The role of the broker remains relevant despite the industry facing digital disruption “on all fronts” as insurtechs continue to surge in popularity, a major report has revealed.
In just a short time, insurtechs have changed the face of the industry – in fact, almost a third of consumers say they now rely on the new players either exclusively or in combination with incumbents, the World Insurance Report, released today, has found.
The report from Capgemini and Efma urges insurers to prioritise innovation and collaborate with insurtechs as a wave of new technologies confronts the industry across almost all sectors.
But brokers too need to take note and adapt to the new world, according to Vijay Amballa, group VP of global insurance at Capgemini. As technology becomes more and more complex, brokers’ jobs are also becoming more “sophisticated,” he told Insurance Business.
“The insurance industry and the products that they offer are so complicated that for a layman trying to understand it through a mobile device or an app, having that access makes it easier, but it is still not easy enough for them to understand what a complex policy might look like,” Amballa said.
The emergence of technologies such as chatbots and social media platforms only provide more avenues for brokers to collect data on customers, which they in turn can pass to underwriters – a valuable role in a world where data is king.
However, in a “vast insurance market,” there are inevitably some lines where technology could cut out the middleman, according to Amballa.
“I think that is absolutely a possibility for a few of the personal lines, but for the majority of the insurance industry, I think there is still a valid role [for brokers] to continue,” he said.
Importantly, brokers must “retool” in order to become more powerful in the new connected world, and must ensure that they understand emerging technologies, as well as the new demands from customers.
“If they don’t do that, obviously they are a little bit lost in the process, but it is for them to retool themselves,” Amballa commented. “[Brokers’] jobs are more sophisticated, but they are still going to stay.”
Efma’s secretary general, Vincent Bastid, added, “The continued reliance of consumers on digital technologies that support mobile apps, social networking, on-demand services and the like makes it clear that the mass market has entered a new phase. The insurance industry serves the masses and must adapt to the new terms of engagement.”
Could brokers turn away from panels?
We need to change the market, say broking execs