Three industry experts discuss the progress of digital transformation in the commercial lines broking space

WE ASKED: ‘Have commercial lines brokers been slow to pursue digital transformation and, if so, what progress has been made in 2022?’

Richard Hartley, chief executive, Cytora

“Digital transformation has been a hot topic over the last 10 months, with certain brokers making significant innovation gains.

Richard Hartley Cytora IN FOCUS

Richard Hartley

“There tends to be a split between early adopters – such as PR backed challenger/consolidator brokers, who are adopting technology as a competitive advantage – and the rest, who tend to operate in a traditional way.

“Brokers like Partners& are pioneering a new advice-based model, underpinned by data-driven technology.

“Others are creating digital exchanges to streamline the flow of risks directly between clients and insurers. These brokers are focusing on digitising their workflows to uplift efficiency, drive growth and improve margins.

“Interestingly, though brokers are innovating on the product level – for example, around types of products addressing areas of risks that clients are underinsured for – the way the risks flow between brokers and insurers has not changed and remains heavily analogue.

“Often email is the most efficient way for brokers to place risk with multiple insurers. The emerging investment in API (application programming interface) connectivity is still in its infancy and suffers similar fragmentation to analogue risk submissions.

“In order to have the biggest impact on the industry, digital transformation needs to be pioneered by both insurers and brokers. It’s a change that we are seeing right now – both insurers and brokers are becoming more digitally savvy and pushing innovative change together.”

Matt Norris, territory manager, Beazley Digital

“Digital transformation is not easy and is not quick. Getting up to speed with suitable digitalisation for today – whilst planning for a fast-moving tomorrow – is a major undertaking and quick decisions that are not strategic enough can sometimes create more problems than they solve.

Matt Norris Beazley IN FOCUS

Matt Norris

“For some companies, it can seem as though digital transformation is not happening quickly enough. This is often felt most keenly by start-ups, with systems unable to use new technology and no migration from old systems to new.

“Brokers have taken more time to consider their digital strategy in 2022 than any previous year, something which may have been triggered by remote working during the Covid-19 pandemic, at least in part.

“High profile growth of digital broker start-ups and insurtechs is also a likely explanation for this uptick. After all, seeing digital activity transforming effectiveness in practice for your competitors tends to focus the mind.

“Ultimately, any digital transformation must ensure that the hearts and minds of people are managed too.

“This human element is critical and adds to the complexity and time it takes. It is now time for the wider insurance market to join the party. Insurers, brokers, TPAs and other members of the ecosystem have their part to play too.”

Chris Haggart, commercial director, GRP

“The sector has been slow off the mark, but changing customer expectations have forced the pace.

GRP Chris Haggart IN FOCUS

Chris Haggart

“Businesses today are run by digital natives who have grown up in the ‘always there, always on,’ digital world. Their firms are digitally enabled and they expect their broker to be offering them the same omni-channel customer focused service that they give their own customers.

“The pace has accelerated as a result of the pandemic. Clients were forced into the digital, virtual world by the lockdown and they got used to it.

“As a result, brokers have, either by themselves or in conjunction with supplier partners, invested in systems integration to deliver clients’ needs faster and more efficiently. Moreover, efficiency benefits their profit and loss by reducing costs and enabling employees to do more worthwhile work.

“The pandemic was the tipping point for commercial broking, although at GRP we had already begun our digital journey well before with the construction of our data warehouse. We also acquired two digital brokers – Insync, in 2020, and Hamilton Fraser in 2022.

“Whereas personal lines has now largely become a digital industry, commercial broking still has a way to travel. Digital transformation is expensive and time consuming and there is still an emotional attachment to the personal touch, as opposed to the impersonal digital world.

“Yes, there has been digital progress in commercial lines during 2022, but it is incremental and I suspect that it will continue in an evolutionary, as opposed to revolutionary, manner for a few years yet.