Coming away from this year’s ORBiT Road Show session, the overarching message seemed to be: Ontario brokers have an enviable position with market share and have tools to improve profitability. However, too many brokers are doing little to sustain this in the face of changes in the market and new, powerful competitive forces.
Our question to you: Will brokers hear this 120 decibel wake up call?
The Good News
Bill Morris from Navicom opened the session with an overview of trends and directions. It was a balanced view, but contained a few nuggets that suggest that brokers should be well positioned to survive and thrive. After conducting a study of consumers, which showed all the changed in communications (social media,) and buying preferences (starting on-line), Morris noted that a majority of consumers indicated that relationships mattered in the purchase of insurance.
This is good news for brokers generally, and Ontario brokers specifically. Morris noted that in spite of a slide in market share, Ontario brokers’ market share is higher than brokered marketshare anywhere else in the world.
On the profitability side, ORBiT’s president, Wendy Watson, demonstrated that by working together, brokers could improve profitability by streamlining internal workflows and reducing external friction costs in dealing with insurers. For example, by adopting ORBiT recommendations in dealing with insurers (using technology to avoid using portals), brokers increased revenue per service person by 18%.
Further, ORBiT, in partnership with the Insurance Brokers Association of Ontario (IBAO) promoted the use of the CSIO eDocs Standards, making it the default for electronic communication of policy documents in less than a year.
But Nothing Lasts Forever
Morris referred to the broker model as ‘ageing’. Partly because of the demographics of the broker community, and partly as a result of brokers not adopting new tools and strategies. The result was that the greatest support for brokers comes from an older, non-urban segment, a shrinking population.
Watson noted that ORBiT continues to use its volunteers to develop standardized workflows that will improve efficiency. However, there were no new pilots to announce because, well, there were no new pilots. Further, while eDocs has be come the standard for electronic communication, Watson indicated that too few brokers have moved to using it to its full advantage.
And The Solution Is A Broker Problem
Virtually all of the presenters and many of the attendees noted that this is not a problem they expect carriers or vendors to solve. The consensus was that if the broker’s business partners were not stepping up to the plate to support the solutions required, it was the broker’s responsibility to influence the decision process, or make decisions on his/her own regarding the future of the relationship.
Will this all work?
ORBiT is a wonderful experiment in broker leadership. Watson notes that the organization represents 106 brokerages, employing 5,100 individuals, marketing $5 billion in premium. That’s clout. The question is can it truly influence enough brokers to take action independently and with their business partners.
Watson likes to quote Margaret Mead: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.” The group is indeed thoughtful and committed. Perhaps it has to be a little less small.
What are your thoughts? Can initiatives such as ORBiT use the advantage that Ontario brokers retain to sustain a turn around? What additional actions can it (or other broker groups) take?
We’d welcome your comments.