CEO on the distribution challenge facing the insurance market

Assessing the sector's demand for greater agility

CEO on the distribution challenge facing the insurance market


By Mia Wallace

Applied Systems Europe’s stated ambition of ‘connecting the digital ecosystem of insurance’ received a significant boost last month, with three new insurance providers gearing up to join its commercial lines insurance panel in the UK. Touching on the “exciting times” these are for Applied Systems Europe, CEO Tom Needs (pictured) highlighted how the news illustrates the momentum building under the feet of the business.

“We’ve been in the market since 2018 with our cloud-based broker management system, Epic,” he said. “Since then, we’ve grown rapidly, with over 70 brokers now on Epic and another 30 in the pipeline to go live this year, which will take us up to 100. And with that broker momentum, you’ve got insurers looking at us and recognising the distribution opportunity we present. So, we’re in this ‘virtuous circle’ where our growth is creating further opportunities for growth.”

The additions of Arch Insurance, Ark Insurance, and iprism Underwriting to its panel came about as an organic extension of the conversations Applied is having with providers across the marketplace, Needs said. And from those discussions, he is seeing increased appetite among insurers and brokers alike for innovation that will allow them to make the most of current market conditions.

The distribution challenge facing insurance businesses

“One of the main challenges that this market faces is around distribution,” he said. “Ultimately [insurance] is all about distribution because people want to get their products out to brokers and from them on to the consumers. I think there’s definitely momentum building now in terms of expediting the process of bringing your product to market and people are recognising that Applied is a business that has a very open architecture and can ultimately help bring your products to market quickly and efficiently.”

The shift from a cost-efficiency to an agility drive is in keeping with the first-mover advantage required to thrive in today’s fast-paced environment. People want to seize market share, Needs said, and they recognise that if they’re slow off the mark, they’re not going to be able to do that. In addition, there is a broadening understanding of how consumer expectations have changed, and how insurance is now expected to transact.

“Consumers want more value,” he said. “They don’t want to see insurance as a tax. Ultimately, insurance is something they hope they never have to rely on and so they want it to be a great experience from start to finish. And they expect a digital experience. People’s expectations now are that unless it’s very complex, they should be able to carry out most of their interactions with their insurance brokers online – whether that’s renewals or adjustments.

“That’s the base level of expectation now. We’ve got this generation coming through that has grown up on iPhones and expects everything to be done not just digitally but immediately. So the days of insurance getting away with being a slow-moving industry are over, the sector is changing now and that’s being driven by the consumer.”

Insurance benchmarking – a changed consideration

Insurance businesses can’t afford to benchmark themselves against each other but should be looking for best practice guidance from the industries that have got that consumer-centricity piece right, he said. Examples can be found in social media, retail and banking and insurance needs to take their findings on board and transpose those experiences.

For Needs, who was a newcomer to insurance when he stepped into his leadership role at Applied two years ago, it has been a remarkable time to step into the profession. Insurance has traditionally been quite slow to innovate and collaborate at the level required, he said, but he feels that the work done to “push that boulder to the top of the hill” is paying off and now it’s, “rolling down the other side and starting to pick up pace.”

Where Applied Systems Europe goes next

As to where Applied goes next, he noted that its main area of focus is on growing its composite broker market share. The business has got a great personal lines panel, he said, and now the emphasis is on expanding its commercial lines panel in order to complement its whole product offering and enable it to reach the broadest swathe of the market possible.

“We’re growing year on year while retaining our existing customers, and expect to add at least another 50 brokers next year,” he said. “We do see ourselves as being different from our competitors because we are investing significantly in our technology, we’re blessed to have a great parent company in Applied in the US with this huge investment chest looking to make sure we’re bringing the best platform over here as well. And having Google capital behind us means that we can be very progressive in the way we innovate.”

Looking to the future, Needs said he’s looking forward to continuing to engage with what remains the best part of being in insurance – working alongside entrepreneurial people who want to engage with their customers differently. Insurance supports so many small business owners who are looking to get to the next level in terms of their growth, but it’s also formed by so many similar success stories.

“You get to work alongside entrepreneurially-minded people and hear about how they took their businesses from being so small to so big. And I find those journeys really inspiring,” he said. “But also, beyond that, I love the concept that insurance is ultimately allowing people to take more risks, to be more innovative, and giving them the security to do just that.”

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