Steadfast 2014: Brokers face ‘brutal Darwinian selection’

Steadfast 2014: Brokers face ‘brutal Darwinian selection’ | Insurance Business

Steadfast 2014: Brokers face ‘brutal Darwinian selection’
“Social media will provide brutal Darwinian selection” in which customers will punish service providers that do not deliver, says CGU CEO Peter Harmer.

Harmer told delegates at the Steadfast Convention yesterday that in a changing world with many different factors at play, both insurers and brokers will ultimately face two of Darwin’s choices – adapt or die.

“Brokers and insurers will ultimately be faced with Darwin’s two choices: adapt or die. It may not necessarily be the biggest or the strongest. Like the insects and the animals, it will be those that adapt best to their changing environment will win. You guys are as well placed as anyone to prosper from the changes ahead.”

He noted a number of global shifts that are reshaping the world and insurance: the information economy, digital frontier, the increasingly hostile environment, the rise of Asia, and the empowered customer.

“The balance of power and knowledge will continue to shift towards the customer. Customers will have unparalleled choice and information […] allowing them to pick and choose who gets their business. They will be more demanding “
Harmer said customers will look to other sectors such as retail to set the benchmark for the service they expect from the insurance industry, and “come to the table as an instant expert”.

They will expect advice that they can’t get themselves from social media, he added.
“Social media will provide brutal Darwinian selection. Customers will swarm together to reward brands that deliver but punish those that don’t,” according to CGU CEO Peter Harmer.

For brokers to survive in a changing world they will need to switch their traditional transactional broking models to advice-driven models, Harmer advised, whereby the broker focuses on understanding their client’s needs and businesses rather than trying to fit their client needs with what they already provide.
“It‘s an absolute imperative,” he added. “Brokers that don’t do this will face the prospect of becoming irrelevant and competed out of business.”

This comes as CGU unveiled its revitalised brand, at the convention, which it believes the changes better reflect its standing as a contemporary, confident, and ambitious organisation.

A refreshed CGU Insurance logo and colour palette will be followed by the launch of a national television campaign next month.
Harmer said it was the right time to give the brand a new look for the future.