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Brokers, as well as insurers, need to look to become living businesses to thrive in the future, according to an industry veteran.
A recent report from Accenture found that insurance firms could increase their worldwide revenue potential by as much as US$375bn within the next five years if they become so-called living businesses, and Ravi Malhotra, managing director of Accenture’s Insurance Strategy Practice for the Asia-Pacific region, said brokers need to develop their offering along a similar path.
“The broker’s role creates value for certain customer segments, but the threat of disintermediation by disruptive start-ups and other direct-to-customer offerings is real,” Malhotra told Insurance Business. “Those brokers that evolve as recommended in the ‘living business’ model will be positioned to gain share and participate more broadly in new propositions and offerings.”
The Accenture report said that living businesses are customer-centric, adopt fluid business models, flexible platforms and look beyond their core business to find new sources of value for customers and new avenues of engagement with customers.
Malhotra said that brokers, as well as insurers, should look to become living businesses in similar ways, by focusing on customers.
“As a customer-centric industry, insurance brokers must have a deep and constantly growing understanding of their customers, delivering meaningful, personalised propositions at the times that matter,” Malhotra said. “They must also relish change and value innovation, and have the energy to keep pace with their customers no matter how their needs evolve.”
Malhotra noted that it is important for living businesses to “thrive with multiple ecosystems” and brokers should look to this as a way to diversify their business, rather than focusing on what may have made them successful in years gone by.
“While it is important that brokers and other intermediaries identify and reinforce what is unique to them, in order to defend against competitors and other emerging rivals, they should also strive to become more open, receptive and collaborative,” Malhotra said.
