Craig Olivier, CTO at Genasys Technologies, takes a look at how brokers can adapt and develop their offer after Covid-19.
There is no doubt that brokers provide a valuable service to their customers, in providing advice, helping them understand the risks they face and what they can do to mitigate these risks. However, the pandemic has challenged how they interact with their customers forcing a shift towards greater digital engagement.
With change comes opportunity
As difficult it is for any of us to manage change, with change comes opportunity and I believe this shift affords brokers the chance to review the options out there, to enhance the way in which they provide their services, and how both existing and future customers may want to interact – for example, a greater ability to self-serve.
Technology is there to support brokers, but what technology offers the most value, and what are the bear traps to avoid?
Even for the tech savvy broker, there is a dizzying array of software platforms, apps and systems, as well as all the buzzwords and media hype, which can make it hard to identify what is right for their business and what can add value. My view is that any decision should be based on ensuring that you adopt the right technology to solve the business problem – not using technology for the sake of it or because some insurtech ‘guru’ says it is the latest thing.
The bear traps to avoid
Many companies have fallen foul by spending large budgets on implementing what they view is a priority to solve a perceived problem, but sadly fail as the project does not actually address the current business requirements. Creating apps for customers to engage with is a good example – the take-up and interaction is often minimal due to low perceived value by the customer.
Another aspect that brokers need consider is that many of these new technologies require the ability to integrate platforms together, to share data and interact in real-time. The problem is that many of the current legacy platforms are not built on new technology stacks, making integration incredibly difficult, limiting what can realistically be achieved and hindering the possibilities.
Big areas of focus
Those platforms with ecosystems enabling connectivity across the insurance value chain are the ones that brokers should be considering. And, in that value chain, there are three big areas of focus for brokers:
1. accurate and up-to-date data as this provides brokers with the ability to better understand their customers’ risk profile, and better align cover and pricing;
2. social platform interaction allowing customers to engage whenever, and however they require, to gain advice and assistance;
3. digital facilitation of the advice and recommendations they deliver to their customers.
The real strength of ecosystems is that they enable both the integration of core platforms, with innovative product offerings, as well as integrations to value added services – and so enable brokers to find innovative new ways to interact, distribute and relate.
However, I do not see this as a race to the top for the tech providers out there. Those looking to win the race are going to come last, as creating an ecosystem of best of breed technologies, and businesses working together to create a better customer proposition, is where the insurance industry is going to generate value.
When considering specific tech that can aid client acquisition and retention, I’d suggest looking at those solutions that can provide services to customers that mitigate risk, rather than simply insuring them. Smart home devices, for example, provide early warning notifications for risks such as fire and escape of water to prevent the need for a claim to occur.
When it boils down to it, customers only really buy insurance to receive a payout – and this is why parametric insurance is gaining traction. It often leverages smart devices or system integration to notify a claim and pay automatically if the claim meets preset criteria. These propositions could go a long way to restoring trust in our industry again, given the battering it has taken during the pandemic.
A business transformation project
Of course, the decision to make change to all or any part of an existing tech platform is significant, but it is important to view it as a business transformation project, rather than purely an undertaking for the IT team.
Brokers should consider where they want to be and look at all aspects of their business to define a journey that is achievable and measurable. Changing things at a manageable pace is much easier to control, and more likely to succeed. Consider potentially moving a line of business or launching a new product on a new system that runs alongside the existing platform. This could be more beneficial in the short-term as it enables a business to try something and if it does not work, pivot and try again without impacting the core operation.
If they have not done so already, brokers need to review their technology platform to ensure they will be able to adapt to the new norm that is emerging out of the pandemic. It requires time, effort and spend – but it is an investment that every broker should be undertaking if they are going to be able to fulfill their client obligations and interactions going forward.
Craig Olivier Chief Technology Officer, Genasys Technologies