Furthermore, brokers can utilise data to disrupt other sections of the regulated financial services market, looking to offer adjacent services to clients, says network’s head of sales

By Editor Katie Scott

The Covid-19 pandemic undoubtedly altered the technology goalposts of the insurance industry, with new, digital-centric propositions popping up left, right and centre at pace – not only in terms of products, such as creative parametric or embedded insurance offerings, but also to finesse back office systems and functionality.

Katie Scott_bw_path

Katie Scott

Creating and curating an ecosystem of technology-fuelled insurtechs to support this type of evolution should be high on the agenda of future-focused brokers, according to Mark Cliff, chairman of Hastings Direct.

He believes that “one of the big messages of the climate that we’re in today is you don’t have to do it all yourself”, ringfencing this as “a big opportunity” for brokers to “plug” into the different types of expertise that insurtechs can offer.

Speaking at webinar hosted by market intelligence firm Insurance DataLab, titled ‘The future of broking in the UK’, Cliff said: “I’d encourage brokers to think about that ecosystem. If you haven’t done it, do a map of who are you dependent on for you to achieve what you need to achieve. What does that look like? How close of a relationship have you got with [firms within your ecosystem]?

“If you’re not close to people that you are dependent on in your ecosystem, you’re probably going to fail because going forward, those relationships are absolutely critical.

“Brokers have an opportunity now to say ‘I’m going to go out and work with these people’ and change their costs model, make themselves more efficient, but actually providing a greater customer experience.”

Cliff explained that the partnerships between brokers and insurtechs have the potential to be extremely beneficial because insurtechs own interesting technology and have innovative solution-focused thinking, however brokers understand the end customer best and can present the problems that need a technological hand to solve.

For him, brokers are all about people, while insurtechs are all about technology.

Fellow panellist Andy Fairchild, owner at Julyfourth Services and Applied Systems Europe alumnus, added that software houses are “critical” within this ecosystem too because they can help to pull brokers, insurtechs and data together. He believes a lot of the technology that can assist brokers is available today, but that firms need to learn how to make better use of it.

In addition, software houses have to be “more open” if this type of relationship is to be a success, he noted.

Cliff continued: “Technology will permeate all parts of brokers’ existence”.

Disrupting the financial services sector

Part and parcel with technology is data – something which Lynn Norledge, head of sales at Willis Towers Watson Networks, feels can help GI brokers break into and disrupt other adjacent, regulated financial services markets.

She explained: “One of the most notable trends that we’ve seen is businesses [that] are building their services around their client relationships rather than traditional insurance broking, we’ve built our client relationships around the services we offer.

“We’re seeing adjacent financial services companies coming into the broking market – people like investment brokers, capital finance, energy brokers – looking at their client base and thinking what more can we offer to these great client relationships that we have. And general insurance broking is one of those services they can offer.

“Those companies are growing very, very quickly because they’ve got existing, fantastic relationships that they can add growth into by offering an adjacent service. I think you’ll see a great deal more of that coming along in future and it’s certainly where we’ve seen brokers racing with growth.

“It does make me wonder when will the insurance broker start thinking what other non-insurance services can we offer to these great client relationships that we all have. That will be one to watch I think.”

Norledge added that brokers are used to operating within a heavily regulated, financial services landscape, so moving into other parts of this broader market could present future opportunities where the boundaries between regulated industries are “blurred”.

“Data without relationships is simply dead information, but data with relationships is very powerful,” she said. “Insurance brokers could be, quite happily, disrupting adjacent industries with the kind of information we hold.”

Furthermore, brokers can use data to build solutions for clients that encompass risks insurers do not want to deal in, Norledge continued. She cited flooding parametric policies as an example.

Opportunities ahead

Certainly, the future appears to be ripe for UKGI brokers – although Cliff feels “some element of reinvention” is still needed.

He told online attendees: “I’m not sure there’s ever been a more interesting time for brokers, nor more opportunity. But it does mean some element of reinvention.

“Clearly scale is important, organic growth is critical – M&A has been a factor but equally you must turn that into organic growth – and I think productivity is really interesting. A lot of the larger brokers have been industrialising M&A processes, they’ve been looking at how they make technology work for them, what their ecosystem looks like.

“I think there’s work to be done in some of the other sectors, particularly around how to be more efficient.”

Although Norledge joked that brokers know the “inside leg” of their clients, it is this depth of detail that when paired with insurtechs’ technology advancements could create some real magic in the broking sector.

Brokers are renowned for forging strong relationships with their customers, but it may be time to turn more of this charm internally towards new market participants, to build a fit for purpose ecosystem for the post-pandemic era.