Why insurers are investing in digital broker experiences
Earlier this year, we asked our customers and prospective customers why they were making investments in their New Business Platform. We covered one of the reasons, improved response times, in the first part of this blog series.
One of the top three reasons we keep hearing was the need to support broker partners with the right tools that empower them to better serve policy holders. In this second blog, we explore why this is important and what the right tools are.
Why is broker technology a top priority for insurers?
The answer lies in the complexity of insurance products. Many policies, especially commercial and specialty products, are complex financial instruments. Consumers want to understand what they are purchasing and make sure they have the right coverages. This is especially important where the costs represent a significant investment for the policy holder. Consumers want advice from a trusted source and brokers are the face to many consumers.
From an insurer’s perspective, they want to validate their customers, ensure accuracy and adequate coverage. Brokers typically perform this initial assessment, and can screen poor risks from the selection process.
In a recent Willis Towers Watson survey, 94% of insurers said that distribution would be the area where technology would make the biggest difference over the next 5 years. Investment in brokers clearly helps to future-proof their business.
Brokers represent the insurer. Providing them with a technology platform ensures they can:
Educate and inform customers;
Explain all options available;
Ensure all policy holder risks are addressed; and
Match the insurer risk profile with the customer.
This ultimately builds a positive brand image for the insurer.
To stay competitive, brokers need the right technology with access to a broad array of products online and quick, easy to use functionalities. When asked on panel if brokers, with the right tools, could re-obtain consumers who had chosen other distribution channels, Karim Hirji, Senior VP, International & Ventures, Intact Insurance said:
“There is a huge mushy middle group of consumers (outside those committed to broker distribution or those who prefer self-servicing) that don’t care how they buy their insurance. They just want to be able to connect quickly, find a fair price and a good product.”
Combine these benefits, and the important role played by brokers for so many insurers, it is no wonder investment to support broker partners is a top priority.
What are the key technology investments?
With such a range of available insurance software, it’s difficult to pinpoint what the “right” investment is for the insurer. We share our analysis from customer feedback and our ~20 years of experience delivering technology solutions.
Brokers today need to be mobile to serve customers wherever they are, including small and large business owners, farmers or personal lines risks. Providing brokers with access to online tools, that can be presented on mobile devices at the point of sale is critically important. They need quick and accurate policy, price, rating, and product information to establish their reputation as trustworthy partners.
Data Collection, Analysis and Distribution
Michael Lyman of Accenture recently wrote about 8 emerging technology trends impacting brokers. One of the top trends is the establishment of Intelligent Enterprises: Greater data flows from a rising number of sources, coupled with increasingly powerful analytics systems, are enhancing the speed and quality of decision-making within organizations.
Insurers that fit this designation should invest in technology that makes this information available to brokers in their customer servicing and new business roles. Such investment will serve both carriers and brokers, but only if carriers share the information.
The result: Improved productivity and lower costs.
Connect Broker, Underwriter and Consumer
A 2014 study by Morgan Stanley and Boston Consulting Group found consumers interacted less with their insurance provider than any other industry. This lack of interaction limits insight into consumer behaviour, consumer needs, and inhibits the creation of customized solutions. The insertion of a broker channel can exacerbate this problem, but with technology, it can instead act to improve interaction.
Technology platforms connecting the insurer and broker to serve the needs of policy holders can enhance customer loyalty.
Insurers have many segments of customers, some of which are better suited to be led by knowledge worker interaction. Karim Hirji commented that millennial customer expectations provide a space for brokers to thrive: “Advice, customized products, customized relationships and experience – these are all things brokers do well.” And things millennials want.
Platforms connecting business partners, services and customers across multiple digital ecosystems, are integral to protect existing businesses and enable the launch of new value-added services to customers. Research from Accenture has shown 83% of insurance executives expect platform businesses to be part of their growth strategy over the next three years.
Consumer satisfaction can be eroded if brokers, underwriters, claims adjusters and others do not access the same information. The goal should be to provide brokers with the same level of detail about customer practices as underwriters – at the same time.
All brokers’ duties – sales, marketing, working with underwriters, processing client requests, and reviewing products – boil down to relationship management: that means collaboration and communication.
Tools that help brokers communicate and collaborate are thus invaluable.
In an era where hacking incidents are increasingly sophisticated, insurers’ access to brokers and consumers needs to be secure. Insurers highlight this as a priority but more needs to be done. The recent data breach at Equifax showcases just how serious we need to take cybersecurity.
Security adds time and costs to every project, but just like insurance, it is critical when major troubles arise.
Hubio’s New Business Platform adapts to an insurers internal security, to follow protocols already established: it’s ready, tested and checked.
Portals and Upload Tools
Brokers are not a homogeneous group. Many wish to start and end transactions in their broker or agency management system and upload them to the insurer. Others wish to go online and submit new information via an insurer portal, updating their systems by a download if a policy is bound.
As a result, insurers need to accommodate multiple points of entry. This is a cost beyond that faced by direct writers, and should be undertaken when the benefits of broker participation exceed these costs.
As consumers wish to do more and more research and purchasing online, the portal is essential for both the broker and the consumer. Broker portals can be developed for an audience that understands the diction and phrasing of insurance whereas consumer-facing portals need to conduct much of the analysis behind the scenes, and use “user-friendly” language.
Portals such as sonnet.ca demonstrate such user-friendly interfaces.
Uploading information from core broker systems can be another value-added technology investment. Enhancements to add product lines, improve error detection, or to present a UI to allow edits for missing or incorrect information are also value-add for many insurers. Each enhancement improves the process. In particular, speeding-up decision making so that customers can receive answers much quicker.
Hubio is working with several insurers on their upload technology. These insurers are seeking faster performance, more comprehensive application of underwriting rules, and increasing the rates of straight-through processing.
Insurers must decide where to allocate their technology investments. For many, investing in broker technologies offers the highest return on investment. If that is the case for your company, the question is then, what technology, and when?
If you’re interested in addressing your need for broker technologies, please contact David Barber, Vice President, Hubio Technology.