e-bookThe digital era is reshaping theinsurance industry- What isthe future of brokers?

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Contents

1. Digital transformation & insurancebrokers ..................................................................... 03

2. Digital disruption in insurance .......................... 10

3. Evolving insurance industry .............................. 14

4. For the insurers of tomorrow - Neutrinossolutions .................................................................. 16

5. References ............................................................ 18

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Digital transformation is changing theinsurance landscape today. Whether it’sprice comparison or direct propositions,consumers have access to just abouteverything with the click of a button. Thenew entrants and Insurtech startups arealso disrupting the traditional approach ofinsurers. Technology and quick accesshave had an impact on personal lines andintermediated distribution channels asvarious direct to-consumer channels haveopened up.

It is quite evident that the industry is nowin a difficult position, which demands theinsurers embark on a digital journey toachieve results, starting with sales andcustomer retention apart from goodcustomer engagement. There are no more“ifs” and “buts” when it comes to digitaltransformation rather it is all about“when” and “how”. The biggest challengeor opportunity [depends on how you lookat the situation] for all those in thebusiness of insurance is to build steps

and processes in place that will pave theway for a stable and sustainable future,one that also promises business growth.

So, how are insurers and brokers copingwith these changes? Is there a possibilityfor both insurers and brokers to capturemaximum value? Let’s find out in thiseBook.

Digital transformation & insurance brokers

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The future of digital insurance isbright and increasinglydetermined. Surveying thelandscape, a few interestingthemes emerge. Ecosystems, theInternet of Things, and ArtificialIntelligence will each play asignificant and interconnectedrole. Europe is already feeling theeffects of online aggregators,while commercial insurance isfacing a future in which itsplayers need to decide onwhether and how to partner withinsurtech companies.

81% of brokers expect supportfrom insurers around productcustomization.

Insurance beyond digital - Therise of ecosystems and platformsand society’s growing reliance ondigital technologies is not onlyreshaping customer expectations

but also redefining boundariesacross industries. Insurerscannot avoid this phenomenon:as traditional industry borders fallaway, the future of insurancestands to be greatly influencedby platforms and ecosystems.

An Ecosystem is aninterconnected set of servicesthat allows users to fulfill avariety of needs in one integratedexperience. Consumerecosystems tend to concentrateon needs such as travel,healthcare, and housing. B2Becosystems generally revolvearound a certain decisionmaker—for example, marketing-and-sales, operations,procurement, or financeprofessionals.

The future of brokers in insurance

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Customer engagementThe insurance enterprises arelooking to adopt newtechnologies and collaboratewith Fintech and Insurtechcompanies to offer better levelsof digital customer engagementplatforms. The new digitalchannels platforms typicallyprovide UI/UX based experiencethat allows the insurers to buildbetter relationships with theircustomers and offer wellinformed personalized productsuggestions as well. The mobile/web apps also facilitate newopportunities for up selling,cross selling and innovation innew products along withunderwriting opportunities.

Product innovationOnly those who innovate willsurvive the years to come! Thatis what the insurers are workingwith, creating in-houseinnovation centers where theycome up with new products,solutions to address customerpain points and understand themarkets better. Using NeutrinosLow Code is a good way aheadas it is easy to use with the dragand drop feature, plus theintegrated user-friendly UI/UXdesign facilitates incorporating alot more features into thesystem.

75% think innovation aroundproduct bundling could helpgrow their business.

Underwriting excellenceOne important functionality isunderwriting, which involvescreating digitally enabled andscalable customer experiences.This leads to revamping theexisting business models andcreating simpler and easierplatforms for better sales andcustomer engagement. Usinganalytics and RPA in areasinvolving data, insurers arelooking to bridge the gap andoffer superior underwritingservices. While traditional legacysystems act as a hurdle in thedigital transformation process,insurers are using the newtechnologies and analytics tooffer seamless processes withaccelerated underwritingservices.

