Ben Potts from Novidea takes a look at the rise of automated data and its impact on the insurance sector. Can tech out-think the traditional expertise offered by a Lloyd’s broker?
The top four investment robo-advisers managed $128bn in assets as of November 2017, up from just $88bn in 2015. The world is going through a critical transition toward data-driven insight, and the insurance market is no exception. Historically, Lloyd’s brokers have relied on personal reputation when doing business, but in today’s market where customer expectation are high, reputation and relationships are not enough – they need to offer clients a great experience, and technology is vital in this.
Reputation remains vitally important to the broker whose strong suit is adding value and maintaining personal relationships with clients. The technology is not there to replace the broker, but to help them in achieving this goal.
With technology advancing so rapidly, falling behind by the slightest margin can create a significant gap, especially in a sector so often characterised by its reliance on legacy systems. Traditional brokers might fear that technology will eventually render their role redundant, while in fact the opposite is true – digital systems that store and analyse data allow brokers to bypass everyday administrative tasks and focus on the more important things.
Clients are accustomed to the digital age and have come to expect instant responses at the touch of a button, and they expect the same when it comes to adjusting their policies. By contrast, today brokers are still scrambling around for paper copies of contracts to answer policy questions, or plugging information into a database in order to submit a request and respond days later.
Quick responses to client questions improves both customer experience and broker productivity as brokers are able to determine quotes and assess clients’ needs there and then. Essentially, brokers have no choice but to adapt if they want to survive – old school methods are no longer a viable option for the long term.
It’s not just clients that reap the rewards of technology. One of the fundamental reasons for new technology is its ability to keep data safe, store it efficiently and assist with compliance. For example, if the Financial Conduct Authority (FCA) were investigating your firm, by having the right technology in place you could perform a full and transparent audit trail at the click of a button as opposed to sifting through hundreds of documents in order to demonstrate activity. What’s more, the regulator is likely to expect this evidence at a moment’s notice.
Clients unsurprisingly seek out brokers they know they can trust, which is where the reputation of the Lloyd’s institution comes into play. However, adding value without digitisation is increasingly challenging, no matter how established a client-broker relationship may be.
Indeed, the client-broker relationship is strengthened when brokers can offer tailored advice that goes above and beyond the customer’s requirements. A 360-degree view of client information allows for easy identification of cross and upsell opportunities, enabling the broker to suggest suitable policies and improve profitability – a win-win for everyone. Furthermore, one consolidated data platform that can be accessed from any device, in any location, at any time also helps enormously to fulfil customer expectations and increase efficiency when it comes to any part of the insurance process.
When used in this way, data-driven technology can do the heavy-lifting, whilst the broker is freed up to seek out new business and provide existing clients with excellent service. While technology drives insights, the human touch – taking time to understand the customer and their experience – is what generates referrals, higher revenue per customer, lower churn and better customer satisfaction ratings.
The Lloyd’s broker will always hold a unique position in the market, but as insurance digitises in a customer centric era, they need to embrace real-time technology if they want to gain valuable insights and maintain their role as trusted advisor