Jonathan Forster, SME distribution director for Travelers Europe, discusses why it is key to find – and be – the right broker partner
In a changing insurance market, it’s more important than ever for insurers and their broker partners to be able to work collaboratively to meet clients’ needs – and for those clients to know they are getting the best solution they can. Schemes partnerships can be key to this success.
Schemes are useful for brokers and insurers alike because they build a foundation for sustainable, profitable growth. They help an insurer to access new markets and channels of distribution, as well as utilise brokers’ expertise about specific business segments or markets.
Brokers can use schemes partnerships to develop a superior value proposition for both existing and new clients.
At a time when options for cover can be more expensive or restrictive, a scheme can enable brokers to offer a differentiated proposition tailored to clients’ needs. Partnering with an insurer on a scheme also allows brokers to demonstrate deeper expertise about a sector.
Schemes can give brokers a competitive edge - providing control, reducing transactional costs for insurers and offering service differentiation.
In a collaborative relationship, brokers can access their insurer partner’s expanded resources, including enhanced marketing and training support. Brokers’ book of business also becomes less volatile than it would be if it were underwritten individually, which sets the stage for improved retention.
A schemes partnership takes a long-term portfolio approach to developing both the scheme and the broker’s vision, considering aspects ranging from product to pricing. These benefits create the conditions for profitable growth.
The future of schemes
Schemes are evolving right now.
The Covid-19 pandemic has heightened our reliance on technology – and schemes are reflecting that in a number of ways. They are utilising third party data more heavily to drive underwriting and sales. Brokers are using technology to help widen their client base.
We expect to see increased etrading in the future and schemes are a natural growth area for this because they allow brokers to focus more on clients and less on negotiating each cover point. This helps brokers and insurers minimise administrative tasks and more easily respond to simple underwriting queries, saving time per policy.
On the product side, schemes are well suited to protecting the emerging technologies that have taken off during the pandemic. They have a history of offering bespoke options for emerging inventions. Non-fossil fuel vehicles, drones, microtech and artificial intelligence are all technologies that may be unable to secure traditional cover and can benefit from the expertise that schemes offer.
Schemes allow for modular product design too, offering greater flexibility across client segments and providing the packaging of products in one easy to service proposition – a trend we’re seeing across the market overall.
Of course, schemes are only as strong as the partners comprising them.
To find the right match, it’s critical to do some research upfront. Partners must trust each other, understand everyone’s role and have a shared long-term vision and goals to ensure the success of the business. When that happens, the client, broker and insurer all win.