It is fair to say that, as a breed, insurance intermediaries have long been the ‘Apple’ of the insurance market, offering innovative solutions, creative value added services and advice to their customers.
In fact, you could say that this is their raison d’etre and ultimately is what justifies their existence.
Why is it, then, that despite their best efforts insurance brokers continue to fall short in respect of what the current generation of digital customers want? Recent Target Group research amongst a number of insurance professionals highlighted that 87% of respondents believe that the broker profession needs to innovate?
Target Group has commissioned research from both individual consumers and the industry in an attempt to understand the root cause of this apparent disconnect.
Unsurprisingly 80% of those questioned suggest that brokers should look to other industries for ideas and inspiration as to how they can better meet customer needs; with 85% advising that they complete at least some aspect of their insurance journey on-line, via a connected device.
A broker’s appetite and desire to add value for customers is part of their DNA, so why are they apparently not meeting this base requirement? Perhaps encouraging the use of digital channels in their customer journey could be perceived as a potential threat? After all, part of their value proposition to clients is often a personal service with face to face contact and product advice. Providing this digitally may narrow the differentiation in the client’s mind between the service they offer – ensuring that the products are fit for purpose – and just purchasing the insurance directly from insurers online.
A clue may be in our findings wherein 70% of industry professionals called for “significant investment” in technology to drive their distribution solutions, although 58% of those could not clarify how much of their budget they would be willing to set aside.
Even though 56% of the market claims that distribution is its greatest opportunity, many intermediaries are unable to do everything they would like, for their existing clients and in their quest to attract new clients, as their technology will not allow it. Most intermediaries are stuck in relationships with software vendors or insurer provided solutions that allow little flexibility, differentiation or individuality instead, having to offer what everyone else has or what the majority want.
Globally we are starting to see an interesting shift with a number of large insurers reviewing their existing digital proposition and looking to switch software providers. This could likely be a turning point as they search for a solution fit for the digital age – more than half of our tech-savvy respondents pleaded with brokers to learn from their other digital interactions.
Despite some of these digital challenges, brokers are still well placed to continue to provide their clients with a differentiated offering. Accelerating the move into the digital age can only help them to cement existing relationships and further develop online propositions for those who prefer to transact digitally.
Explore the "Myth vs Reality - the expectation gap in the Insurance industry" in this White Paper