An expert on the disruptive potential of technology has diagnosed insurance broking and other insurance intermediaries as potential candidates for disruption by new technology.
Rachel Botsman, a leading authority on collaboration through technology, has told insurance brokers at the NIBA Convention that they were working in an industry that exhibits some of the characteristics of those that are currently targets for disruption.
Citing recent personal experiences with her own life insurance agent, she said that insurance brokers sometimes lacked efficiency in transacting business as well as leaving the customer with an impression of a lack of transparency.
She said ‘complex experiences’ such as these as well as ‘broken trust’ were two leading indicators of an industry ripe for disruption. The other two she named were ‘redundant intermediaries’ and ‘limited access’ to products and services.
Armed with multiple examples, she demonstrated how technologies that empowered individuals to obtain products and services in a simple, transparent, collaborative and efficient way were sweeping away old ways of doing business.
In terms of insurance, she said Bought By Many – an online platform that allows people to form their own buying groups to gain power over insurers in their search for coverage in niche lines – was an indicator of the potential future of insurance.
She said the founder of Bought By Many, Steven Mendel, had suggested the ‘glacial’ pace of the insurance industry was holding it back, as well as the fact that while distribution had changed to some extent – through aggregation – products and the individual power of consumers had not.
Botsman said brokers should be thinking of innovations that achieve the ends brought about by disruption. She said they should aim to provide simple, efficient and transparent service to customers, provide service that transacts business in real time and create marketplaces for customers that empower them.
Perhaps most of all, she suggested that brokers reimagine their market through a 'human lens', and look for ways to eliminate areas of the insurnace process where customers were 'feeling pain', and replace it instead with empowerment.
She warned brokers against taking an ‘ostrich’ approach to change, or a ‘fight’ response such as that exhibited by the music industry when it came to peer-to-peer file sharing services, and rather suggested that ‘pioneering’ would result in success.