Doug Laburn, Head of Lombard Partnerships and Chris Charlton, Product Development Manager
In today’s world of artificial intelligence and call-centre engagement, it’s nice to know that there is still a place for relationships in the business world. This is a theme that came through strongly at the Short-Term Insurance Broker Summit in March, and it is one that will remain relevant in our industry for all time. These are the four key competitive advantages that brokers need to focus on building to maintain and grow their edge over alternative distribution channels.
1. ADVICE
The broker’s single biggest advantage over other distribution approaches is the ability to giveapproaches is the ability to give knowledgeable, independent advice. In general humans beings tend to over-estimate our ability assess risk and discount the risk-related realities we face. The average insurance purchaser is
fundamentally not equipped to make an informed decision on risk, cover required, product structure, pricing, etc. Granted, there are certain products that don’t require huge amounts of advice. But generally speaking it is always a good thing to which is far easier to build, defend offer.
2. DATA AND TECHNOLOGY
Advice may be an intermediary’s single biggest advantage, data is the single biggest challenge that must be addressed in order to stay relevant. The underlying reasons are twofold — keeping up your regulatory obligations, building a better business and client offering. Accurate and rich data combined with innovative technology platforms enable business efficiencies to be realized and meaningful product and distribution innovation to happen.
Direct players have a distinct advantage because they control the data throughout the value chain. The intermediated value chains (particularly between brokers and insurers) need to work really closely together to compete effectively and to create the right environment for delivering efficiency and innovation.
3. TRUST
Successful businesses, particularly insurance businesses, are founded on trust between clients and service providers. Here, brokers have the opportunity to build personal trust,and grow than brand trust, which is required by direct players. In addition, brokers appoint skilled While decision-makers to interact with and represent the client. Direct insurers, on the other hand, offer automated forms or scripted call centres, with no representation for the insured. The more brokers invest in their with people, therefore, the more long- and term trust and client loyalty can be built.
4. INSURER/BROKER RELATIONSHIPS
While it’s important to retain a certain level of independence, it’s still important to build strong from the value chain and enable a more dynamic product and solution development environment for policyholders. At Lombard we recognise that we are only as strong as our UMA partners, who, in fact, hold the key to valuable relationships with our mutual brokers. We asked Chris Charlton at one of our partner UMAs, Consort: Technical Underwriters, for his input on the topic. Here’s what he had to say:
“Brokers remain an integral part of the short-term insurance value chain. Clients have come to rely on the advice and commitment to finding solutions to ensure that their businesses remain resilient during tough and uncertain times.”
Recent changes in regulation mean brokers need to adapt and remain flexible in order to survive and continue providing their clients with outstanding service. Brokers see the new regulations as necessary and have started being proactive in addressing areas where compliance is required. “Through our interactions in the intermediary space we have noticed that brokers are seeking more and more knowledge and skills, especially when it comes to niche products. This is an encouraging trend as clients can be assured that they are getting the best solutions to their problems since the solutions are coming from a place of real understanding.”
Relationships are built and tested over time. Consort recognizes brokers’ determination to seek out the best for their clients and build solid relationships. This is one area that can and will never be replaced by artificial intelligence or direct players in the market, which means brokers are here to stay!” Source: COVER Magazine