Adapt or die, insurers told

The digital world poses an increasingly large threat to the traditional commercial insurance distribution models but the human touch of a broker will remain vital, according to a new report.

The Suncorp Insurance Insights white paper, The Changing Face of the Insurance Customer, states competitive pricing and product innovation can be quickly replicated by digital competitors, making customer trust of paramount importance.

“Customers see insurance companies as exactly that – companies – not a group of people,” the report states.

“Brokers and other intermediaries have the personal touch and build trust, which creates the halo effect for insurers.”

Suncorp Commercial CEO and paper author Anthony Day says the proliferation on insurance information online is a double-edged sword.

“On the one hand, a growing number of young, entrepreneurial SME owners are comfortable researching the internet and possibly buying their insurance cover,” he says.

“Yet, ironically, many realise from their research that they need help and turn to intermediaries.

“However, intermediaries need to adapt to the challenges of the digital world and demonstrate how the service they provide is vital to the operations of businesses customers.”

One of the major conclusions of the report is that insurers must diversify their distribution channels in line with customer demands.

“Demographics, changing lifestyles and buying preferences will see an even more splintered range of customers,” it states.

“The insurer who does not try to respond to this variety of customers will simply become irrelevant.”