By Morné Stoltz, Head of Department: Broker Distribution, MiWay
To be successful into the future, brokers need to embrace digitalisation to improve the customer experience radically as well.
Cost has always been a factor when it comes to purchasing insurance but, in today’s Digital Age, affordability is no longer seen as a trade off with quality. Consumers have become used to the fact that technology has improved things for them while also driving down costs, and they expect the same principle to hold good across all industry sectors.
The COVID-19 pandemic has also accelerated the drive towards digitalisation.
To succeed in this environment, brokers need to understand the complex nature of digitalisation and how to use it to fulfil rapidly inflating customer expectations while maintaining their margins. Some of the key issues they should be thinking about include:
Using digital technologies to reduce costs. Brokers have high administrative and compliance obligations, all of which consume money and time. The loss of time is particularly harmful because the broker’s unique selling proposition is his or her ability and willingness to build relationships with clients. Brokers should be constantly on the lookout for applications and services they can consume on a pay-as-you-use basis to reduce their back-office expenses. Personal assistance, bookkeeping, invoicing and similar services can be accessed on the cloud with no need to invest in extra people, office space or technology. Management costs and time are also greatly reduced.
Leverage the digital initiatives of insurers. Some insurers are proactively undertaking digital transformation. Initiatives include expanding App functionality and moving many processes online; claims is a good example. Brokers should be looking at ways to integrate with these initiatives to reduce their own costs or improve the experiences of their clients.
One good way to help brokers would be a self-service portal which allows them to generate their own quotes easily. The self-service quoting functionality should allow brokers to test variables to accommodate client requirements. Another benefit should be a reporting mechanism allowing brokers to view their full business with the insurer and to analyse the existing customer base for further opportunities. Other functionalities could be added to the portal over time.
Another valuable initiative would be to complement the portal with a broker call centre to which brokers can “outsource” the process of furnishing quotes and confirming underwriting to the call centre. The call centre can then handle all the subsequent administration, including retention and claims.
This kind of approach positions the insurer and the broker as part of the same ecosystem.
Use digital technologies to improve customer experience. As noted, consumers have decoupled affordability and service quality. In other words, brokers must also explore how they can use digital technologies to improve service. Part of this means smart use of what the insurers offer (see above), but other areas should be investigated.
Perhaps the most obvious way that brokers can use technology in this sense is communications. The expectation now is for instant and targeted communication, and this is very possible even for a small brokerage if it is technology savvy. The cloud makes these kinds of technology very accessible and cost effective. It’s also becoming easier for brokers to access technologies like Artificial Intelligence (AI) and Machine Learning (ML). Once the preserve of those with large IT budgets and specialist staff, these technologies are now available as services on the cloud or are being embedded in software. AI and ML offer brokers the opportunity to learn much more about their clients, and so embed themselves in each client’s life journey. Used intelligently, these technologies will help brokers access information that will enable them to respond proactively to life events and so increase their cross-selling capability. A broker who knows that a client is selling a house or vehicle is in pole position to offer cover on the new purchase, for example; or the birth of a child could be the cue for a conversation about medical insurance or providing for tertiary education.
COVID has created the impetus for a sustained move onto digital platforms, and this process will continue. Brokers must ensure that they are on top of the changes, and alert to how they can help reduce their own costs and so make their services more affordable, while also satisfying growing consumer demands for better, more personalised service.