In the second part of the Insurance Business TV ‘M&A strategies‘ special, experts from across the insurance sector came together to discuss the impact of M&A on the insurance landscape.
Among the key questions asked was how consolidation impacts customers, with CEO of Premium Credit Limited Tara Waite highlighting the benefits that M&A can bring insureds. This perhaps wasn’t always the case, she said, as in the early years of M&A, sometimes the focus on customer experience post-integration wasn’t where it needed to be.
“But I think that’s an area where focus has really been intensified in recent years and it has really improved,” she said. “The technology investment is there and there’s just a much better experience. What we see a lot of is these companies really using their power post-acquisition to harness the best pricing for customers. They’re driving a hard bargain for customers which can only be a good thing.”
Mike Bruce, group CEO of Global Risk Partners (GRP), noted the tripartite relationship that sits at the heart of healthy M&A. When GRP does a deal it’s thinking about its customers, its insurers and its stakeholders, he said, an emphasis that has been in place since the early days of the group.
“The whole M&A space is very different to the 2000s, when I think some people would have to admit it was very much focused on margin, and maybe customer second,” he said. “The whole regulatory landscape has changed that. The whole focus on profitability from insurers has also changed that
“… Insurance broking seems to be the only sector where consolidation is seen as a bad thing. Consolidation, in the dictionary, actually means to bring disparate things together, combine them and make them better. And I think that’s what we do and what our peers in the M&A space do as well.”
As part of a wider group, a brokerage is able to deploy far more resources than a small broker can individually, Bruce said. It’s able to pivot more quickly to developing new products, and working with insurers to develop new propositions that are to the benefit of the customer whether that’s through investment in risk management, or claims capability, or data.
“I do think the model is very, very different now,” he said. “And I would actually ban the word ‘consolidation’ from the insurance broking space, because I think it has just got really negative connotations that are woefully out of date now.”
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