August 22, 2018 by Margaret Parent, Director, Professionals’ Division, the Insurance Institute of Canada
Brokerages are not immune to the two key forces that currently have an impact on Canada’s P&C insurance industry: technology-driven change and consumer-driven change.
Customer experience is becoming the key brand differentiator in a customer-service world where there is little differentiation in product or price. Consumers expect businesses to anticipate their needs and solve their problems, by providing an experience that includes:
Online price aggregators, increasingly, are enabling consumers to bypass traditional brokers in favour of web-based product and price comparisons, and robo-advisors are expected to automate insurance advice.
Brokers around the world are concerned that direct-to-consumer channels are eroding, or will erode, the value proposition of traditional brokers. Half of the Canadian insurance executives surveyed for the Insurance Institute of Canada’s 2017 executive survey envision a high degree of disruption in distribution/brokering over the coming five years. Interestingly, C-suite respondents were more likely to envision disruption in distribution/brokering than other respondents: they ranked distribution/brokering second only to information technology (IT) among the areas that would experience the most disruption going forward.
Brokers will need to reposition customers at the core of their business models to preserve their relevance and not be perceived as redundant. In the Insurance Institute’s emerging issues research report, Sharing Economy: Implications for the Insurance Industry in Canada, Rachel Botsman, a sharing economy expert, identifies “four characteristics of industries ripe for disruption: complex experiences, broken trusts, redundant intermediaries, and limited access.”
“It is unlikely that brokers will completely disappear,” writes Michael Burt, executive director, economics, at the Conference Board of Canada in the Insurance Institute’s forthcoming report, A Changing Workforce: Implications of Technological Disruption for the P&C insurance industry in Canada. “Instead, brokers will need to reassess their value proposition within the industry’s evolving value-chain. The extent of disruption facing brokers will depend on how they adapt to change.”
Adapting to consumer-driven change
Given their direct-to-consumer relationship, the broker of the future will need to simplify the insurance-buying experience for, and build relationships with, their clients.
Connecting with customers more frequently than has been the prevailing practice will be necessary. Connecting only when the policy is due for renewal or when a claim is made will, generally, not add value or build loyalty. These kinds of limited interactions with clients are a key reason why price shopping is so prevalent.
The key ingredient to greater customer centricity and the increasing digital engagement of consumers is customer service skills.
If traditional brokers can leverage their customer relationships to draw insights from customer data, they would be better positioned to implement strategies to improve service and product development, such as:
Superior customer service skills will be key to meeting these objectives. Not surprisingly, customer service skills are in high demand:
“As the industry’s distribution model becomes more oriented toward direct insurance, brokers must evolve to preserve their relevance within the industry’s value chain,” writes Burt. “For them, superior customer service skills will be central to achieving that objective.”
Brokerages will not only need to become more targeted in skills acquisition, but also foster lifelong learning opportunities to ensure the continuous skill development of their workforces.
These findings on in-demand skills for tomorrow’s workforce represent just some of the many findings to come from the Insurance Institute of Canada’s decade of demographic research study on the industry’s workforce. Two Institute reports, written by the Conference Board of Canada, are to be published in September 2018: Demographics of the P&C Insurance Industry in Canada and A Changing Workforce: Implications of Technological Disruption in the P&C Insurance Industry in Canada. More information is available at: www.insuranceinstitute.ca/research.
What Do Customer Service Reps Look Like Today?
From the Institute’s report on the demographics of the P&C insurance industry in Canada, we know that the typical personal lines customer service representative:
Copyright © 2018 Transcontinental Media G.P. This article first appeared in the August edition of Canadian Insurance Top Broker magazine
This story was originally published by Canadian Insurance Top Broker.