In the article ‘Carriers are thrashing brokers in client turf wars,’ one reader agreed that limiting brokers to contracted insurers or wholesalers may signify the extinction of the industry as we know it today.
“You're right. Our system is archaic. Our partners, our contracted insurers, have access to data we brokers have to submit to issue or renew a contract,” wrote Paul C. Armstrong. “We have no influence on what is done with the information to assist in rating or anything else. The insurer is in charge.”
Jenna Richardson, director of North American Insurance Services for Xchanging, told Insurance Business that in the ongoing battle for client access, brokers are failing to adopt a critical piece of industry knowledge.
The concept of analytics and 'big data' has been transformative to the insurance industry, said Richardson, allowing carriers to gain a competitive advantage where once commoditization seemed like a real threat. However, one group is still failing to capitalize on this new technology — brokers.
“Insurance is extremely data-driven — it generates 2.4 billion gigabytes per day,” said Richardson. “Carriers have really been digesting that information to make business decisions, evaluate claims and improve rating and pricing. Brokers, on the other hand, haven’t really been leveraging the data they’ve been collecting."
Armstrong agrees, predicting the demise of brokers within two decades.
“Limiting a broker to place business with only contracted insurers or wholesalers will defeat us and probably sooner than 2034,” he wrote, “unless some action is taken immediately between the broker force and the designated government body.”
