The challenges and benefits of using tech and digital tools in broking

Do you believe that many brokers are intimidated by the idea of becoming a digital broker?

Michael: I do believe there is some apprehension in understanding the technology. Is it worth the size of investment for small-to-medium-sized brokers for the potential reward?  And how soon will we see results?

It is difficult to measure the cost of not doing it.

Sarah: I think a point that is important to make is defining the link between digital and traditional.

How risk-averse are you? How many examples of successful digitalisation is needed before you are happy to go ahead with the transformation? Is it then too late, leaving you suffering from hesitancy as a result?

It is difficult to know when the right time is to jump into the market or not.

Selim: There tends to be a lack of definition when it comes to discussing what being a digital broker does entail. Brokers such as JCB Insurance have already become digital to a certain degree.

It really comes back to the problems you are trying to solve and achieve by using this new digitalised technology. Is it consumer focused? Saving volume? Saving cost?

It can be intimidating, because people do say ‘You have to go digital’.

Simon: I think the reason why its threatening is because everybody is aware of technological change and its impact. The reason for this is people have tried to achieve this in one massive leap. There are those who are going to become fully digital.

It is more about how customers want to interact with you and the omnichannel you are going to have to offer. People will want different parts in their journeys to offer different platforms and channels.

A general rule of thumb is: if something is going to take longer than three months to complete with any risk of losing business, don’t do it.

Simon Badley, group CEO, Open GI

Simply Business is known as a digital broker already, what do you think are the three key things you do that make you a truly digital broker with good grasp of what technology and tools to use?

James: One of the key things we do is appreciate technology and its tools. We are lucky to have in-house specialists who can work on and provide technology. Every year, we do hundreds of small-scale tests and trials− most of which fail.

We measure small-scale experiments to see if they work, if not, can anything be changed? We try to break everything down into small iterations so that we can learn from them.

The second reason is tied to data; using data to shape your technology.

We cannot know initially whether each claim will fit into the 80% of cases that can be managed online, so this is where we need someone to go and look at them to determine whether we can manage this risk and get it through.

By figuring out all the components of the job, we can then make the decision as to whether the case needs to be dealt with it in a personally, by sending it to the underwriter, or whether there is a system that can be used to take care of this part of the business in a more efficient, digital manner.

Technology shouldn’t be implemented just for the sake of it; it needs to solve a problem within the business.

Selim: People are not necessarily becoming digital by starting with cost, volume efficiency problems in mind. They enter the market saying, “We’ve got a platform, here is some technology, here is the digital; do the digital.”

It’s important to break down those specific problems and ask: how can we solve these issues?

Simon: Historically, the insurance sector has been poorly served by technology.

It has not been architected to enable us to work in the way we need to in the future. With any broker business that I speak with, they expect technology to be constructed in a way that makes the most sense to the problem.

A general rule of thumb is: if something is going to take longer than three months to complete with any risk of losing business, don’t do it.

What are the key problems these brokers are trying to solve, and what technology you guys think would be the best tools for them to use?

Sarah: Brokers face several challenges. Which opportunity do they start with? And what data do they need? Many start-ups spend a lot of money building warehouses and investing into that side of the business, but the question remains: where is their roadmap?

It is much easier to say digital change is “too hard”, “too risky” and “too much”, and remain averse to change because that is what insurance has always been, which is why it has been ripe for new entrants coming in with a digital mindset.

So, who will help them by leading them to the best approach? It is a minefield ready with a multitude of things that can go wrong.

Toby: How many instances have there been where project managers approach us with solutions, convincing us of their offerings and potential, only to have them move onto the next project without ever having delivered even a tenth of what they initially promised.

That is the problem; you can be lead down a rabbit hole very quickly.

Simon: Many aren’t clear of what they want to become and what problem they are trying to solve at first instance.

Anyone can buy technology. The trick is to buy the right technology, organise it, and integrate it in a way that fixes these problems.

I believe the biggest reason why digital programmes fail is due to the data. You need to architect it in such a way that you get all the efficiencies from the digital workflow presented back into the solution. I think the truest test of partnerships in the digital partnership space is your vendor turning around and saying, “Actually, we are not the answer to this problem, but we could help these guys…”.

