Insurance broking will have to fundamentally change its revenue model if it is to survive the upheaval from digital technology, the NIBA Convention has heard.
The Adelaide event brought together five of the most influential insurance figures in the country to discuss what broking would look like in 2024, with Steadfast Managing Director and CEO Robert Kelly, Austbrokers CEO Mark Searles, Aon Risk Solutions CEO Lambros Lambrou, Arthur J Gallagher Chief Executive Andrew Godden and NIBA CEO Dallas Booth taking to the stage.
Watch highlights of the Convention’s speakers above.
Lambrou says broking will have to look very different to survive.
“The frictional costs of doing business through the broker channel has to significantly reduce,” he says.
“The cost of engaging with the broker fraternity should instead come through the advocacy aspect. For me, relevance is advocacy.”
He warned that if brokers were not able to reduce their costs, then new capital and new players would enter the market, unencumbered by legacy issues.
Relevance was a key theme of the panel session, with Godden predicting that speed of service would be essential to continued relevance.
“It’s going to be about how quickly can we enable that whole value chain, from the broker through to the insurer and back again, to ensure that the customers are getting the knowledge when they want it, as fast as they want it,” he says.
Searles agreed, saying the consumers of the future will be time-poor.
“They will not have the time to become insurance experts and research risk services so it creates a real opportunity for the broker,” he says.
“The customer being time-poor is something we really need to exploit.
“If someone wants to know about liability, they’re not going to spend loads of time researching it. They’re going to go to a broker who is going to do it for them.”
Kelly urged brokers to do more than just sell insurance products.
“If we don’t continue to offer them valuable advice on the fact that there are different ways that risk can be placed and what the emerging risks are than Google will win,” he says.
Lambrou also highlighted the need for brokers to continue to broaden their offering to clients.
“When you look at insurance premiums as a proportion of GDP, it is going south, which means we are losing relevance. That is a huge concern,” he says.
“The wonderful opportunity that we have as an industry is that there are so many risks that business is concerned about that insurance is not responding too right now.
“I see that as a wake-up call. If we don’t respond to these opportunities then frankly I see no reason buyers wouldn’t start to question and commoditise what we do because we’re not making ourselves more relevant.
“Our role in life is to bring predictability to customers. We need to widen the palette of predictibality that we can bring to customers.”
However, Searles says brokers need to always remember the value of personal contact and relationships.
“If we underplay that too much, we make ourselves irrelevant,” he says.