The rise of fintech is set to see brokers transforming themselves to match changing customer expectations, an expert has said.
As fintech and insurtech continue their rise in the industry, Bill Sullivan, head of global financial services market intelligence at Capgemini, said that the rise of technology will impact brokers and their relevance to customers.
“The growth of fintech firms and their rising acceptance by customers will definitely have a big impact on the intermediaries associated with the insurance industry,” Sullivan told Insurance Business.
“Now, intermediaries have to transform themselves by leveraging technology and catering to customers’ changing needs and preferences to stay relevant in the business.”
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Brokers don’t only face threats from fintech disruption from outside sources, however. Sullivan noted that traditional insurance firms are instilling innovation in their businesses and will look to use partnerships, investments and acquisitions as a way to reduce or replace the role of the traditional intermediary.
An area of fintech that is set to have the biggest impact on the insurance industry, according to Sullivan, is innovative offerings in terms of customer interface. From comparison sites, to peer-to-peer insurance, a host of companies are looking to connect with customers in new ways.
These changing lines of customer contact are redefining the industry and increasing competition between firms. Customer expectations continue to change as technology makes transacting business quicker. Prime examples include chatbots, artificial intelligence and online or mobile-first applications, which are all becoming more commonplace in the industry.
With Trov and Friendsurance both making waves in the Australian market, changes in business models will also lead to a fintech ripple effect throughout the industry. New ways of interacting between customers and insurers will mean that brokers will need to stay alert to ensure their place in the industry remains strong.
Sullivan noted that fintech “is not expected to drive competition in the insurance industry, but will disrupt the way the insurance industry goes about doing its business.”
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