Canadian Underwriter

Going digital

February 22, 2017   by Michael McKiernan

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Sherif Gemayel prides himself as a twenty-first-century broker.

But the president of Calgary-based Sharp Insurance wasn’t always on the cutting edge when it comes to technology. In fact, he launched his career in the business in 2009 with a decidedly twentieth-century piece of equipment: the phone.

On a visit to see an old friend who worked as an insurance broker, Gemayel cold-called a potential client in a sort of sales experiment.

“I got him a meeting and, two months later, he got the policy. It was the biggest one he ever got,” Gemayel says.

Pretty soon, Gemayel had ditched his burgeoning sales career in oil and gas, switching industries with a mission to change the way insurance brokerages do business.

“The way they seemed to get new business was to wait for the phone to ring. As a sales guy, I just didn’t understand that approach,” he says.

Gemayel quickly put technology at the heart of his operation, calculating that a digital approach would help to boost sales and generate new business. First came a website: “I figured, since I search for everything on Google, probably a lot of other people do that too,” he says.

Nearly eight years later, the digital play seems to have paid off, with Sharp among the fastest-growing brokerages in the country. Gemayel says customers love their innovations, which include online quotes and change requests, as well as a mobile app that gives them around-the-clock access to pink cards, payment information and policy details.

“They are wowed. It’s a unique experience for clients, compared with many of our competitors. If you’re pulled over and you don’t have your most up-todate pink card, now you can carry it in your phone or we can text it to you instantly,” he says. “We’re always looking to add new features. Everything the banks have done for mobile banking is what we want to do for insurance.”

Digital or die

At Aviva Canada, executive vice-president Jason Storah worries that brokerages like Sharp are the exception, rather than the rule. Having bet on brokers as its major distribution force, Aviva wants to see them living up to consumer expectations for their digital capabilities, expectations, Storah says, have been heightened by exposure to technological developments in other areas of their lives.

“When you go to Starbucks and pick up the coffee that you paid for on your phone without waiting in line, you want a similar experience for your insurance,” Storah says. “People want to be able to selfserve online by making changes to policies, or altering their payment information, or whatever else. In fact, they expect to be able to do that, but very few brokers are offering them that ability.”

“That’s troubling for us, but, at the same time, there are massive opportunities for the ones that are investing,” Storah says.

The percentage of brokerages across Canada that don’t have a website.

Source: CSIO 2016 Technology Scorecard survey

The percentage of Canadian CEOs concerned they are not “leveraging digital means to connect with customers as effectively as possible.”

Source: KPMG 2016 Canadian CEO Outlook

However, it won’t be long until a digital transformation crosses the line from being an attractive feature of a brokerage to a requirement vital to survival, he suggests. Any broker who doesn’t aspire to import some of the digital features from other industries into their business needs to ask themselves “some serious questions” about their long-term viability.

“Some just want to keep the business running as usual until they can sell and retire, but the vast majority of brokers don’t fit into that bracket,” Storah says.

Research by the Centre for Study of Insurance Operations (CSIO) shows how much work remains for some brokerages. One of the centre’s aims is to take the paper out of the equation when brokers issue new business, and it views the key features of a digital brokerage as: an online presence, a mobilefriendly website and e-signature software adoption.

In its 2016 survey, the CSIO found 11 per cent of broker respondents still don’t have any kind of website, although that did represent an improvement over 2015, when almost a fifth of brokerages surveyed admitted having no online presence. Of those with a website, only around half had a mobile version that works on smart phones and tablets. Meanwhile, just five per cent use, e-signature software, and only 60 out of around 2,200 surveyed brokerages scored top marks on the CSIO’s technology scorecard.

“Traditional methods of purchasing insurance, where people do it over the phone or face-to-face with a broker, are decreasing year over year,” says Catherine Smola, the president and CEO of the CSIO.

“Brokerages that are growing are the ones who respond to consumer demands to self-serve digitally.”

An omni-channel approach

Gemayel says it’s easy for brokers to let concerns about money and effort put off the push towards digital, but urges them to rip off that particular Band-Aid as soon as possible.

“There’s never an ideal time to start,” he says. “My advice is to take it in baby steps; find out from other brokers and insurance companies what some of the best practices are, and then go with them. There’s no need to reinvent the wheel.”

It won’t be long until a digital transformation crosses the line from being an attractive feature of a brokerage to a requirement vital to survival.”

