Towards the end of this year, Jarrod Hill (pictured above) said IAG expects to launch a new product in the SME property space that will start significant changes in the way it engages with brokers.
“Broadly, it’s going to be SME,” said Hill, CEO of CGU and WFI, who leads the giant insurer’s intermediated insurance business in Australia. “It’s going to be in our package space where we’ve got a very unique product called Padlock [CGU Padlock] that covers small to medium size property owners’ business - that’s a priority for us.”
Hill said the offering will help brokers handle property and liability coverages for property owning customers more efficiently.
Other, broader changes impacting brokers, he said, will “enhance our pricing and product and how we build product dramatically.”
“Also, the way we engage with brokers will shift and change,” said Hill, “[and] the way that we can align our product offering more with the customer needs than we do now.”
Most of that is two years away, he said, but the end of 2024 will see it all kick off.
In recent years, Australia’s big insurers have reduced their capacities, particularly for harder to place risks, making it more difficult for brokers to find coverage. Underwriting agencies have jumped into this gap and are providing brokers with alternatives.
Some industry sources say about $8 billion to $10 billion worth of premium a year is now written through underwriting agencies. But how long will this situation last?
Insurance Business asked Hill about this challenge from agencies and if he sees IAG’s ongoing technology transformation as a way of reclaiming this space?
“I think they’ve [agencies] been able to deliver some modern technology and they’ve been a little more efficient than we have,” he said. “So they’ve been able to offer a service capability that we haven’t and therefore that face to face engagement has won them some of that business that maybe sat on the periphery.”
Hill said he expects his firm’s technology improvements over the next couple of years to enable the building of more focused products and the capability “to offer a lot more to our broking partners than we can now.”
The CEO said he also expects these changes to bring underwriting expenses down.
He said IAG’s intermediated business will be “much more dynamic” and customer focused.
“That’s pretty exciting, how he [Rafton] set up the broker portal,” said Hill. “There’s work we’re doing on smaller property claims [of] under $20,000 where we’ll get the average settlement time down on simpler claims to under six days.”
He said internal processes will no longer complicate doing business.
“That’s where I think we’ll be able to compete with some of the more dynamic underwriting businesses around at the moment,” said Hill.
When the first product release happens towards the end of this year, he said, “we’ll ramp up.”
“That’s when you’ll see the real transformational change that will start coming through, around that 24 month period,” said Hill.
IB asked if, when these changes are implemented, will brokers still be dealing with people at CGU or will most broker business be through a digital interface?
“People are critical to the service proposition,” he said. “At the moment we have far too many people doing back office tasks which takes them away from engaging with our brokers.”
For example, Hill said it can take three hours to put a single location ISR policy into IAG’s system and provide a broker with a quote.
“We’re so backed up with quotes, we’re just firing quotes out without having that personal engagement,” he said. “Once we’ve finished this process [of technology upgrades], we can auto ingest the information and whichever broker’s slip comes in, we’ll be able to supplement that with third party information,” he said.
Hill expected this to save at least two and a half hours of time and free up his firm’s underwriters.
“Then they [underwriters] can do the detailed underwriting, pick up the phone, engage with the broker, talk the risk through, make sure they fully understand it and also that we’re delivering what the broker wants - then provide the quote.”
Hill said these technology changes “will be a big culture shift for our organization.”
“As you can imagine, the team’s pretty excited about it!” he said.
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