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Where do brokers fit in the new insurance world?

Where do brokers fit in the new insurance world?

Where do brokers fit in the new insurance world? Brokers need to take up a role as the “glue” in the developing insurance ecosystem, according to Accenture’s head of insurance research.

The UK saw record levels of investment in insurtech during the first half of 2017, with 30% of all deals in Europe taking place in London, an Accenture report revealed last week. London clearly remains a key global hub for insurance despite Brexit nerves, but brokers must take a more active role in the developing landscape in order to secure their future, Simon Tottman, head of research for insurance, UKI, at Accenture, told Insurance Business.

While insurers and reinsurers are paying more attention to the insurtech scene, brokers largely remain in the backseat.
“Interestingly, we don’t see brokers playing as big a role at the moment, and that’s something we would like to see change,” Tottman commented.

“We think brokers need to be more involved in the start-up space and in technological innovation in general. The reason for that is that if you look at some of the challenges facing brokers today, and some of the changes in the broker distribution model in the last 10- to 20 years, many of those have been rooted in technological innovation – things like direct online sales by insurers, website sales, and aggregators,” he went on to say.

“It has often been a new technology, or the combination of a new technology and a new distribution channel, that has led to brokers either having to diversify away from their core activity, or face the risk of disintermediation,” Tottman said.

Insurers are increasingly having to work with a range of different partners, from analytics firms to technology providers and device manufacturers, but there is a significant role that brokers can play within those relationships.

“Brokers can play a role in that ecosystem – indeed they can be fundamental in forming those ecosystems,” according to Tottman.

“Just like many of the commercial brokers have recently begun diversifying their activities away from the traditional broking activity, towards more of a risk advisory, management consulting type role, there’s an opportunity now for brokers to look at these new ecosystems that are forming and to see how they can play a role as an intermediary, acting as a glue, if you like, with all of these new partners.”

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