Editor’s Note: This story has been up to date to incorporate suggestions from the Insurance Corporation of British Columbia.
Brokers will want to find out the place they fit in as extra customers transfer to online and point-of-sale transactions, mentioned Sarah Thompson, chief advertising officer at Hub International.
Just as shopper demographics are altering, so are shopper shopping for habits, Thompson mentioned Wednesday throughout The Shifting Role of the Insurance Broker, a session at Reuters Events’ Future of Insurance Canada 2021 convention. And because the sharing financial system grows, new insurance coverage merchandise and supply strategies will additionally emerge.
“As a broker, many of these products are now being transacted at point of sale, so there’s really no need for an intermediary. Or maybe there is,” Thompson mentioned. “As brokers, we need to determine where we fit in as more consumers move to online and point-of-sale transactions. How can we, as brokers, add value into that [supply chain] to do quick online transactions that doesn’t require a lot of advice or thought?”
There’s additionally a better want by customers to know what they’re paying for, and customers need alternative and the power to pay for less than these coverages they want and need, Thompson added. That is the place the emergence of usage-based insurance coverage comes into play. While some insurers are providing UBI, “that would have been a nice option in the past 18 months during the pandemic, while many of us were at home and had nowhere to go, but were still paying as though we were,” Thompson mentioned.
What can also be rising is the concept a UBI mannequin will turn out to be extra dominant because the sharing financial system continues. In addition, there’s a transfer from conventional purchases and annual renewals to a subscription-based insurance coverage mannequin, related to what’s supplied by Netflix or Spotify.
Sarah Thompson, chief advertising officer at Hub International, speaks throughout Reuters Event’s Future of Insurance 2021 digital convention.
“Now, some carriers have already introduced this for personal lines,” Thompson famous. “A consideration for brokers is how we maintain that client relationship through regular touch points. And to ensure that the client notifies us of any change to risk, and that we stay top of mind.”
New strains of enterprise are being offered online — every part from pet insurance coverage, cyber, skilled strains to life and voluntary well being advantages, Thompson mentioned.
“For many brokers that relied on traditional distribution that haven’t invested in their websites or online offering, the coming years will be extremely impactful,” Thompson mentioned. “We now know that in less than 12 months, [Insurance Corporation of British Columbia’s Autoplan] will be moving to an online distribution model that will further reduce many brokers revenues on top of the already 20-40% reduction in ICBC revenues that B.C. brokers incurred with the Enhanced Care model that launched earlier in 2021.”
Sharon Craver, ICBC’s senior director of insurance coverage operations, disputed Thompson’s assertion. “When online Autoplan insurance renewals are introduced in spring of 2022, there will be no difference in compensation for brokers when a customer renews in-person or online. Brokers will be required to review each policy, just as they do currently, to ensure customers have the right coverages.”
Craver added that ICBC is targeted on designing an online Autoplan insurance coverage mannequin that will meet the expectations of shoppers who need the comfort to resume online and be accessible to all brokers no matter their funding in net providers. “Our customers are still going to need advice on insurance, so we’re working to make sure our customers will be able to access services online while still getting support they value from insurance professionals. We will continue to work with the independent broker network of over 900 offices in B.C. when the option to renew Autoplan insurance online launches next year.”
For Thompson, issues like open supply databanks will additionally change how brokers negotiate phrases for his or her purchasers, as the info is available by way of different inner and exterior knowledge sources.
“Brokers need to find ways to access, analyze, and enhance the value of the data they own going forward,” Thompson mentioned. “For many brokers, the info is saved in PDFs, Excel sheets hooked up into the dealer administration system. Unfortunately, that’s simply not ok.
“This might be the brokers biggest challenge as AI and machine learning takes over. Without accessing control of this data, brokers will be hugely disadvantaged and will have to adjust their value add in that distribution channel.”
Feature picture by way of iStock.com/FG Trade