The game is changing and the name of the game is no longer golf every other Wednesday. Sadly, if the approach does not change, all that will remain will be a business bogey.
In the ever-evolving insurance market, the establishment of strong and mutually beneficial relationships between insurers and their brokers should become the focus for continued success in the marketplace. At present, there seems to be some disconnect between the insurer and their brokers.
Ultimately the goal is shared, but both parties tend to operate in isolation. This is not because of bad service delivery or redundant products, but rather a breakdown of communication with each entity delivering to market by utilising their own individual approach.
Healthy business-to-business relationships in the insurance industry are of major importance
The industry is no longer serving a disinterested market of clients with choices being limited to one or two insurance companies which have a hold on the market, with policyholders not bothering where their insurance is placed as long as they have insurance. We are serving individual, unique clients who are commercially savvy and will happily go where they perceive they will get the best bang for their buck.
The regulatory changes that have been introduced will surely result in changes in fees and commissions payable; inevitably resulting in a reduction of brokers’ income streams. This will bring forth the time for insurers and their brokers to closely cooperate and turn their eyes to the common goal: communicating, strategising and adapting together to best serve this changing and dynamic market.
Communication is the cornerstone of any relationship. Better communication will not only bring improvement in the level of service delivery, it will also be the birthplace of new and revolutionary business procedures and products. Insurance providers will become more agile in their approach. By sharing data and information in all aspects of business, they will learn and grow together.
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Underwriting will become tailor-made for the client, rather than being delivered as a commodity.
This is already starting to emerge throughout the market by integrating innovative technologies into insurance policies, telematics being an example of this. However, this can only significantly benefit the business and the client if properly implemented by attention to detail, reporting accuracy, proper information and resource sharing.
Resource sharing will place both the insurers and their brokers in a strong strategic position in the market; the finger will be on the pulse of the client. Early awareness of the change in a client’s behaviour or needs will result in a more targeted approach and quicker turnaround time to adapt to any changes.
New market behaviour is imminent. There will be a paradigm shift from current market conditions and the way business is conducted. Business retention will be even more critical. For this to be achieved, broker functions and insurer functions should no longer be seen as being two separate concepts but rather forces to be joined.
Healthy business-to-business relationships in the insurance industry are of major importance and, if managed and maintained correctly, will have a ripple effect towards healthier client-to-business relationships.
It is time to exchange the tee box driver for a strategy-driven boardroom partnership. This will not only help us achieve business success but a greater share of the current as well as the emerging market. It will ensure that we reach areas of business and markets not yet explored.