Insurance in a Digital Age: Adapting to change

Redefining the role of the broker

Technology, data, cultural and behavioural change of the consumer is transforming the role of the broker – and the importance of advice – in South Africa’s intermediary insurance market.

Soul Abraham, Old Mutual Insure’s newly appointed Chief Executive for Retail Insurance examines the fascinating disruption of the intermediary market and its implications for dramatically improved customer service in the fourth industrial revolution.

Remote control

In today’s digital era customers expect instant and ubiquitous service and this is driving innovation within the global insurance industry. Insurers are leveraging technology and data to roll our previously undreamed off capabilities. These innovations are also redefining the broker’s capability to give advice to customers and significantly improve the customer experience.

Long before the COVID-19 lockdown, understanding the customers’ behaviour has been key to building the technology solutions and products of the future. Emerging customer culture is redefining the structure, priorities and capabilities of the insurance industry. COVID-19 has only increased the pressure – and urgency – for the industry to deploy technology and data to support customer challenges and goals – remotely.

Advice in the digital era

Changing customer needs and behaviours has led to a substantial part of the personal lines market shifting to direct insurers over the past decade. This trend speaks to the evolving expectations of customers over the last decade.

Millennials, for example, operate, and acquire assets very differently to previous generations. Younger customers today have a much more shared-economy and omnichannel mindset. These customers generally prefer to use a broad range of digital platforms to understand risk or research the cover they will need – even though they may, for example, still want to pick up a phone to ask questions or conclude the transaction.

From the perspective of the intermediary this means that insurers need to be able to make brokers relevant from an omnichannel perspective. In other words, millennials still need broker advice but require this in a differently accessible and digitally delivered format.

The availability of data today means that that the intermediated market can, today, be as data savvy and agile as other parts of the insurance sector.

Old Mutual Insure’s experience

Back office decision making at Old Mutual Insure, for example, has sped up dramatically over the years and most routine decisions have become data-driven and almost instant. Half of Old Mutual Insure’s Personal Lines broker transactions are now hosted on its digital platform where brokers manage their customers’ policies. Also, almost 50% of Old Mutual customers/brokers today register their own claims digitally. The next step in the journey will be to continue to evolve our processes as customer behaviour evolves.

Since insurance has always been an information game, those able to use the right data the most effectively will build a sustainable proposition.

The new data capability available to and through brokers is seeing a huge growth in commercial and agricultural small and medium enterprise portfolios. Since commercial cover is complex, advice is extremely important to business owners operating in today’s complex trading environments. The opportunity to serve and advise this much more tech-savvy segment through multi-media omnichannel, presents a huge opportunity to leverage broker insight into the risk industry’s collective service ecosystem.

Old Mutual Insure is doing all in its power to keep brokers on board and up to speed so that the role of the intermediary – and their vast knowledge, advice and client insight – remain integral to the greatly enhanced and much more interconnected risk ecosystem of the fourth industrial revolution.

Soul Abraham is Old Mutual Insure’s Chief Executive for Retail Insurance