Brokers can adapt to big industry changes without needing a revolution of thinking
Published: January 30, 2019
Updated: February 1, 2019
Author: Luke Jones
CATEGORY: Industry News
Brokers are expecting big changes ahead as several industry impactors will enter the market. Technology will both increase broker capabilities and introduce numerous disruptors, while growing risks are affecting profitability. However, Dan Jones, outgoing group head of broker relations and marketing for Beazly, says brokers must adapt but don’t need wholesale changes.
The important thing for brokers is evolution not revolution.
“My take on this is that brokers do have to change – they have to become and they are trying to become more consultative,” Jones said. “I watch the brokers trying to merge with consultants or become consultants and that’s not easy, but they definitely need to be consultative,” and take on the role of the overarching problem-solver for their clients.
Brokers can certainly leverage some disruptors, such as increased data gathering. By analyzing information, brokers can be more in tune with customer demands and use the data to their advantage.
“They’ve amassed all of this data over the years – it’s disorganised, it’s erroneous, etcetera, but they are sorting through that and getting into the position where they can take advantage of all the data. I think the brokers of the future will be very data-aware,” said Jones.
How insurance is delivered to the customer will change in coming years. Brokers will be able to streamline what is currently an expensive supply chain and become more market efficient.
“It will, I think, be an evolution, not a revolution. I’m not one that sees the brokers or underwriters disappearing in a year or two [and] in Beazley’s planning horizon, which is more like five years, we see brokers as essential, but operating in a different way.”
Consistent growth will be the goal of all brokers, those who will be able to adapt to the industry disruptors and maintain profits, according to Jones.
“The main thing brokers need to do is keep growing, and I think they’ve figured out that there’s only a hundred Fortune 100s, and risk managers are brutal on squeezing the fees down, so I don’t think they see a lot of profit growth in the high-end,” he said. “Brokers are really focused now on the middle market and it’s interesting because the middle market relationships still matter a lot, so you need the personal touch, but, on the other hand, to grow profits there, they need to get more efficient, and in every part of the cycle, from identifying prospects all the way through to renewing policies.”