In the ongoing battle for client access, brokers are failing to adopt a critical piece of industry knowledge, says one industry expert.
The concept of analytics and 'big data' has been transformative to the insurance industry, allowing carriers to gain a competitive advantage where once commoditization seemed like a real threat. However, one group is still failing to capitalize on this new technology — brokers.
That’s a problem, says Jenna Richardson, director of North American Insurance Services for Xchanging.
“Insurance is extremely data-driven — it generates 2.4 billion gigabytes per day,” Richardson told Insurance Business. “Carriers have really been digesting that information to make business decisions, evaluate claims and improve rating and pricing. Brokers, on the other hand, haven’t really been leveraging the data they’ve been collecting."
According to Richardson, failure to leverage big data capabilities may mean losing clients to carriers who sell direct and take the time to mine personal policyholder information for meaningful insights.
In other words, brokers may be losing the client 'turf war' to their carrier partners.
“That may ultimately affect the placement process,” she says. (continued.)
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While Richardson says the role of a broker as a transactional medium has not been threatened yet, she already sees these turf wars over client access playing out “from a very high level.” In fact, an insurance industry in the year 2034 without the broker role wouldn’t surprise her.
To prevent that possibility, Richardson says brokers need to be better about consuming and analyzing client data. As a typical first point of contact for clients, brokers are in a good position to leverage personal information to producer better pricing and increased and improved customer service.
“If I’m an insurance broker and I understand consumer behaviors, I can better communicate with them and with carriers to create programs and provide value back to my clients,” she explained. “The entire broker/carrier dynamic has shifted so considerably and will only continue to move in that direction. Brokers really need to get on board and understand this is the direction the industry is moving in, and figure out how to create value in their position in the marketplace.”
