The use of technology to automate quoting, underwriting and delivery of insurance products has had a profound impact on the industry and will continue to shape its future. As brokers, we pride ourselves on our ability to build strong, lasting relationships as trusted advisors to our clients, and as respected brokers to our insuring partners. Our unique position enables us to advocate on behalf of our clients when a risk doesn’t fit the appetite of a company’s underwriting guidelines. A positive reputation with a company underwriter gives us the opportunity to make a case for the company to take on a risk it wouldn’t otherwise have considered.
But what happens to the unique broker proposition when underwriters are replaced by computer programs? To continue providing value for our clients, it’s important for brokers to embrace new ways of connecting with our clients through technology. Furthermore, I’d argue that as the insurance industry uses technology to further automate processes, we brokers have an even more crucial role to play in helping our clients select the best insurance products for their needs.
We’ve already seen foreshadowing of what’s coming through changes to risk submissions. Most major Canadian insurance companies have already started reducing and consolidating underwriting and administrative staff as they automate processes. In just a few short years, we’ve watched paper applications make way for e-mailed applications. Now most brokers upload underwriting information directly into company portals. Some policies are even issued without company underwriter review, let alone approval.
Let’s go back to the broker’s traditional role: providing a critical link between the client and the insurance company of choice. How does a broker fulfil this role of client advocate when the person making the underwriting decision is a computer? I’d argue that, as human expertise is replaced by computer algorithms and client portals on the company side, the broker’s role as trusted advisor becomes more critical.
Technological changes aren’t doom and gloom for progressive brokers. In many instances, the ability of brokers to directly enter and issue policy documents on behalf of their clients has improved the speed and accuracy of document issue. This is a positive outcome for our clients and can strengthen the trust they put in us. That’s because now we can in real time not only discuss products and provide quotes, but also confirm costs and issue policies. This ability is important as more direct writers enter the scene and clients increasingly expect the quick completion of a sale.
While some clients will choose to self-serve at points, they may still require guidance and assistance from someone with insurance knowledge. Recent consumer surveys suggest there’s a growing desire to complete insurance transactions online. But many consumers lack solid understanding of the products they’re purchasing. Basic insurance information is available online, but it takes more time and expertise to compare coverage and determine how much coverage a client needs. Brokers must make a consistent investment in education to provide more in-depth knowledge to consumers on their insurance purchases. This will be the true value of the future broker.
Instead of looking at insurance-industry automation and the rise of digital solutions as threats to broker-client relationships, we must embrace it – it’s not really about technology; it’s about building relationships. This means communicating with clients using their medium of choice, be that face-to-face, phone, e-mail, mobile device or the web.
Technology, the rise of direct writers and self-serve options have all been criticized as leading to the commoditization of the property and casualty insurance industry. This may be true, but as the saying goes, there’s no turning back once the floodgates open. We as brokers must recognize the demand for self-serve, transactional-based relationships is not going away. To stay relevant, we must evolve our current service offerings to meet the diversified needs of clients.
Gina McFetridge is vice president at Archway Insurance. She currently sits as treasurer on the executive board of the Nova Scotia broker’s association, IBANS. Gina holds a B. Journalism, Master of Arts and CAIB Honours designation.
