Can brokerages maintain relevance while adapting to the demands of an evolving digital landscape?
The insurtech revolution has helped accelerate the industry-wide efforts of insurance incumbents to digitally transform everything from their core systems, to products, to distribution. As modern customers become more and more accustomed to automation and digital self-service (not to mention doing their own research and comparison shopping before purchasing a product), traditional insurance intermediaries may seem like an increasingly antiquated model for buying and selling. But for those brokerages willing to evolve their approach (and act with some urgency), technology can be a friend, not a foe, introducing novel methods for serving today’s clients better.
Digital platforms have led to enormous changes inside the industry, particularly when it comes to health insurance and other personal lines of coverage (i.e. auto, life, and on-demand insurance). But while these buying trends and changes in customer behavior may feel threatening to traditional brokerages, in other, more complex areas of insurance (like commercial, property and casualty insurance) there’s still a significant need for advice and expert counsel -- the human element.
In light of this, some insurtechs are working to introduce efficiencies inside the broker value pipeline, rather than wholesale robo-replacement. Doing so means leveraging the advantages of both worlds -- human empathy and flexibility alongside streamlined, optimized digital experiences. By automating and improving processes that support some of the agent/broker’s most essential, yet time-intensive duties (i.e. quote writing, lead generation, risk-assessment) you can eliminate costly administrative tasks leaving brokers to focus on higher-value activities, like servicing their client relationships.
From automated marketing tools, to AI-driven platforms for online customer acquisition, to personal digital insurance managers -- insurtechs are hard at work, developing a range of cloud-based SaaS software for brokers and insurers to adopt in order to modernize and digitalize their offerings. Though these technologies certainly work to expand a broker’s digital toolkit, they may also be fueling anxiety for some traditional intermediaries unsure of how they fit into an increasingly digital future.
Changes to the traditional brokerage model are inevitable. Some hypothesize there will be a widespread broker consolidation due to digitalization. Others see the growing self-service end of the market as enough of a threat to lead to a repositioning of the entire industry -- from intermediaries to risk advisors. This new emphasis would put the focus on a broker’s ability to provide expert advice to prospects and clients. As part of this repositioning, brokerages (and insurers) would need to emphasize specialization within their ranks, making training and development one of their new priorities.
While we can’t say with certainty what the future looks like for brokerages, we do know they have a very real opportunity NOW to transform their offerings inside of a growing digital-first market. For brokers to establish themselves inside of today’s insurance ecosystem, collaboration will be key. Looking for value-add partnerships will help intermediaries build much-needed alliances with incumbents and insurtech startups and position them for new, mutually-beneficial business opportunities.