Between economic uncertainty, geopolitical tensions and rapid technological advancement, the UK insurance broking industry is facing a myriad of interconnected challenges. However, for many brokers, the most pressing pain point impacting their businesses today is more of an internal consideration – how to win the war for talent.
Any broker in the market will freely tell you that the number one issue they have is recruiting and retaining young talent, according to Matt Hicks (pictured left), co-founder at Recorder. One of the main – and undiscussed – reasons for this is that brokers have been slow to adopt modern software, forcing frontline staff to stay using legacy IT systems and admin-heavy processes.
A lot of brokerages are still struggling to understand which pieces of their business are actually making them money, he said. Each of their brokers is juggling several different versions of manual broking and digital e-trading journeys with tons of re-keying on the backend. “This means when a new client opportunity comes in, it’s really hard for them to figure out how much each piece of business is really costing or making them, and if they’re giving the customer a journey that actually suits their needs.”
Hicks noted that brokers are also facing growing competition from digital challengers. There are a growing number of online brokers and MGAs that are giving customers more choice. If a small business needs insurance, he said, it is often for a specific reason i.e. it is a legal requirement or perhaps a large customer/supplier requires it.
In this scenario, he said, a business wants to be able to quickly research its options and purchase the policy with as little friction as possible.
A traditional approach to broking can be too slow in the fast-moving modern economy and brokers need to adapt. Identifying some of the factors shaping these concerns, Hicks noted that the internal concerns are all from frontline brokers, particularly younger brokers.
The gap in user experience between what they’re able to do on the phone in their pocket as compared to the clunky legacy software they have to deal with at work is just too great now, Hicks said, and they’re increasingly aware and looking for better options. Externally, there’s an even bigger gulf between what brokers believe is a great sales process and the dissatisfaction customers report.
“Most brokers still require a lengthy telephone conversation for the initial fact find, even for small customers,” he said. “There is almost no other professional service that operates in this way and if you ask an SME owner or FD, they report the lack of digital customer journey as their largest source of dissatisfaction with their insurance process.
“Meanwhile, there are a growing number of online options for small businesses. These providers no longer exclusively accommodate freelancers and micro businesses but are expanding their capability to support the more complex requirements of SMEs too, and the modern, digitally minded consumer is increasingly gravitating towards them.”
The simplest solutions are often the best and the most impactful. Giving customers a client portal to log in, access their policy documents and make MTAs is the single most effective step a broker can take to improve the efficiency of their business while giving the customer what they want.
Hicks added: “We’re also seeing more and more brokers move to dealing with tech-minded, service-oriented MGAs in place of the traditional composites, because they’ve thought deeply about the broker’s workflow and how they can help streamline that.
“The final piece, and we’re definitely going to see a lot more of this in the next few years, is the adoption of AI to take data out of PDFs and put it into structured workflows. A great example is what we call Smart Renewals – upload year’s prop form to an AI, it pulls out the data points that are likely to have changed and then presents those questions back to the customer for updating – it saves everyone a ton of time and the client is far less likely to ask another broker to get them some additional quotes.”
