Brokerages that want to get ahead don’t need to look any further than one important tool: Data. And to ignore it means not only falling behind but falling off the map entirely, one expert warns.
To not just provide a better client experience but also improve the overall health and efficiency of the business, brokers need to be taking advantage of what data offers, according to Jeff Roy, CEO of Excalibur Insurance. But the right tools are also needed.
“We need to push our systems. We have to look at better platforms,” he told Canadian Underwriter, noting that a broker management system is not enough. “We need a platform that can handle data and all the touchpoints of the client journey, capture that data, analyze it and then help us make decisions. With AI and machine learning, these new systems of the future will make recommendations to our staff … That’s where the future is going.”
This is not a ‘flip a switch’ scenario. It will take time to get to a point where data is helping in most or all aspects of decision making, Roy advised. “There’s a bigger journey that needs to happen in the next one to three years but we’re going to need a big shift in that area to get more efficient as brokers provide better service to the client, reduce friction and increase customer satisfaction.”
Roy is a proponent of brokers getting on this right away. To delay could irreparably harm the industry, he warned. “If brokers don’t get on the horse and move technology to where it needs to go – and that includes developing platforms, enhancing artificial intelligence and the like – then they’re leaving the doors open for new entrants to eat their lunch.”
New entrants like insurtechs, which are technology driven and have the infrastructure in place to gather, analyze and use data, Roy said. “You used to be able to be a fast follower but that’s going to be more difficult in a data-driven world as things start shifting. So we need to make the shift. The good thing is brokers have a good chunk of the market in personal lines and we dominate in commercial. We got to make sure we don’t lose that.”
Today, at least, data can help find pain points in a brokerage. Roy gave an example that most brokerages face: Anecdotally, one may think that an insurer is costing the brokerage money because they take too long to respond to new business, they’re slow on claims or their endorsements might not be good. And there’s no easy way to quantify that. But if the right data-gathering structure is in place, then things change.
“This way, you can actually monetize it with data and prove how much a company is costing you,” Roy explained. “Imagine how the conversation will flip when they come to see you and you say, ‘Hey, my team is giving you a net promoter score of four because you’re taking four or five hours to do stuff other companies are doing in an hour. The cost of us doing business is now $30,000 more than dealing with XYZ Company. What are we going to do?’”
Suddenly, you’re having a different conversation, he added.
Roy praised efforts by the likes of the Insurance Brokers Association of Ontario to make data and connectivity a top issue for the industry but emphasized the need to have the process move along quickly – and not using the traditional insurance definition of speed. “We need to get some pep in the step on this.”