Automated advice not the end for brokers

As more consumers say they would accept fully automated advice, brokers can still thrive

Automated advice not the end for brokers

Insurance News

By Jordan Lynn

A recent survey has found that 64% of Australian consumers would use entirely computer generated advice when purchasing insurance products.

Accenture found that clients are becoming more than comfortable with the idea of using wholly computer generated systems for their advice on insurance purchases – a development that leaves brokers in a potential quandary.

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Ravi Malhotra, managing director of Accenture’s insurance practice in Asia Pacific, however, said that while the move towards automated advice could be seen as a challenge for brokers, it opens up a host of opportunities.

“If I think about a broker who is currently constrained by their numbers and constrained by their work hours, I look at it as having an ability to satisfy customer needs and handle simple questions,” Malhotra told Insurance Business. “I look at it as being able to provide a responsiveness that allows a customer to interact with you on their terms and then you can still access a traditional broker as long as those two things are connected.”

Malhotra stressed that the marriage between automated and broker-based advice needs to be seamless as the idea of clients starting over in their interactions as they switch between the two could make things worse.

While automation could yet be used in a way that directly attacks and attempts to replace the broker market, Malhotra said that the markets that could be lost are already on the move.

Less complex areas of business, a favourite of direct insurers, have already moved from brokers to other channels as questions can be set and automated as part of the underwriting process.

For more complex and specialist lines of business, while automation could be used as a point-of-contact or for simpler questions, it is still a way off being used for underwriting.

Malhotra noted that the reasons why consumers are more comfortable using computer-generated advice offers the industry more insight.

Consumers, both in Australia and around the globe, see computer-generated advice as faster and more convenient than human advice, cheaper than accessing advice through a broker or intermediary and more “impartial or analytical than humans”, Malhotra said.

Australian consumers also believe the automated process can draw on more sources of information.

Malhotra added that, if brokers do choose to automate areas of their advice model, they could highlight their impartiality as a way to draw clients. For those using an online chatbot or other forms of automated advice, the channel must be seen as representative of your business and brand and must be expected to meet the same levels of standards human advice must rise to.

In addition he stated that as younger generations come to the fore, who are more accepting of automated advice, the usage and development of computer generated systems will continue.

As they rise, Malhotra said that the industry should look at it as an opportunity to enhance their human-based work and use technology as a way to improve their business.

“You are not just going to automate the exact same process we do today,” Malhotra said.

“We have an opportunity to do things in a much more personalised way, advise beyond the product sale and recognise that in doing so we may also be competing with companies that may not have been on our radar before.”

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