Last week we produced our 17th annual ‘Insurance-Canada Technology Conference – #ICTC2019‘ . As is our wont, we had one stream focused on insurers, and another targeting brokers. I spent the majority of my time managing the former, and my colleague, Doug Grant, took responsibility for the broker stream.
We got good marks, thank you. And the more we talked with colleagues, the more we were pleased with results. Towards the end of the day, I was chatting with a broker I knew, and mentioned my rosy glasses. The broker said, “Yes, but that’s because you had the good brokers here.”
When I got to my office, and pulled out some additional information, I was a bit surprised. There appears to be progress for brokers keeping up with new products, methods, and tools. However, it was no more than 25% of the brokers.
Morphing quicker than you think
In October 2018, Canadian Underwriter published its annual National Broker Survey. In its leading section, The Power of Broker Specialization, the highest level of agreement from participating brokers (88%) was: “Brokers need to become more specialized to withstand changing technology and sales models,” (emphasis supplied).
Disruption is ubiquitous. Other industry sectors are teaching consumers that digital can make consumers’ lives easier, better, and cheaper. Insurers and brokers will have to develop tools and platforms that will expand options and offer flexible insurance products “through a fully digital brokerage.” The investment is non-trivial, with “higher operating costs because of the technology required to run the business.”
Meanwhile, across the border …
We tend to look to the US for a variety of reasons, not the least of which is a much larger base and greater options for broker technology. It’s not completely clear as yet.
In Insurance-Business Canada on 27 Jun 2018, Alicja Grzadkowska gathered financial data from Applied Systems, one of the largest agency / broker technology supplier. The headline is “Broker adoption of digital technology is flat year-over-year.”
In a 2018 Digital Technology Adoption Benchmarks and Trends report from Applied. The average digital adoption rate for Applied Systems is 44%, the same as the previous year.
Michael Howe, Applied’s VP Product Management noted that utilization differs from different applications. In the US, Canada, and Ireland, Applied reports that 97% use the base management system.
Beyond that, however, utilization is spread out. Howe reports that 24% are offering mobile apps, and only 18% have self-service portals for clients.
Also, only 20% – one in five – utilize applications to receive data analytics from the data. This restricts deeper understanding.
Moving back home …
CSIO (Centre for Study of Insurance Operations) – a Canadian not-for-profit which researches and produces optimal broker and insurer business activities.
An external article on the CSIO website – entitled ‘Brokers Growing Strong with Technology’ – focused on the brokers’ adoption of digital technologies which allows greater servicing.
CSIO gathered the data and statistics in 2015 and 2016 to measure tech adoption in nine specific areas. With the exception of ‘Forms’, which has a 100% utilization, each areas had improvements from one basis point (esignature) to nineteen basis points (Mobile-Optimized Website).
In February 2018, CSIO announced recent improvements in the release of eDelivery solutions for digital electronic policy documents. At one year, 620 brokerages have taken to these improvements.
The progress of development is moving as well as possible. Uptake will depend on the regulators’ approval. However, regulators are learning the challenges, and values in improving response based in digital methods.
We’re not the only path …
Insurance-Canada is spending time and energy to help you – our client – understand challenges and opportunities in your role. At the same time, we are trying to understand how we can do better the digital way.
What are you doing with digital? Inquiring minds want to know.