To succeed, the broker of the future must transition into a consultancy role that provides an enhanced service and greater value to customers. This means embracing change through customer-centric, data-first technologies, according to leading broker platform provider Novidea.
Every business knows that success means staying one step ahead of the competition and delivering greater customer value. For insurance brokers, this is no different. The world is changing, and brokers large and small know they need to keep up, including how to avoid the ever-present threat of disintermediation.
The broking world is highly competitive and if a broker isn’t meeting a customer’s needs, it’s a matter of a few clicks to find one that will. And, more often than not, these decisions are made in the first few minutes of the customer-brand interaction.
While Covid-19 has caused many unforeseen setbacks, it has also been a catalyst for change and for insurance businesses to find better ways to deliver an enhanced service that goes above and beyond the transaction. “Today, customers want more from their broker,” says Ben Potts of Novidea. “To do this, brokers need the skills and tools to become consultants – and technology can provide the answers.”
Data-first brokers
Insurance is often at the bottom of a customer’s to-do list, only looked at when necessary. This explains why historically many brokers have only talked to their customers at renewal or when there is a claim. The opportunity now is to use technology, with a data-first approach, to cost-effectively engage more closely and consistently with customers, with products and solutions built for their individual needs.
“Before the Covid-19 struck,” Potts says, “many insurance premiums were falling, which impacted brokers’ commissions. This raised the question to brokers, and MGAs, of how they could fix the issue and get more income from customers.”
Previously, it was assumed that the falling income could only be rectified by working harder with more resources and that the rising costs on placing risks and servicing customers was unavoidable. However, the pandemic has enabled advanced brokers and MGAs to take a data-first approach and deliver more value to customers, whilst at the same time benefitting from greater operational efficiencies.
“This enables brokers to increase their income, whilst also reducing costs,” Potts continues. “Brokers have to accept that commissions and fees may not go back to where they once were, so to gain higher margins they need to use technology to reduce their costs, maximise value for customers, and increase income through cross-selling and upselling.”
The mobile broker
The need for brokers to be able to work anywhere, anytime, has never been more acute than now. Brokers without this capability over the last few months have no doubt learned the hard way about the downsides of sticking with aged legacy systems.
Further, we live in an ‘on demand’ culture; as consumers, all of us have become accustomed to an instant and seamless experience (Amazon and online banking for example), and insurance is no different. As such, winning brokers need to be available when customers need them, with full access to their information, at any time.
Potts explains: “We’ve been saying for a long time that brokers need to differentiate and having information on the move is a big thing. You can’t have a system where you need to go to an office in London to print something out before going to a customer, especially now, and if your customer asks you a question, you shouldn’t have to go back to your office to find the answer.”
The future of broking is about “scaling to mobile”, Potts said. That it is about taking remote working to the next level to support growth; having the capacity, capability, core systems, processes, and governance in place to fully support client requirements when away from the office.
“If you try to scale traditional technologies, it soon gets very expensive,” he said. “But with cloud-based technology the infrastructure is already there. It is robust and scalable, so the cost-per-licence actually gets cheaper the more people you put on a cloud model.”
Data-driven insights
Most brokers hold enormous amounts of data that could help them to better understand their customers’ needs. To make use of this data, however, they need to be able to access and leverage it, which is not easy when it sits in silos or different spreadsheets. By using a cloud-based platform, brokers can now bring all this data together to generate actionable intelligence, whenever needed.
Cloud technology also gives brokers the ability to view data and analytics across their entire business operations, as well as at an individual unit level. This level of insight, says Potts, is incredibly powerful and opens the door for brokers to act as trusted advisers and cross-sell additional products to clients, given the data they already have on them.
For instance, when handling a portfolio, brokers can benefit from knowing which customers buy what from them, all on one screen. It is then an easy fix to see where the gaps are and propose additional products, or added value services such as risk management advice, training, or surveys, to fill them.
“This also enables COOs to see what good business is and why it is good business, rather than just looking at the aggregate,” Potts says. “The aggregate position may just say that the business is doing okay, whereas some customers could be hugely expensive to run, whilst others are very good and profitable.
“Modern COOs want to open this Pandora’s Box and have the technology to assimilate data and work out what is good business and why. Covid-19 has enabled this new breed of COO to leverage these insights, to get more spend and resources to make these changes faster.”
New revenue, better service
Top talent can be expensive, and to offer a superior level of service without the use of technology can take a lot of time, cost, and resource. Whereas, implementing technology to automate mundane manual tasks can give brokers more time and insights to interact with all customers, not just the bigger ones.
“This means that brokers can deliver a better experience and ensure customers are given the appropriate cover for the best premium. “It’s consulting with subject matter knowledge and expertise at the start to make sure it’s the right premium with the right coverages. It’s the correct thing for their customer, and the best way for brokers to stay relevant and be successful.”
Potts continued, “Systems like Novidea’s also enable brokers to take all of their data and automatically create documents and reports. These can then be sent out as PDFs to customers. This lets you treat your smallest customer like a top ten customer. If brokers do that, they will improve customer service and collectively gain more income, whilst not being subject to additional staff costs.”
This future is happening
The pandemic has accelerated the need for technology to play a greater role in creating a more customer-centric insurance industry. Working in a way that is more efficient and takes brokers towards being true consultants with data insights at their fingertips will not only benefit the brokers, but their customers too. This means more wins and greater customer retention, as well as improved profitability through increased revenue generating activities, such as cross-selling and up-selling.
“And with the Novidea platform,” adds Potts, “a broker is able to do exactly that. Other sectors, worldwide, are already working in this way. And doing rather well. With the right platforms in place, I believe this will also be the future for insurance broker businesses.”
What is the Novidea platform?
At Novidea, they are capitalising on two unstoppable trends: cloud migration and the increasing use of data-driven insights. Covid-19 has accelerated the adoption of cloud-based services and, five years from now, all insurance distribution will use this technology.
Novidea, is a leading global provider of the data-driven, cloud-based platform that enables brokers, agents, and MGAs to drive operational efficiencies and growth across the entire distribution lifecycle. A recent series B fund raise of US$15mil, is now enabling Novidea to further develop the platform and expand operations in the US, UK markets, and international markets.
Built on Big Technology, the Novidea platform provides a complete ecosystem that covers every aspect of an insurance business, including a 360-degree view of all management information, an integrated front- and back office, and automated workflows that streamline every phase of the customer journey.
A secure portal can be fully integrated into the platform, providing customers with a convenient and seamless service, with access to all of their documentation and data. At the same time reducing the time, resources and subsequent costs needed by brokers to manage customers’ 24/7 needs.
Further, as a cloud-based platform, brokers, as well as agents and MGAs, have instant access to all their customers’ data, with actionable intelligence available, from any device, anywhere. This enables them to make more-informed decisions and deliver greater value as true risk consultants, through delivering products and services that are tailored to each customer’s needs.
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