Time for brokers to leverage the benefits of the insurance ecosystem

Morné Stoltz, Head of MiWay Business Insurance

Smart brokers can have their cake and eat it if they adopt the ecosystem model that is set to redefine insurance

Brokers have been – and will continue to be – a key feature of many different sectors, especially insurance. The model offers entrepreneurial individuals an opportunity to customise their business in a way that works for them, outside the constraints of a nine-to-five corporate environment. For customers, a broker can become a trusted advisor, somebody who understands their needs and circumstances well enough to provide tailored advice.

For the large insurance companies, brokers represent an important channel to the market, a way of expanding their reach into a wider customer base.

In financial services, of late, independent brokers have come under increasing pressure. One reason for this is a growing tide of regulation aimed at enforcing fiscal hygiene and ethical business practices.

All of these moves to improve governance and protect customers are very much to be welcomed, but they complicate life for brokers, especially those in smaller firms. They increase overheads, may require extra staff to be hired and will inevitably mean that the broker has less time to devote to his or her core business objectives: speaking to customers and finding solutions for them.

In other words, we need to take care that efforts to protect customers do not have the unintended consequence of reducing the pool of brokers to serve them.

One promising solution lies in the growing influence of digital technologies in insurance. The industry is ideally suited to digitalisation because its products can be virtualised easily and there is no awkward transition from purchase in the virtual realm to delivery in the real.

Digital technologies are enabling the creation of ecosystems within insurance by providing platforms that enable small and large players to collaborate. These ecosystems will mutate as the participants explore new ideas and create new products or offerings. Any industry player would be part of many ecosystems, creating an overlapping landscape that is constantly shifting.

One important ecosystem will obviously be created around bigger insurance players. For example, MiWay has created a broker portal to allow brokers to create quotes using MiWay products easily, and with a great deal of flexibility in matching customer requirements. The partnership can possibly extend further in that MiWay’s broker call center completes the underwriting process, supplies the documentation to the client and then handles any subsequent administration, including retention and claims.

In this way, the broker effectively outsources much of the time-consuming back-office and compliance work to a partner.

A similar symbiosis could exist between a broker, an insurer and a car manufacturer, for example, to create a mutually reinforcing system of data exchange and even task sharing. Again, brokers could use this kind of technology to free themselves to focus on customer service and relationship-building.
Used intelligently, technology can help brokers create new niches for themselves in emerging insurance ecosystems and also eliminate many of the costs (in both time, money and attention) that stand in the way of their continued profitability.

MiWay is an Authorised Financial Services Provider (Licence no: 33970).