​Brokers set for starring role in future of personal lines

Biba 2022: Brokers are set to play a key role in the future delivery of personal lines insurance because they can ”adapt to have a range of offers” and demonstrate ”an understanding of the customer”.

During a session at trade body Biba’s 2022 conference in Manchester on 12 May 2022, titled ‘The future delivery of insurance’, attendees were polled, with 87% agreeing that brokers will be fundamental in the future of personal lines insurance distribution, and only 13% disagreeing. 

Ant Middle, Ageas UK’s chief executive, agreed that “there is a future for the broker in personal lines”, in part because they can provide advice around more unusual or unexpected risks.

However, personal lines is increasingly moving to a wholly digital purchasing journey, often via aggregator sites using automation. Middle noted that how ”brokers continue to operate and compete in that environment is certainly very much on our minds”.

He continued: “That is where we as insurers with brokers need to adapt. I think about that environment particularly in terms of our collective competition.”

Middle additionally feels that insurer and broker partnerships can work with and learn from direct to consumer models, which are often very efficient.

“That means we have to think and operate quite differently,” Middle said.

“We have to be much more open-minded in how we break down silos together and all the assets we have, to think about how one and one really does add up to more than two.

”When we do that and crack it, [I] do think there is space for insurers and brokers to be working together in the future in personal lines and we are beginning to see some of those models work.”

Collaboration

Meanwhile, Vivek Banga, managing director at Polaris, told brokers that ”there is never a better time to collaborate than now” with insurers and MGAs because ”some of the barriers when it comes to setting up good technology are so high”. 

In part, this trend could be one of the driving factors behind why big technology players, such as Amazon and Microsoft, are dipping their toes into insurance waters.

Middle added: “If you look at the young insurtech community, many of those young startup brokers themselves support those ideas and [are] really open to that progression. That is another point of inspiration when I think about the future.” 

Jaime Swindle, executive director at Geo Underwriting, noted that while the insurance industry as a whole is good at collaborating to solve problems, collaboration doesn’t always happen with businesses outside the sector - meaning there are still lessons to be learned.

She said: “If we come together as an industry, we should come together as people working with consumers on social and economic factors that are going to impact everyone during their day-to-day lives – how do we start thinking about that?”

Not all about technology

Peter Clarke, managing director at Insurercore, admitted that not all customers want to use technology, so “it is about having the range”.

“This is where the broker plays so well as one thing just won’t fit everybody and so we have to be able to adapt to have a range of offers and an understanding of the customer,” Clarke added.

Clarke won Insurance Times’ Technology Champion of the Year in 2021 at the title’s Technology and Innovation awards.

Despite the rising role of technology, Clarke continued: “I don’t see the role of the broker changing too much - I do think it is all about talking to people.

”For consumers to actually understand what they need from insurers is getting harder and that’s where brokers can come in.” 

Karen Weir, managing director at Weir Insurance Brokers, noted that there is a “people element” to insurance.

For Swindle, brokers play a vital role when customers’ appetite to risk or circumstances change - especially as she feels technology to manage this is currently lacking.

“That’s the challenge we have got and that’s why brokers will always play a key part,” she said.

“The bit that hasn’t quite caught up yet is the technology. Now we are looking at what the future of the insurance industry looks like and what technology is already in place.”

Swindle noted, however, that technology is driving distribution efficiency - from a carrier perspective, this means it is far more effective and “easier to trade, but a bit more homogenised”.