There’s no doubt that insurtech has had a significant impact on the world of insurance and many brokers feel somewhat unsettled by the changes – however, huge disruption is on the horizon and some industry players are wondering if brokers are really ready.
Colin Fagen, co-founder and managing director of Blue Zebra Insurance, says savvy brokers certainly aren’t averse to change – but few are fully equipped to thrive in a digital environment.
“I don’t think brokers have got their head totally around it yet and equally I’m not sure very many insurers have delivered it to actually drive that change,” Fagen told Insurance Business.
“I think brokers are on the fence a little bit, in that they’re dealing with compromised organisations,” he continued. “Some organisations are multi-distribution and multi-brand but brokers, at the same point in time, are trying to protect their client bases and their IP so they really need to think about who can help them scale.”
When it comes to better preparing themselves for an insurtech-driven future, Fagen says brokers need to carefully consider which organisations they’re partnering with.
“Brokers need to think about who is going to provide the support for them in the future, which I think is a totally different group of organisations that have worked with them in the past,” he said.
“Brokers of different sizes can’t afford the research, can’t afford some of the costs of innovation and equally the risks associated with innovation so it’s important that they think about which organisations can genuinely work with them and have mutual growth aspirations.”
Naby Mariyam, CEO and founder of Coverhero, also has doubts about just how prepared the Australian market is for insurtech.
“The Australian market is very interesting compared to the other markets that are a little bit further ahead when it comes to insurtech,” she told Insurance Business. “I don’t think we are prepared but I do think the industry is curious about what could potentially happen and how it could affect their businesses.”
Mariyam suggests there are just a handful of insurtechs – around 10 to 15 – currently working across different parts of the Australian value chain but she also says significant change is certain to come.
“I think what we will see in the short-term future is start-ups being in a position to cut into untapped markets, such as an underserved millennial market,” she said.
“They’ll be able to directly compete with the existing insurance companies and broker networks by connecting with the audience and developing products that don’t currently exist in the market and by totally reinventing the whole model across the value chain.”