. 
   The insurance industry is at the crossroads of modernisation. This means that the broker has to have multiple ways of engaging with carriers and customers. The key challenges a broker is currently facing or will face are:
• Ability to provide uniform digital relationship to a customer;
• Ability to provide upgraded product information (driverless cars, cyber security, genetic data theft, risk changes such as solar panels installation on fire coverage etc);
• Ability to engage customers on a smart device;
• Ability to introduce new products from the carriers to customers or prospects effectively.
Who will succeed in the new age of insurance? 
A successful broker provides a holistic experience to their customers at all stages of a relationship. Educating customers based on the changes in the regulatory, risk and financial environments is a must and not one size fits all. This requires a broker to have the ability to publish content that can be consumed by different customers where appropriate. Proactive engagement is also a must. All interaction points should be properly evaluated and continuously improved. As a broker, the following are the key areas to succeed:
Capability – Content, transaction and analytics. Also ability to leverage social engagement is a must as this will replace the traditional referral schemes. 
Customer experience - Ability to engage a customer through personalised content, transaction ability and effectiveness of engagement digitally.
Response – Ability to provide seamless response to all queries and requests – this is only possible if your IT systems are simple and flexible to adapt to the changes in the carrier’s integration standards. 
What it takes to succeed?
Technology will be a major driver in the future of insurance brokerage. Other industries such as securities are leading the way and a brokerage should replicate this. 
   By adopting streamlined technology, a brokerage can expand from small P&C to large specialties in the near future. By showing value to both customers, in terms of digital relationship and customer experience, and carriers through the ability to bring a large pool of customers and reducing the overall cycle time and cost, a brokerage will be relevant in the foreseeable future. The following are the key areas to take action:
Capability – Undertake an audit of capabilities and find the key gaps to fix (both IT and talent). Make processes simple and straight through.
Customer experience – Create unique customer experiences by empowering self-service both online and mobile. Key focus should be on understanding your customers.
Response – Simplify interfaces between brokerage IT systems and carriers to enable faster response to customer queries. Large brokerages have embarked on adopting standards like ACCORD. 
   Finally, to succeed a brokerage should:
• Get the basics right
• Focus on clients to identify and close any gaps between their legitimate expectations and what they deliver
• Recognise where things have or could go wrong, and fix them
• Make it easy to do business with them
Some words of caution
Not everything can be solved by technology alone and a brokerage should retrospect the processes underneath. Automating a broken process will make it worse! Depending upon the maturity of the carriers you are dealing with, the ability to integrate seamlessly into their technology stack can be challenging. 
   In this case, you will need to rely upon a manual or semi-automated work around, which may require you to think of adopting to a workflow or process automation solution. A sound business case is a must to undertake even for a small digital transformation, and use a trusted and experienced partner to get it done. 
To be competitive and scale the business in the coming years, a brokerage must:
Be ahead of the curve – Make sure your brokerage system is modern and flexible. This will help you in offering more products, make it easy to expand operations across multiple locations and optimise cost by reducing manual or paper work. Also consider utilising cloud technologies from reputed providers to reduce CAPEX and leverage on expansion capabilities. 
Provide digital channels and choice – A recent study found that around 75% of customers use more than three channels when interacting with an organisation. A brokerage must arm its employees with easy-to-use tools that allow them to interact with customers and prospects via online, social and mobile channels.
Leverage data – As a broker, you are sitting on a wealth of data (both risk and customer). Use this data to predict customer characteristics to effectively introduce new products and help them in their decisions. Also, there are monetization opportunities based on habits. A brokerage can add value to carriers by providing feedback on what customers are looking for and how they can help.
   Technology is a leading factor that can catapult brokers into the future. Ability to leverage technology to improve capabilities and meet customer expectations will be key to establishing a broker’s role as a trusted adviser and help scale business.
• Technology will be a major driver in the future of insurance brokerage; and
• To succeed, brokers should have a modern and flexible IT system, provide digital channels and choice to customers and leverage the wealth of data they have.
Subramanian Gopalaratnam (Mani) has been heading the architect team in Xchanging (a CSC company) for over a decade and holds the position of CTO & Global Head of Innovation. He has over 30 years of experience in providing IT solutions, architecting and leading technology teams. 
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