The number of independent insurance brokerages in Canada who are creating and following digital strategies is on the rise, according to the 2021 Applied Digital Brokerage Survey, an annual survey conducted by Applied Systems to provide an industry-wide benchmark for brokerages to measure their digital technology adoption and progression towards digital transformation.
As the insurance industry has pivoted to new operating and servicing tactics during the COVID-19 pandemic, more and more brokerages across Canada have started to adopt innovative technologies like customer self-service tools (38% are now using client portals) and data analytics (32%) on top of their foundational broker management systems (BMS). Furthermore, 81% of brokerages are now hosting their software in the cloud, which provides a flexible operating environment with scalability for business growth, stronger business continuity protection and increased mobile access to business information. Cloud hosting makes working remote working easier for brokers, which has been essential during the pandemic.
“Whether it was [brought about by] the COVID-19 pandemic or just the fabric of Canada (with small towns and a spread-out population), brokers now realize that having a digital offering is very important,” said Steve Whitelaw (pictured), vice president and general manager, Canada, Applied Systems. “The pandemic has accentuated that need to be able to remain in contact with customers, and also enable brokerage employees to work and be productive wherever they are. One day we’re in the office, the next we’re not – it has changed depending on the different pandemic restrictions, but the insurance industry must go on, so it’s critical that we’re able to support that.”
The 2021 Applied Digital Brokerage survey found that 73% of brokerages in Canada have a digital strategy, and 92% plan to implement their strategies within one to five years. While digital strategy adoption was strong among brokerages of all revenue buckets, the highest adoptions (at 91%) was among the mid-to-large brokerages grossing $10 million to $25 million.
“It’s important for smaller brokers to think about their business strategies and how a digital strategy will enable what they’re trying to do as a business,” said Whitelaw. “There’s a saying: technology is the great enabler. If small brokerages can leverage digital platforms to support their business goals, whether it’s growth, retention, improving customer service – whatever it may be – I think that’s critical. We try to encourage our small brokerage clients to deal with this [digital transformation] in small pieces and figure out what is the highest priority within their business strategy. They should start by focusing on that priority [e.g. growth, retention, 24/7 mobile], and take it one piece at a time, as opposed to trying to do everything all at once. It’s less intimidating that way.”
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According to Applied, digital strategies enable brokers to reimagine how they do business through innovation. For example, brokers can use technology to improve how they communicate with customers and employees, to work more efficiently, and, in doing so, to increase profits. Whitelaw said it all comes down to having a good understanding of the overall business, and figuring out which areas could be improved with technology. Once that initial assessment is complete, brokers can then progress with confidence on their digital journeys.
“What we’re trying to do is enable our brokers to be connected in all steps through that journey, but also be central to it,” Whitelaw told Insurance Business. “If you envision a wheel - and on the outside of that wheel are all the different touch points, starting from marketing to sales, to quoting, to new business, to servicing a claim, all those different activities within that digital journey - central to that, we’re trying to equip our brokers such that they own that customer experience. Regardless of the line of business, regardless of the market that is insuring the risk, that customer experience is the same, and it’s owned by the broker - and the broker can improve it and make it better by using digital tools.
“By having these studies and showing brokers what their peers are doing, where they are or aren’t acting, and where those opportunities [for digitalization] may be, we are trying to help our brokers figure out what they want to do with their next step so that they can continue to grow and thrive in the industry. There’s no reason why a broker can’t grow, thrive, and take business from the direct markets, wherever it may be, based on the digital experience that we can provide them today, and will continue to improve upon as we go.”