Nearly 40% say the sector has not embraced innovation and 44% of brokers also don’t believe software houses have done enough to innovate.
Almost 40% of brokers believe that the broking sector has not embraced technology-based innovation well, Insurance Age can reveal.
According to a survey conducted by the British Insurance Brokers’ Association (Biba) 47% of respondents believe brokers are working well when it comes to innovation.
There was a similar divergence of opinions as to whether insurers have embraced innovation well. Some 51% of respondents stated that providers have embraced innovation well, against 42% taking the opposite view.
Software houses have long been looked to as potential tech leaders. However, only 37% of brokers believed these specialists had embraced it well, compared to 44% who said they had not.
Biba detailed that the survey aimed to understand respondents’ view of innovation and how the market has embraced tech-related innovation as well as suggestions as to how the industry could encourage more uptake.
A total of 160 companies, of which all but one were brokers, took part in the research behind the trade body’s InsurTech State of the Nation report.
Brokers further believed that technology could help them reduce general costs (24%), while 23% believed it could reduce office administration and 21% said it could enable better interaction with customers.
When asked about the barriers to the uptake of technologies, 77% of respondents highlighted that the cost of implementation was a main barrier, followed by software house development (62%).
Meanwhile 39% replied that a lack of awareness of options was a barrier, and 38% pointed to the disruption of changing business processes. Only 14% of brokers saw lack of interest as a barrier.
Biba explained that among other barriers brokers had highlighted the lack of portability of data between systems, being tied to one software house and a frustration that technology does not currently do what they need of it, despite significant cost.
The trade body also noted that three strong themes had emerged when brokers were asked what the industry could do more of to encourage technology-based innovation.
These were issues with software houses stifling innovation, more need for insurer/broker and industry collaboration and greater awareness to help make innovation more accessible.
In its analysis of the findings Biba stated: “Overall, there was real encouragement that roughly 10% of the Biba membership responded to a survey on innovation, showing that there is willingness for engagement when it comes to an incumbent broker audience.”
It further highlighted that there had been a good spread of engagement between small firms and large firms.
Biba head of corporate affairs Andy Thornley said: “In our 2017 Biba Manifesto, we made a commitment to support new InsurTech firms to enter insurance broking with advice and guidance, as well as supporting existing members in helping them to grasp new technologies.
“This is a crucial area for our sector. Whilst there may not be a big-bang moment where brokers will become disintermediated overnight, there may be persistent erosion of market share if collectively we do not embrace new, innovative ways of serving our customers and working more efficiently.”
Thornley added that this ties in with the theme of the 2018 Biba conference in Manchester - Innovate, Evolve, Thrive.
He continued: “Throughout the history of insurance, brokers have consistently innovated and will continue to do so.
“Biba will work to the benefit of members to ensure that they can take advantage of the opportunities technology-driven innovation provides, helping to mitigate the risk of disintermediation.”
Thornley concluded: “Through this work, we hope to inspire incumbents and foster partnerships which ensure that the sector continues to thrive in the future.”
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