Insurers “definitely recognise” the value of brokers, despite the rise of direct challenges, an expert has said.
A recent
EY survey found that more than 40% of Australian brokers see direct-to-consumer channels as a significant or major threat to their businesses, but Imran Ahmed,
EY Oceania insurance customer and growth solution leader, said that it is important for insurers to balance their distribution approach.
“Many insurers, there are some that are exclusive, but many have a multi-channel strategy and for them it is really important that they balance those channels,” Ahmed told Insurance Business. “Yes they recognise that some consumers do want to buy direct but there are others that have more complex needs that do need advice and therefore the broker can play a key role.
“I think understanding that first and foremost is really important.”
EY found that rather than competing against each other, brokers and insurers should look to use a multichannel approach to create new opportunities for collaboration.
“Those relationships that feel slightly antagonistic, if you like, as opposed to collaborative, will be more challenging because brokers and insurers need to take a cold hard look at what processes are most important to each party, think about it in a mature way so that… they are joined up seamlessly and that the customer at the end of the day gets the best possible experience,” Ahmed continued.
“The customer will vote with their feet and if brokers and insurers aren’t collaborating to deliver the best experience then that is not going to go well.”
For those that do still see direct as a major threat to their business, Ahmed said that a distinct value proposition will be the most important aspect of differentiation.
“That distinctive proposition could be convenience, aspects of the product, tailored propositions distinct to segments - but it has to be distinctive and has to be focused,” Ahmed noted. “Those that are focused will thrive going forward, whereas those that are less focused clearly won’t do so.”
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