The insurance value-chain is a prime topic of debate in the industry worldwide. What does the emergence of insurtech start-ups mean for distributors like brokers and agents? Will reinsurers start bypassing carriers and sell direct? The uncertainty is endless…
Insurance brokers are the unfortunate subject of a lot of this doom-and-gloom industry chatter. There seems to be widespread consensus that insurers will increasingly opt to tackle distribution by going direct to the customer and eliminating the broker from the value-chain.
But what if brokers turned that discussion around and challenged the value of the carriers?
Tim Attia, CEO & co-founder of insurtech startup Slice, spoke to Insurance Business about the value of the distribution channel and the power of the broker.
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“Selling insurance is expensive. Eliminating brokers could open up millions of dollars to spend on advertising but then you lose the value-added services of the broker,” said Attia. “It’s a broker’s job to go out and win the customer, which is not always easy.
“When it’s time to place business with the carrier, the carrier’s systems are often ancient and outdated and the broker gets squeezed. The carrier pushes a lot of the expense on to the broker to go and process the business. Imagine if we gave the broker a digital insurer where they could press a button and the insurance is issued?”
Slice is one such digital insurance startup. It operates through the Cloud, servicing the on-demand economy of homeshare and rideshare business. It has the potential to threaten the value of brokers, but Attia assures this is not the plan.
“I often get asked if our business model will eliminate agents. My answer is always … if we were to eliminate all the agents, we would open up our own agency the very next day,” Attia told Insurance Business. “But it would be a digital agency to compliment us as a digital carrier. The experience for the agent and customer would be tech-forward.”
The customer is the most important part of the process and owning that customer is the key goal of all insurance professionals, according to Attia.
“The insurance industry spends a lot of time automating the policy document and then automating the processes around it (submission, quote & bind, renewals & cancellation, etc.). The one part of the value chain they care less about is the agent – the customer facing distributor,” Attia commented.
“Customer engagement is way more important than these transactions. So, if I were an agent or broker, it’s maybe controversial, but I would find a way to eliminate the insurance company from the process. If you already own the customer, why not go after the insurance carrier – especially if you can buy a digital insurance platform that’s in the Cloud and has the same capabilities of a carrier?”
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