Are brokers doing enough to innovate?

Ashwin Mistry, executive chairman, Brokerbility

“This is the question I often put to insurers. I ask them: do you feel that brokers are innovating quickly enough and are they embracing technology and at the rate they should do? And typically you get a muted response. We need to recognise that nobody owes us a living and we’ve got to start to innovate much faster. 

“All the so-called disruptors that are coming to our space have realised how lethargic we are and it’s no wonder we are exposed to disruption. But I would change the word disruption to modernisation, because all these firms are doing is bringing current practices from elsewhere into our sector. So the word disruptive sounds aggressive and threatening, whereas modernisation sounds forward-looking and innovative. 

“A broker is no different to any other business and so we can look at how our customers are innovating and mirror what they are doing. When, for instance, was the last time you bought an airline ticket from a high street travel agent? It’s probably at least 12-15 years ago. And how did the travel industry cope? These days you can do it all yourself on your laptop at a moment that suits you, which might be at 10 o’clock on a Sunday night.

Business is no longer nine to five, Monday to Friday. If the client wants to talk about insurance at 10pm you’ve got to start thinking about the ways he or she can interact with you then.”

Tom Bartleet, chief executive, Erskine Murray Insurance Brokers

“For me, broker innovation is about keeping the customer at the centre of everything you do. And what does the customer want now? They want speed of response. They want value for money. They want quality advice and they want to talk to somebody who knows more about the subject than they do. 

“Our SME customers, for example, are facing more complex risks than ever before and the broker needs to be up to date so they can advise on new and emerging risks, such as cyber and trustees liability. 

“And it’s not just about insurance solutions but offering other ways of helping the client manage risk,

whether it’s advising on flood defences or ensuring that they’ve got the cyber essentials to protect their businesses. 

“And you can’t talk about innovation without talking about technology.

And technology is all about supporting human interaction and trying to reduce the frictional costs that the customer doesn’t want to pay and that humans are not particularly good at. 

“So we absolutely believe that technology has a huge supporting role when it comes to broker innovation, in delivering quality, value and speed to customers.”

Charles Foster, chief executive, Lycetts

“If you’re a major broker you have a critical mass that enables you to steamroller your way through life and there are classes of business that will come to those brokers which never come to us. So if we’re to carve out a niche for ourselves then we’ve got to find something which makes us unique. It might be service, it might be cover, it might be local availability – and it’s a combination of all those things.

“We’re in a niche sector, but we still need to innovate. We know the world our clients inhabit and we’re always trying to find something that is of interest to them. As a broker, if price is your only differentiator it becomes a bit of a march to the bottom. And we deliberately don’t compete in that space.

“If you take farms and agriculture we have products that are unique to us and those are the ones where we try and develop our own intellectual input in the knowledge that it makes our policy wording different from another broker’s.

“And too often we’ve given underwriters a really good idea and have found they’ve rolled it out to everybody, so we try and avoid feeding back too much of our intellectual input. 

“Distribution is increasingly an issue. Quite a lot of modern landowners are working in the City of London and that means we now need to be able to sell farm policies to people who might be working in Canary Wharf.”

Graeme Trudgill, executive director, Biba

“Not that long ago people were saying disruptors were going to come in and disrupt the insurance broker model. That everyone was going to be out of a job and it was all very negative. But we’ve been able to bring these insurtech firms, these innovation experts, in to partner up with Biba brokers. 

“This year, we will launch what we call a ‘digital dating agency’ where brokers can partner with firms that do chatbots and artificial intelligence (AI), etc, and it’s a win-win for everybody. 

“It’s not easy for insurtech to come into a heavily regulated world, but they can by partnering with a Biba broker. And those early broking adopters have found it beneficial to work with the insurtech firms. 

“Training is also important. Lots of smaller brokers don’t necessarily have someone dedicated to things like search engine optimization, Google analytics, website design and coding. So we’ve arranged a series of workshops with Google and other tech firms and it’s been received well by members. It’s about helping members to digitally up-skill.

“Innovation is at the core of what brokers do. A few years ago, we got a call from 10 Downing Street saying that the sharing economy was finding it difficult to access insurance because they wanted short-period policies. They wanted insurance for products where there was no insurable interest and they didn’t own the assets, just borrowed them. And some brokers instantly threw themselves at it and created new products. So brokers have always been innovators. 

“[The industry] will continue to evolve with things like AI, which is an area where you potentially can make savings or can do interesting things such as deal with lots of customers at the same time. If there’s a surge in claims, you might not have enough staff to cope. But if you can have an AI system, it can deal with all of those queries simultaneously.”