The U.K.’s Chartered Insurance Institute’s (CII) Faculty of Insurance Broking, in conjunction with Oracle, the enterprise software company, has issued a new study – ” Opinion Leader Research: Broker and Insurer Relations in a Regulated World,” which “assesses the current state of play and looks at the current and evolutionary trends marking out the future of the industry.”
One of the CII’s “key findings” determined that, there is “a widening split in the broker sector between ‘traditionalists’ and ‘innovators.'” The split will “see competitive pressures intensify on those unwilling or unable to embrace change and look to the future.”
The “new broker,” said the CII, “will be more professional, focus on value, use technology as an enabler and take on the role as business continuity advisers, rather than mere insurance providers selling on price.”
The bulletin also notes that “the national brokers, together with some larger regional firms, appear to be evolving in this direction at a much greater rate, opening the prospect of a battle for business using contrasting approaches.”
Steve Wellard, CII communications director, noted that broking firms are at risk of losing ground if they do not embrace change: “There is a wide consensus that brokers need to change their offer and boost the value of what they do by increasing the advice and consultancy element. The larger firms have recognized this, but smaller ones are in danger of falling behind, which will make them vulnerable, especially as direct sellers increasingly encroach on their traditional hunting grounds of commercial lines to the SME market.”
The research also identified a widening split in the way in which regional and national brokers charge for their services. Nationals are much more in favor of full disclosure of fees and commissions, with 47 percent having already adopted this practice compared to 27 percent of regional brokers.
Chris Westwood, Head of Insurance, at Oracle UK, indicated that the market also needs to focus on technology and overcome its skepticism. “To compete in this increasingly competitive market, insurance companies and brokers need to innovate and be fleet of foot – and outdated legacy technology cannot be allowed to stand in the way. Using technology as an enabler will benefit the industry as a whole, with insurers becoming more efficient and brokers being able to service the needs of clients,” he stated.
“We are at a cross-roads. Regulation is clearly a major challenge, but it is those brokers and insurers who are focusing beyond this that are likely to emerge as winners, be that through their people, their infrastructure and the delivery of value,” Wellard added.
The report is available for free download on the organizations Website at: www.cii.co.uk.
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