Brokers need to focus on advisory in digital world
The acceleration of digitisation means there is no longer any question that the insurance broker’s role will transform from transactional to advisory. The only question is when it will happen.
For a glimpse of the future, the insurance industry should look at what happened to stockbrokers approximately 15 years ago. As transactions became digitised and automated, it seemed for a moment that the role of the stockbroker would become obsolete. Yet customers still possessed a strong, ongoing need for advisory services, and stockbrokers were able to evolve into this role. Today, their job is not to push the transaction through, but to use their knowledge and experience to help the customer choose the right stock.
This is precisely what we can expect to happen within the next five years in marine insurance as the process becomes digitised and brokers will need to find other ways to create value. Although the transaction itself will be self-service, customers will still seek to know what to buy, who to buy it from, and advice on what kind of contract they are getting with the insurer.
Sceptics are saying this will never happen because the industry is too complex, but in my opinion it’s just a question of it happening a little later.
In this article, I discuss how brokers can seize this opportunity to reshape their relevancy in an increasingly automated environment.