Canadian Underwriter

Special Report: How do you measure up?

March 24, 2016   by Jeff Pearce

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It’s fair to say that over the summer when Aviva announced its direct online platform, there was a significant amount of blowback over the move. The chatter at certain conferences was decidedly hostile, and some of those grumbles are still going on. Aviva could quote numbers—and did to us in June—about how 33 percent of insurance transactions were made directly in 2014, with 16 percent done through an agent. To which skeptics fired back in so many words, “Well, those are your figures, they would say that!”

So Aviva came to Rogers Media, the parent company of Top Broker, and our research team went off and crunched its own numbers. The results are so revelatory that we made the unprecedented decision to ask the insurer to let us report the findings as a proper news story. Because we think you ought to know.

It’s important to keep in mind the researchers are completely impartial. They look into everything for clients from what brand of toilet paper is popular to information on diseases you can’t pronounce. Good, bad, indifferent—they don’t have to care. So what did they find?

Read: Brokers and their customers, by the numbers

There is sometimes a wide gulf between how you see yourselves and how clients see you. For instance, there’s a clear disparity between how brokers view technology and how consumers think of it. Two-thirds of brokers—62 to 65 percent— think “customers will only use online self-service to browse for potential coverage needs.” Wrong. Nearly half of the consumer respondents in the survey say they “would feel comfortable and confident making an online insurance purchase.”

The good news is that some brokers are taking steps to cope with disruptive tech. The research team found that half of you—47 to 55 percent—say you’re already changing your business to accommodate new, emerging technologies. And more than a third of you say that you “see online self-service as an opportunity to succeed.”

As vice-president of Ontario Business Development at Aviva Canada, Ed Meiering works with more than 350 brokers across the province. He’s seen a lot of brokerages trying to do online startups, but in making them a separate brand, the startups need to hire different staff to work their leads rather than the traditional ones. The close ratio might be much lower than traditional referrals: around 20 percent. “So very often, what we hear seasoned brokers say when they try to implement those strategies together is that the culture change is really, really difficult for them. And so the next step is that they literally split it out and then have dedicated digital producers, and dedicated traditional producers.”

Read: Best practices for demonstrating your value to clients

Aviva offers a digital marketing consultancy as a resource to brokers. If one of them is redesigning their webpage, says Meiering, “instead of going to their neighbourhood person that might be really good at building webpages 10 years ago, we then meet with them to say, ‘You know, before you spend more money on building just a webpage that looks like a brochure, let’s really go through a digital discovery session with you, and we’ll discuss all the things that are important on your website—some quick wins, some more strategic.’” That even comes down to the minutiae of tags and heat maps. “So really getting brokers to think about, ‘What is the purpose that I wanted somebody to come here for? What’s the number one thing I want them to do next?’ And really, really highlighting that.”

Meiering points out that the traditional broker model is in many ways still highly profitable, “but it might be atrophying a little bit. But if [brokers] can get a new sales arm that starts up a new book of business with a different kind of customer base, that’s a great way to evolve—without throwing away the super profitable business that they have.”
Copyright © 2016 Transcontinental Media G.P. This article first appeared in the January 2016 edition of Canadian Insurance Top Broker magazine

This story was originally published by Canadian Insurance Top Broker.