Technology is the not the be all and end all. While it might disrupt, it really is just a tool to get a task done, and brokers should not lose sight of that, said an industry head.
“When you look at innovation focused on digital and mobile revolution, it is very easy for you … to get caught up with the technology that surrounds the disruption and forget the profit objective,” explained Allan Reynolds, executive general manager Steadfast, at the 2016 NIBA Convention last week. But: “The reason why you are in business from the overall point of view is to build a successful business.”
“Because you’ve got an app does it make you an innovator. If you have an app and your competitor has an app – what’s new? what’s different?”
Instead focus on the client, Reynold said. “The whole challenge with disruption is: is it effective, efficient, is what you are doing being more effective in dealing with your clients?”
For example, he pointed to Flight Centre which is not competing by developing a better app or a better website, but building retail stores. It even advertises loss leaders. Why? “That’s to get the customer in the store and from there the advice component takes over.”
“Disruptors focus on the lowest common denominator – the simple, easy style of transaction. Flight Centre went for the other end of the sale – to concentrate on the high margin business that the digital disruptors don’t manage well.”
Similarly, he said Steadfast Direct is about “moms and dads and insurance” – and to “get the customer into the store”.
“We walked away from moms and dads, from home and car insurance. I find that quite interesting, since a home insurance policy … is one of the more complex products that are available in the marketplace. But we treat it as rats and mice, we are going to play at the bigger end of town the SME style clients because that’s where they really need our advice.
“We provide to brokers within the network … with a direct product, and also does is ability to upsell. This whole project has shown … 95 per cent of the policies that are sold aren’t the cheap as chips cover. As soon as you get the chance to talk to the customer, you can upsell them on what the value is.”
He concluded: “Maybe something’s new, are old things reinvented.
“Technology isn’t necessarily the answer, it is more so the enabler. Know your client, know your product. Match your clients’ needs to those products and just as importantly be in the space where your clients are.”