Swinton CEO Gilles Normand believes brokers can be the Amazon of the insurance market.
In recent years, we have seen fundamental shifts across the insurance industry, driven by changes in consumer behaviour. Whether it’s the television programmes we watch, the music we listen to or the food we eat, consumer expectation for immediacy and convenience has never been more apparent.
The businesses that have capitalised on this demand most effectively – the likes of Netflix, Spotify and Amazon – are the ones that not only offer choice and ease, but guide their customers to the products that are right for them through clever algorithms, recommendations and peer reviews.
Using the example of Amazon, this has come full circle. The e-commerce giant decimated the market for bricks and mortar bookstores, which simply didn’t have the infrastructure in place to compete.
Now Amazon is opening physical bookshops in the US. I have no doubt that this will work because it is entering that market armed with customer insight and data, gleaned from years of operating online, which will underpin good in-store service.
In the insurance sector, brokers have a similar opportunity.
Aggregators have undeniably disrupted the traditional insurance market, but they fall short on customer service. As a result, they are in a similarly precarious position now to the one that bookshops were in a decade ago, when infrastructure was their weak point.
Brokers have a far stronger analogue customer relationship platform, built on years of engaging with them through a number of different channels. The brokers that invest in the right technology and strategy to digitise their platform will pose a massive threat to aggregators as their digital capabilities catch up with their customer service capabilities.
Support and guidance
Our research shows that there is a gap in support and guidance for policyholders that is putting them at risk. It uncovered some worrying shortfalls in consumers’ understanding of the insurance they purchase, with misunderstandings around contents insurance, in particular, leaving homeowners in a potentially troublesome position. There is no doubt that the regulator will tackle these issues.
More than a quarter of the 4000 UK adults surveyed said that they didn’t receive a payout on a contents insurance claim. A common contributing factor to this was inaccuracies in their initial application – unsurprising if they are filled out online, in a couple of minutes, with no help from an expert. The automated, faceless insurance process that aggregators have created is precisely why the role of brokers is now more vital than ever.
As the link between insurer and customer, brokers are perfectly placed to provide the information that customers need to make the right decision about their cover.
We can share data with the underwriters, which will generate a better loss ratio and, in turn, benefit the customer.To underwrite risk, you need both a relationship and history with customers. As little more than a technology platform, this relationship is difficult for an aggregator to develop.
In the past, we have built these relationships through our multi-channel approach, a vital part of which was a branch network, which complemented a contact centre and website. But now, less than 5% of our customers come into a branch to speak to us. Times have changed and we are changing with them.
We have seen so many brokers fail to change, and in turn fail to survive. Those that are no longer here were either managed poorly, made the wrong choices or did not have the appetite or capability to invest.
With that in mind, brokers must aim to be truly customer-centric in their approach and use the relationship data that they possess to generate value for both customer and insurer alike.
There are three pillars underpinning this approach.
First, the expansion of key product areas like home and motor to include more additional services such as protection and prevention. This will enable the delivery of a tailored package of insurance products to meet the needs of individual customers. This does not mean there is no future for a brokerage.
At Swinton, we want to leverage our customer base to fuel innovation and collaboration in the insurance sector. We are building a platform that will help to hone emerging technology and develop new propositions and better terms.
Last, this will all be backed by one of a broker’s best assets: an expanded and carefully curated panel of insurers, stronger relationships with individual underwriters to deliver the best outcomes and greater influence across the insurance value chain.
Ultimately, what we are striving to do is fill the gap that the rapid digitalisation of insurance has created. Yes, insurance will be a digital-first industry now, but there is still a need for a guiding digital hand to steer customers towards the products that are right for them.
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