There may come a moment of ‘digital dark period’ where new technology goes down for some time. If we are building completely around digital, many processes could falter should such an event happen in the future.

Toby Clegg, CEO, Clegg Gifford

What are your [broker] customers asking for from you in terms of the digital tools they want you to be offering them. Are there any trends or themes that you see?

Michael: What is interesting about this question is the conundrum: what do we give them?

We must give them something that we think they will find useful in the hopes they will go “this is brilliant” and adopt it without issue. That’s the real struggle for us.

It is all about how we can service them more efficiently digitally rather than attracting them.

James: I’d say that even as a digital broker, our customers aren’t asking us for anything. They just want their journey to be simple and quick− and they probably want choice. They want to know that you have worked hard as a broker and are not just getting the easiest solution.

Sarah: Having ways in which customers can go to get instant access is something that comes up often. They may not specify that’s what they want in terms of a particular portal, per-se, but there is a demand to give customers access without having to wait for it. It’s all about speed.

Toby: The majority of the time, customers do not really care about getting the best policy. They don’t get emotionally involved in the process as customers view policies as one of many transactions – like with banking. If it is easy and time efficient, they will use digital portals, whereas if it is something like adding employees to a policy, many customers prefer to call to reduce the amount of mundane work.

There are a few hoops people need to jump through to become truly digital, but one topic we haven’t touched on yet is around the risks of digital. What are the key concerns for the brokers when they do move to operate more digitally?

Toby: There may come a moment of ‘digital dark period’ where new technology goes down for some time. If we are building completely around digital, many processes could falter should such an event happen in the future.

James: One of the myths about going digital is relying on systems to do the job for you. You need someone constantly monitoring them, making sure they behave the way you expect.

You still need to manage the technology to ensure it is up to date. If you have customers that go into an auto-renewal journey, most of the time you’re not engaging with them when they come through.

Sometimes that is not the right thing for the customer. There are problems that could be solved by having personal conversations with them and using open questions to tease the right information from them. I think that over-reliance on tech presents a reputational risk for us as a business and for the industry.

Sarah: Another risk is internal adoption of the systems you are buying. You need have all your team on board and using the system once it is in place and making the most of it; otherwise, it’s a failed investment and it will not deliver what it was intended to. If the business is changing, the whole company’s ethos and culture must change also to adopt those new aspects otherwise it will fail from the beginning before the tool even gets in place.

You need have all your team on board and using the system once it is in place and making the most of it; otherwise, it’s a failed investment and it will not deliver what it was intended to.

Sarah Dackombe, marketing director, Kingfisher Insurance

Are the now some risks around holding additional data that perhaps you might not have held before? I know the broker space has always held a lot of data, but with those digital forms and things is there more and more coming in and perhaps more risk of it being stolen?

Simon: There’s too much data being held today. If you cannot organise your data in a particularly efficient manner, you end up collecting too much. We now have the opportunity, with newer technology, to refine that data capture and to only capture what is really needed. It takes discipline; the discipline in the way you design the process.

There is one thing around this table that is really heartening from a broker perspective; it’s that insurers are the ones driving forward the more granular data being required and recorded.

Selim: The strong message we get from all our customers around the world is that more data, analytics, and confidence at a granular level is going to produce the results, mainly through data.

Machine learning, neutral networks and artificial intelligence are key pieces of digital tech that have brought us the most value. It’s a good way to monitor behavioural change in respect to automated claims.

What do you think are the key pieces of digital tech that you’re using that have brought - give you back the most value?

Sarah: Tracking online journeys and constantly optimising them is a big win for us. It’s about constantly having an eye once it is complete and then continually improving it. So, we’re getting in tools to constantly monitor the customer journey and the customer experience, and then looking to tweak and hone it all the time.

Michael: Ours is just different communication methods. Live chat was so cheap in terms of return on investment. It opens a huge communication channel for the business so that’s a really, basic one. Another is having the ability for a customer to get a quote online; it’s got a strong conversion - and should have strong conversion because the customer has obviously got the need at that time.

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