What does insurers’ focus on customers mean for brokers?

What does insurers’ focus on customers mean for brokers?

What does insurers’ focus on customers mean for brokers? As every major insurer looks to increase their focus on customers, one broker believes strongly that the intermediary market will still have its place.

With studies from various outlets showing that closeness and communication with customers will be key in the future, Dean Pinataro, account manager at Insurance House, said that brokers will remain an important piece of the market.

“There is no doubt that there will be a need for insurers to be even more customer focused looking at creating even better, more comprehensive customer relationships that make it easier for customers to do business with them,” Pinataro, told Insurance Business.

We see this now with more and more companies offering domestic insurance, combined packed insurance etc.

“However, there will always be a need for insurance brokers to provide sound quality insurance advice to a business. Business owners will still prefer to deal with real people who have their best interests at heart.”

A Capgemini report released earlier this year found that Australia now ranks fourth in the world in terms of customer experience as insurers embrace all-channel experiences with customers.

For the industry, Pinataro highlighted the response to driverless cars as another area to watch in the future. Complex liability issues remain tied to the emerging technology but firms such as Tokio Marine have recently announced their intention to insure the market.

While a variety of challenges remain on the horizon for brokers and the insurance industry, Pinataro noted that opportunities still exist with technology acting as a key driving force.

“Technology is certainly going to continue be a major driver of risk for the future of the insurance industry,” Pinataro continued.

“There are going to be plenty of opportunities to cover risks associated with cybercrime, drone technology and driverless cars.”

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  • John 11/11/2016 12:54:20 PM
    This takeover of intermediated insurance by Australian insurers is a smoke screen. There are lots of different reasons that people use brokers, most of these aren't going to change anytime soon. Direct insurers may pick some of the low hanging fruit but many people continue to wish to use brokers. .

    Risk advice isn't the only reason that people use brokers. Some people wish us to do work on their behalf that they don't have the time or inclination to undertake.
    There are also a great many moderate & higher risk activities that Australian insurers won't write. Therefore insured's have no choice but to use a broker whether they want to or not. This is not going to change unless insurers change their risk appetitie, which they are unlikely to do.

    In commercial insurance it also doesn't follow that cutting out the middleman is cheaper. For PL & PI, underwriting agencies, even with underwriter fees & broker fees, tend to be cheaper than direct offerings from Australian insurers anyway. Property insurance is different but again beyond an average business package the client is unable to fathom the policy & the insurer the risk.

    There are also people who want the best cover & claims results irrespective of paying a few dollars extra. Brokers have better quality wordings & claims outcomes.

    The other thing that the insurers don't allow for is that we perform admin on their behalf. The commission isn't pure profit for us & cost to them. There is an element of profit but we also perform work such as data entry, document issue & receipt & premium collection which saves them having to do it.

    The measures of people buying direct are also not accurate. For example, many brokers have online platforms to enable transactions. A client may confuse this as buying a policy direct when in fact it is a brokered policy.
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