02 May What is innovation? Members of the Broker Innovation Awards judging panel give their views
Members of the judging panel for the Broker Innovation Awards give their thoughts on where and how true innovation is happening within insurance brokerage
Steve White, chief executive of the British Insurance Brokers Association (BIBA) and chair of the Broker Innovation Awards judging panel
Innovation has forever been a function of insurance. Indeed, the product itself is an innovative solution to loss; the exchange and mutualisation of risk in return for a small fee allowed business around the globe to flourish. In recent years, technology has aided our industry, allowing quicker, more efficient transactions and giving us useful insights in to risks—allowing further innovation to take place.
It’s therefore obvious that insurtech, a portmanteau of technology and insurance, is something that all brokers should be taking an interest in.
There has been a recent acceleration in the suite of tools and solutions that are available to brokers to use to help them and their customers achieve better outcomes. While a swathe of new words have entered the lexicon, phrases such as AI, machine learning and blockchain, the question, to paraphrase JFK, is to ask not what you can do with technology, but to ask what technology can do for you.
By that I mean we must start with a problem that needs solving and then work to find a solution to solve that, rather than start from a point of ‘we must try and wedge some AI in to our business model’.
To help this, BIBA are shortly launching a service that brokers can use to help find insurtech solutions to problems that they face in their businesses. This might enable better customer interaction of greater profitability through efficiency. It’s part of a programme of work we’re doing to normailise technological innovation and help brokers reap the rewards.
Customer habits are changing and the race to stay relevant is as intense as ever. We’re determined to help brokers find all the tools they need to be able to do that.
We should start addressing this question by asking another: What is an insurance broker?
Insurance brokers come in many shapes and sizes. However, whatever the shape and size, we’re seeing a radical shift in the technology space. Digital capabilities are enabling all organisations to update their business models—including insurance brokers. Insurance brokers are increasingly recognising that they must harness the opportunities technology presents if they are to survive in modern times.
Technology presents opportunities to improve online capability, customer connectivity and contact, and the smarter collection and use of data through harnessing some of the impressive developments in back and front-office systems and their capabilities. This will open doors for the front runners in the insurance broker community.
Insurer innovation has concurrently also started to fly, which will support brokers to change more rapidly and effectively. As insurers turn their attention to customer-focused opportunities and augment their talent and technologies, collaborative opportunities with insurance brokers will emerge and develop. The key is converting these opportunities in partnership with customers who are increasingly themselves becoming open to change. When it works well, innovation will be to the benefit of all in the market—broker, insurer and customer.
It’s key that brokers are able to support clients in the way that they find most convenient and we are seeing really encouraging signs of technology being used by brokers to ensure these needs are being met.
In my book, nurturing innovation requires effort. Some people believe new ideas are an organic by-product of the business process. They’re not. Just take a look at the litany of firms that have passed into popular memory—Woolworths, Blockbuster, potentially Debenhams—because they failed to refresh their models. Innovation takes either determination or the prospect of imminent demise. The former is always preferable.
Today, no self-respecting firm of any size can be seen not to have a least one senior executive with ‘innovation’ in their job title. Talk of the fourth industrial revolution is constant. Yet how does that manifest itself in the broking sector? Because the goal is the same: to provide better, cheaper products for our clients.
In London, brokers are investing significant sums in technology research and development. The stories some LIIBA members tell me, especially about the ways in which they are restructuring their back offices using robots and AI, are staggering. As one put it to me: “My robot costs less than half of a person in India. It doesn’t eat, it doesn’t sleep and this time next year it will be twice as clever as it is now.” All of which means that insurtech is no longer the sole preserve of hipsters flocking near Old Street roundabout. Everyone is at it.
Innovation is manifesting itself in business process modernisation, in the use of new technology, in mobile technology, drones and apps—in fact in 100 different ways. But the one that really resonates with me is the change in attitude among brokers. Because we’re all innovators now.