Let’s start with the key focus areas:

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While the buzzword of the decade seems to be“cloud”, insurers are also seeing visible changeswith Artificial Intelligence [AI], Internet of Things[IOT] and Blockchain as well. Insurance has todaybecome a business of relationships, with focusshifting from products to customer experience.

It is essential for the insurers and brokers tofigure out the right balance between thepressures of the business and the technologiesavailable. Insurers/brokers/agents are seeingthemselves investing both time and effort intothese customer facing technology and automation

solutions in the coming years.

The top 3 aspects that will redefine the businessof insurance are,• Data analytics• New-age technology• Digital tools

So, the key lies in leveraging on these capabilitiesto deliver maximum value to customers. Beyondjust underwriting, these solutions enable betterrisk identification, claims management andcustomer relationships.

What powers this?

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Or difficult process with morethan 30 questions

Easy reporting onlineAnd off with fewer questions that adjust

dynamically to specific contexts

Continuous updates and trackingof process steps in messages

and online or in an app

Integrated remote digital solutionto help policyholders assess

damage, find repair shops, etc

Settlement of simple claims in 4 hours withdigital assessments

In processes suchas repair and payout

Limited help submittingclaims, finding repairshops,etc

More than 4 weeks to settlement

No online reporting Easy reporting online

Continuous updates and tracking

Integrated remote digital solution

4 hours

Lack of transparency

4 weeks

Limited help

FROMCumbersomecustomerjourney

TOInnovative &interactiveend-to-endexperience

Efficiency gains of up to 30% with digital self-servicing, straight-through processing, and lower call volume

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Insurer broker collaboration

Both, the insurers and brokers have their own unique strengths.While insurers have the power of finance, the ability to scale upand invest in new digital technologies; brokers have theadvantage of long-standing customer relationships and in-depth,quality data and insights on this front.

Going forward, to provide customers with superior experiencesand increased customer retention, collaboration betweeninsurers and brokers will play a big role in the industry. If bothparties leverage on their strengths, collaborate in new andinnovative ways, they can optimize the value chain and derivemutual benefit. The insurance industry, just like any other, isconstantly and rapidly changing. To stay relevant and ahead inthe market, both parties must work together to best servecustomers.

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Insurtech partnerships

Investment in InsurTech is growing, infact it is said to have tripled since2015. Today it stands at US$2.6billion.

Another aspect that cannot be ignoredis valuable partnerships that need tobe initiated by both the insurers andbrokers. InsurTech is more oftenrelated to service improvements forindividuals, as opposed to businesses.This is yet another new development inthe last few years that is transforminghow insurance companies approachthe business. They are primarilyfocussed on improving the overallefficiency and claims managementprocess. Most insurance companieslook at the insurtech as a way tomerge capabilities and offer enhancedservice to the customer, to stay aheadof their competition. They combinethese with the existing solutions andlook to offer seamless processes. Thebottom-line at all times is offering

improved customer experience whileoptimizing resources and spending. Astudy by McKinsey has predicted thatthe number of insurance employeesmight drop with these evolutions.

One thing to remember is that ratherthan seeking to transform commerciallines completely, most insurtechcompanies focus on enabling orextending the insurance value chain.The majority of commercial insurtechcompanies (63%) focus on enablingthe insurance value chain andpartnering with incumbents. Only asmall number of insurtech companies(9%) are attempting to disrupt theinsurance market fully.

Insurtechs are both friends and foes, raisingstrategic questions on competition andcollaboration

9%

63%

28%

Disrupt full value chain- Capturing valuefrom incumbents

Disintermediate customers- Enabling newchannels for incumbents but potentialpressure on margins

Enable value chain- Making a positiveimpact on incumbents’ top-line, indemnityand administration costs

09%

28%

63%

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Digital disruption in insurance

Going digital is no new concept, and it is here to stay.Traditional insurers are now pushing for adoption of newtechnologies, tools and solutions for better customerexperiences. What is the result of this industry disruption?

