The art of survival in an evolving insurance and distribution landscape
Ten years ago, the insurance industry's distribution landscape was relatively straightforward. Today, that has changed radically, with more players competing in a softening market.
Across this landscape the lines between brokers, underwriting managing agents (UMAs) and insurance companies are blurring and the challenges they face become increasingly similar.
The bottom line is, to compete in a tougher marketplace - UMAs must ensure that they set themselves apart, not through price, but by adding value and innovating.
Knowledge and insight are the keys to this and will help unlock the long-term objective of underwriting profit in this softening market. And this is where data comes in. In this new world, data is king! Getting, recording and keeping accurate data is absolutely vital - whether it's risk data, administrative data, or marketing data. It needs to be collected, analysed and understood in order to gain competitive advantage by understanding the customers you want to attract and how to best serve their needs. In claims there is real value added in the use of data. Without claims data it is impossible to get the claims information you need for pricing. Without comprehensive claims data you will know nothing about the value of the case.
For UMA's to provide insurers with a superior ROI, they need to know their market better and should be providing innovations in claims. The first step in doing this is for an UMA to gain a deep understanding of the market and how to position themselves in it. What's also integral to that is to understand their role in the value chain. The more of the chain a UMA can control, the more opportunities they have to add value. For example, in claims, if you can innovate to manage claims faster or smarter, that will add real value and enhance profits.
At the same time, those UMAs that can demonstrate technical competence will wield great power in an industry with shrinking technical underwriting expertise. This expertise will allow a real competitive advantage to be established and open up more opportunities in niche and specialist areas of the market. Despite the pressure from regulation, the UMA market will continue to grow as entrepreneurs seek to improve their commission income - and that will be achieved by UMAs who strive to be different.
By investing in the right technology UMA's will be able to capture and use data more effectively and get an even deeper understanding of their markets.
This will enable them to provide innovative and imaginative solutions to their clients and give them opportunities to develop new ways of doing new things.
