There has been a lot of discussion and thought leadership generated by the hard and hardening market conditions that are sweeping the UK insurance industry. The latest research from Aviva’s Broker Barometer appears to corroborate the concerns, reflecting that 38% of brokers predict the hard market will last another 12 to 18 months.
The actions taken by brokers to mitigate the challenges of the hard market and/or to seize the opportunities that it offers have varied significantly from business to business. Some firms have taken the last 18 months as a time for introspection, as a chance to work on the internal projects and strategic ambitions that the frenetic pace of a pre-COVID environment did not allow. Others have registered the crisis as something of a starter pistol, launching into expediated transformative projects and accelerated acquisition trails.
Time will tell whether businesses have taken the right approach - but generally speaking, both seem to have a similar range of advantages and drawbacks. One thing that COVID has made very clear, however, is that, unlike in war, in insurance the Fabian Strategy is rarely an option let alone a good idea.
Those businesses who decided to simply wait out the pandemic aside, most broking firms have implemented or accelerated change programmes, whether on an internal or external basis. As outlined by Aviva’s report, for many this has taken the form of diversifying into alternative sectors and customers groups – with 88% of surveyed brokers reportedly having taken that step. New markets include financial services, real estate and the public sector – while more niche markets such as the high net worth space are also steadily growing in popularity.
Yet whether brokers are looking to make a success of new ventures or to counteract the impact that reduced market capacity is having on their traditional offerings, there is a great deal of groundwork that has to be done to communicate those intentions. It is imperative, therefore, that insurance professionals take the time necessary to find the ideal combination of channels required to keep clients up to date with any shift in strategic focus or change in market conditions.
In a recent interview, Blue Prism’s Hugh Pelling stressed the need for insurance businesses to offer a truly omnichannel experience to consumers – i.e., to open multiple channels and allow customers to interact in the channel of their choice. And choice is the keyword there. In the world of the consumer, choice is king, and COVID has only accentuated flexibility as an expectation, as well as a demand of customers when it comes to insurance services.
Communication is something of an easy win for insurance firms looking to showcase that flexibility quickly, effectively and, for the most part, inexpensively. A new report from the digital marketing firm Hitsearch outlined how 50 insurance companies across the UK are tackling digital marketing opportunities. Many firms have accessibility issues on their websites and offer a poor digital user experience – a distinct faux pas in this digitally savvy society.
In addition, email marketing efforts tend to be lacklustre and not enough insurance businesses are recognising the full range of services that can be utilised to promote strong customer connections. For smaller firms with limited budgets, these do not have to be big-ticket purchases that will require the efforts of dedicated personnel - even something as simple as using the right search engine optimisation techniques, or getting to grips with social media, can make all the difference when conveying change to clients.
Brokers need to work out the main ways in which their clients actually want to be communicated with. Getting the balance wrong could result in policyholders being spammed by an overload of information across a swathe of platforms or, alternatively, not receiving critical intelligence. The ideal step, therefore, is to get in touch with clients (via the platforms already being operated) and opening the floor up to them – the client is communicated with in the way that works best for them and the broker can rest assured that the critical information that they are delivering has found its intended recipient.