69% of commercial brokers see the market shift towardonline and direct as a major constraint to their growth.

Pricing transparency made reality through onlinecomparisons

Growth in direct to-consumer channels throughthe digital medium

The birth and growth of new InsurTechs

Value comparison websites

Peer-to-peer(P2P) insurance

Social brokers

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Artificial Intelligence (AI) and Robotic Process Automation(RPA) have had a significant impact on businesses.Enhanced operational efficiency, higher customersatisfaction, better data processing and optimization of cost,these technologies have had a positive impact on manyareas of business and have influenced emergence of newbusiness models.

Blockchain technology is providing secure datamanagement across multiple interfaces and fromunderwriting to claims processing, changing themanagement of business operations.

IoT & connected devices are improving customerexperiences, enhancing risk management and pricingthrough analysis of real time data.

Advanced big data analytics and social media analysis ishelping with better understanding of customer demands andrisk preferences.

The emergence of new technologies like telematics,wearables and connected homes is changing consumerpreferences and enterprise strategies.

01

02030405

Next up, among the manyavenues that digitaldisruption has opened up inthe market, we should look atthe technologies that aremaking this possible andseeing widespread adoptiontoday.

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The need for a new distribution model

More than 40% of brokerssee direct-to-consumerchannels as a significant ormajor threat to their business

Nearly 44% of brokersconsider their relationshipwith insurers to be of acollaborative nature.

The disruption in the marketis leaving brokers uncertainand worried about their role inthe value chain, as insurersare changing their strategies.Most of what the consumersees or experiences is basedon the distribution or thedelivery method adopted,which is usually through theinsurance broker. But with thechanges and evolution oftechnology, the new digitalsolutions offer betterdistribution channels and

solutions that are customerfocussed rather than product.So, what are some of thethings insurers can do toenable more responsiveness?[Ref image on the right]

Most of the new age digitalapps and digital disruptorslook towards offeringcustomers a betterexperience all through theirjourney. This goes beyondpurchase, it involves claimsprocessing and offering newopportunities for insurers/brokers as well. Starting withchanging the way they thinkto implementing solutions andreaching out to customers,every step of the waymatters. [Ref image below]

Simpler claims processes

Fewer forms/paperwork

Better management of claims

More effective communication with agent/broker

Faster turnaround and response time to claims

Give more authority to brokers on claims

More effective communication with customer

Better customer online tools

Hire dedicated and experienced staff for claims— no call center

Better agent/broker online tools

Better customer call center

Do not use offshore call centers for claims

Better agent/broker call center

Better staff training and education

Simpler products

Do not actively try to decline claims

Nothing

49%

27%

25%

22%

21%

20%

18%

17%

17%

13%

07%

07%

05%

05%

02%

02%

10%

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What’s important is for insurers to ensureintermediaries are reassured of theirimportance and are kept informed of thenew distribution strategies and futureplans. This will ensure a strongrelationship built on trust that willestablish a successful collaboration.

Brokers and insurers today have a lot ofdifference of opinions over theirrespective places in the value chain. For

effective functioning in the years to come,rationalization is much needed as thesystem is currently inefficient. Onlysuccessful collaboration betweeninsurers and intermediaries will ensuregrowth and industry relevance.

Intermediaries who do not feel valued (insurersvalue the intermediated channel as veryunimportant or unimportant)

Neutral

Intermediaries who feel valued (insurers valuethe intermediated channel as very important orimportant)Don’t understand

their fit intoinsurer’s strategy

Partly or fullyunderstand theirfit into insurer’s

strategy

52% 82%

12%06%

26%

22%

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Outside of insurance distribution, and withdigital transformation emerging across theentire value chain, there have been quitea few developments that are bound tohave an impact on how brokers operate infuture in the insurance space. All thismakes it clear that while the role ofbrokers is evolving along with the marketchanges, their presence is unlikely to die

out. To optimize customer experience,insurers and brokers must redefine thefuture value chain by working together.For better quality and improved costing,here are some of the areas that needfocus.