Gemayel licenses Sharp’s mobile app to other brokers so that their customers can take advantage of the same features, while the CSIO provides educational tools to guide members through the early stages of the digital transition. According to Smola, an e-signature service can quickly pay for itself, since many adopters report a huge boost in close ratios once customers are able to immediately confirm policies.

Behzad Salehoun is the co-founder of BrokerLift Inc., a service that allows brokers to sell certain insurance products around the clock as a relatively simple add-on to an existing website. He says embracing e-commerce platforms such as his doesn’t have to mean abandoning more traditional approaches to insurance brokering.

“It allows them the flexibility to dip their toes in the water,” Salehoun says. “This is part of the evolution of the broker channel into an omni-channel approach. Just because you’re catering to consumers via the Internet, it doesn’t mean you close the store on Main Street. If customers want to call in and meet a broker in person, they should be able to do that. But if someone wants to buy a product at 4 a.m. from their bed, they should be able to do that too.”

According to Salehoun, technological advances have helped improve the user experience for the underserved population of Canadians who want to purchase and manage insurance products online, while bringing down the cost of going digital for brokers.

“There are a lot of consultants and insurers out there with some really great tools and expertise. For brokers, I think it’s more a question of will than one of funds when it comes to going through this type of transformation,” he says. “They have to make it a strategic priority for 2017 and beyond.”

Insurers there to help

At Aviva, Storah has put together a digital support team containing more than 50 people on hand to help brokers motivated to change.

“We see a massive spectrum of awareness and capability, so it can be as basic as helping them start a web page. We also help them optimize their social media presence or transition from a paper-based marketing campaign to a web-based one,” he says.

Travelers provides a free library of written, video and infographic content for brokers’ use on their own websites and in social media posts.

“We recognize that many brokers simply aren’t staffed to do things like daily blogs, posts and video production, so we do the heavy lifting,” writes spokesperson Shelagh Paul in a statement. “We see the digital space as an opportunity for brokers to demonstrate that they are a trusted advisor: to put their knowledge and expertise online, where customers expect to find it, and in formats they will find engaging.”

For brokers at the more advanced end of the spectrum, Aviva runs hackathons designed to turn innovative ideas from participants into working prototypes.

“They are setting an example for the rest of the pack,” Storah says. “The amazing thing for brokers is technology has really levelled the playing field between brokers and directs. The traditional broker channel has been declining in recent years, but our best digital brokers are bringing customers back from the directs and outperforming all other channels because of the way they engage with them. Digitization means you can focus on the real value-added aspect of the customer relationship, rather than administrative contact.”

Reaping the benefits

When Adam Mitchell, the president of Mitchell & Whale Insurance Brokers, took over the family-owned firm in 2008, there was just one broker and a receptionist on the payroll. Determined to launch a digital transformation at the Whitby, Ont.-based company, he says starting again virtually from scratch proved a double-edged sword.

“On the one hand, we had no leg up,” he says. “But the upside was that, once we had some momentum, there were no legacy problems. Everyone at the firm was handpicked and groomed for the journey.”

In the meantime, the business has grown exponentially and, most recently, Mitchell has partnered with a developer to create a chatbot on the firm’s website that can interact with customers and take orders without the need for human monitoring, freeing up employees to work on other areas of the business.

“We’re always looking for new ways to take strangers online, and turn them into clients,” he says.

Salehoun says insurance providers in niche insurance markets have the most to gain from developing online marketing and sales ability. Paraphrasing legendary entrepreneur Peter Thiel, the PayPal co-founder and early Facebook investor, Salehoun says the aim should be to “find a market that’s big enough to be interesting and small enough to monopolize.”

Danish Yusuf, the founder of Zensurance, believes he has found his: focusing on small business commercial insurance. He says the area was ripe for disruption due to the prevalence of bloated commissions and excessive paperwork, and Yusuf has just raised $1 million in financing to grow the business and start dispensing quotes and policies online.

“People have been waiting for this for a long time. Brokers are calling me all the time because they know this is the future of small commercial insurance,” Yusuf says. “We believe the broker model is the right one. It’s here to stay, even if the work will change.”

Copyright © 2017 Transcontinental Media G.P. This article first appeared in the January/February 2017 edition of Canadian Insurance Top Broker magazine

This story was originally published by Canadian Insurance Top Broker.