By: By Morné Stoltz, Head of Department: Broker Distribution, MiWay
2020 has tested everybody to the utmost, but it also holds important lessons that brokers need to acknowledge as they prepare for 2021
Personally and professionally, many people found 2020 disrupted established habits and business models. For brokers, in particular, the forced move to online seemed as though it might rob them of a crucial differentiator – the human touch – that sets them apart from the call centres and quote engines that dominate so much of the insurance business.
As it turned out, though, as everything moved online, including much social interaction, it became clear that virtual face-to-face worked almost as well as in-person face-to-face, and there were many additional benefits to be had. As we moved into level 1 of lockdown and restrictions eased, new habits had formed, and it was apparent that a new customer-interface and overall business model could be within reach.
As with any new strategic direction, how brokers look at, and capitalise on this new environment will differ depending on a range of factors. I think we can all agree that there is one overriding lesson from 2020: learn how to use technology to differentiate your broking business from the competition.
Technology plays a pivotal role in each of these key lessons or opportunities:
- Craft a better customer experience. In-person meetings will inevitably remain part of a broker’s modus operandi, but a hybrid model with a preponderance of virtual meetings actually makes it more possible to interact with clients personally more often. To make this work, though, brokers need to become proficient with technology and, particularly, ensure that what the client sees through the webcam is both engaging and professional – get the lighting right, make sure the camera angle is correct and that the backdrop is of a neat, uncluttered space. Personal is good, messy is not.
- Use digital tools to help clients. This is an area where there are innovations all the time – but look out for tools you can make available to help clients evaluate their risks, list their assets and so on –anything you can do to make it painless and more useful at the same time is a win.
- Streamline and upgrade your back office. The financial services industry is highly regulated and that trend is continuing. Use the power of the cloud to access software and processing power that reduces the burden of compliance and administration, and reduces your business risk. The overall effect will be to free up more time for clients and increased profits.
Technology can also be used to access human resources on a per-use basis. For example, technology facilitates access to personal assistants, administrators, bookkeepers and the like. Unlike employees, they will bill based on usage which can be very cost-effective and eliminates the need to provide office space and everything that goes with it.
- Create an ecosystem. Independent brokers are typically small outfits, and thus, traditionally lack resources. The move online makes it possible to create supportive ecosystems that allow smaller companies to compete effectively with larger ones. These ecosystems can cover specialist partners who can augment the service offering, but also mutually beneficial client- or lead-sharing relationships – for example, between a broker and a car dealer.
Innovative insurers have already begun to position themselves as part of wider ecosystems with their broker partners.
There is no doubt that 2021 will present a challenging environment for all businesses, but brokers seem well positioned to use technology and the opportunity opened up by changed or broken habits to reconfigure their business models and play to their strengths. Much remains uncertain but one thing you can bank on: we are constantly looking for ways to help our brokers navigate the rapidly changing business environment,