As brokers are about to converge to Manchester for their trade body's annual conference, Adrian Ewington, underwriting and markets director at Home & Legacy, explains why the intermediaries remain relevant, especially in the high-net-worth market.
I was recently a panel speaker at a digital insurance forum where the topic was ‘Are brokers going the way of the dinosaurs?’ My answer to that is most definitely not.
It’s true, in recent years, digitalisation has transformed the insurance sector. This has brought both benefits and challenges, as certain operations have reduced or even disappeared altogether.
The distribution landscape is certainly changing. The ease with which consumers can source and arrange cover themselves online has inevitably led to some key high-street broker branches closing.
But, while this can be unsettling, brokers will always have an important role to play. As long as there are complex insurance needs, a broker will always be able to use his or her expertise to add value.
A good example of this is high-net-worth insurance, where customer needs are likely to be more bespoke or have varying degrees of complexity.
Specialist advice is required for protecting valuable or unusual items such as art, antiques and high-tech equipment. Also properties might be unique in some way. And high-net-worth lifestyles tend to be more complex too, with travelling customers spending time away from home, sometimes in their second properties, which can be overseas.
It’s not only HNW personal lines insurance. The same is true for areas such as commercial insurance and motor trade. In fact, a broker’s expertise will benefit anything that doesn’t fit the standard mould.
Ultimately, consumers choose how they want to buy insurance. While many people’s needs are met by the simplicity of buying online, others simply need the help of an expert. Even digital natives, who are used to transacting online, will seek out specialist advice as and when they need to.
Insurers certainly appreciate the value brokers bring. Brokers provide the link between the end customer and the insurer. Where the need is complex, specialist brokers bring significant value by gathering all the relevant information and removing some of the administrative burden.
While it may appear that the growth of the online distribution channel is a threat to brokers, this simply isn’t the case. Smart brokers will always make the most of the opportunities to add value through their expertise, even extending services into areas such as risk management and adding further value to their proposition.
A broker’s role has always been to help customers find the right product and insurer to meet their needs. By understanding and embracing the shifts that digitalisation brings, there will always be opportunities for brokers to demonstrate their specialist knowledge and the value they bring to the insurance market.
While the insurance distribution landscape may be changing, brokers are certainly not about to be declared extinct.
- Aviva promises to 'reinvent' insurance and end dual pricing
- Brightside winds up lawsuits under Brendan McCafferty
- Government call for evidence over discount rate revision
- Analysis: How most favoured nation clauses fell out of favour
- Gallagher acquires South West commercial broker
- ABI confirms summer heatwave caused record-breaking subsidence surge
- Gallagher opens new Eastern regional office