Brokers are facing a number of challenges, with everything from regulation and technology disruption through to the unavoidable issue of “demographics” putting the sector’s future at risk.
Given all the challenges, brokers need to build on their existing skills. The hallmarks of successful brokers are about being entrepreneurial, specialist and progressive and putting themselves and their client service above the competition. That’s what is needed – and applied with ruthless and consistent frequency- to ensure a strong position for broking into the future.
Further, staying relevant is vital for future success. Brokers are the first line in risk selection and underwriting but predictive models, data enrichment and API links between large databases all have the potential to diminish this role. To counter this, going beyond what the computer says is essential. Providing unique insights to clients and to insurers will be an important differentiator that underlines the additional value they bring. For instance, by collecting information about defined target and niche markets rather than a more generic view, will ensure product, pricing and service can be more accurately provided – the clients long term benefit.
Another key skill, especially when it comes to delivering customer service, is understanding the buyer. Take millennials as an example. Their expectations are markedly different to those of older generations and, when it comes to insurance, they want a product that responds to their needs, is easy to buy BUT gives them access to an expert they can speak to if required. Given that this group will make up the majority of broker clients in the next decade, ignoring them isn't an option. Courting them may mean multi-channel digital distribution, stronger links to social media and providing the extra level of information and insight. It also means employing more (ageing) millennials in the broking business to help understand exactly what's required, as well as adding to the overall business acumen. That also means putting profit back into the business, investing in the recruitment and development of the people that will create brokers that will continue to thrive.
Having the mark of a professional broker, with qualifications to demonstrate it, is another important element for future success. Our research with brokered clients shows that, increasingly, they distinguish between those with professional qualifications and those without. Supporting this, broker networks and associations will have an important role to play in the future market. By being a network member, brokers can leverage collective strength, accessing a range of professional services and support but also benefitting from the knowledge and best practice insight of a community. It's the sharing economy in action.
Adapting to the needs of tomorrow's clients and responding to the challenges that arise will require new skills but, by building on their entrepreneurial nature and attention to customer service, brokers are in a good position to succeed.
Nick Hobbs, director of broker markets, Allianz
This blog first appeared in Insurance Age on 12 June 2017