• Better understanding of the needs andviews of intermediaries

• Take this understanding intoconsideration during accountmanagement and broker segmentation

• Sophisticated and analysed brokermicrosegmentation

• Move beyond traditional products andfactors

Facilitating better communication between brokers and underwriters

Consistently work with the same underwriters

Allow more direct access to underwriters

Create service-level agreements (SLA) that limit turnaround time

Formalize or improve the process for appealing/reviewing a decision

Reduce the number of products that must be underwritten

Shift the underwriter’s role away from transaction-focus and toward arelationship-focused engineer of solutions for customers

87%

81%

80%

80%

77%

28%

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Evolving insurance industry

Consumers are far more literate than before and are demanding more - flexible prices,personalized offerings, better insights and customer recommendations. Conversationalinsurance has become a part of every insurance company today, with customers ruling theroost. Insurers & brokers need to jump onboard the concept of using data gathered fromseveral sources to understand the customer, identify their preferences and make wellinformed insurance recommendations.

Capitalizing on the investment capabilities of insurers and the customer information availablein the hands of intermediaries will ensure innovation at a new level that will benefit allmembers of the value chain. Elements that will play an important role will be automation anddigital tools:

Legacy systemmodernization

Business processautomation

Chatbots Customer relationshipmanagement solutions

Sales and operationmanagement tools

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The collaboration between brokers and insurers willplay a critical role in the transformation of theinsurance industry. The industry is being swept bywaves of disruption caused by emerging

technologies and this partnership, strategic businessprocesses and seamless communication will helpserve customers better.

Specialize in new andspecific market segments

Build closer andstronger relationshipswith insurers

Master the use oftechnology toenhance customerengagements

Improve riskmanagementcapabilities with dataanalytics

Demonstrate value throughtransparency and byproviding access toknowledge base

Supporting brokers with the right tools and automating daily tasks will enhance the entire process for all parties involved. So, whatdo brokers need to do to adapt and survive?

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For the insurers and brokers of tomorrow

TrendsCurrent trends in insurance broking are seeing a boost ininvestments in Artificial Intelligence (AI), automation and bigdata while increasing the use of mobile devices to accessand provide services to a greater number of customers.

Typical challengesReimagining their business to meet the surging wave of customerdemands for digital solutions, workflow efficiency, market volatilityand a constant state of uncertainty in the market are the keychallenges that Agents, Brokers and IFAs face.

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Neutrinos Solutions

A team that has years of hands-onexperience backed by low-code MXDP,Neutrinos is guiding leading enterprisesinto the next digital paradigm. From DigitalSales Distribution Suite to TechnologyServices, we have a full range ofsolutions designed exclusively for theinsurance vertical. Our solutions arebacked by in depth analysis done tounderstand the needs of insurers, brokersand customers.

By 2020, at least 5% of all new businessapplications will be created on either low-code or no-code application developmentplatforms. Similarly, by 2021, the marketdemand for app development will see agrowth of at least 5 times. [Gartner]

Neutrinos Low Code platform offerstechnology capabilities such as ArtificialIntelligence, Machine Learning, IoT, BigData & data analytics, Social Integrationsas part of the inbuilt functionalities. Theapps developed on this platform arecreated in a matter of hours. They alsointegrate app solutions across the web,mobile, social and IoT. Neutrinos platformalso makes it easy for insurancecompanies to migrate or upgrade fromtheir existing legacy systems to digitalsolutions.

Leading insurers have implemented ourinsurance solutions and transformed theirbusinesses. While there are severalelements that go into making digital

transformation a reality, bringing togetherin low-code development platforms, mobileapps, cloud services and the readiness ofthe insurers/others in the company to usethe advanced technologies to enablescaling opportunities in business is thecrux of it all.

Talk to us today

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https://www.neutrinos.co/

https://www.ey.com/Publication/vwLUAssets/ey-the-insurance-agent-of-the-future-australia/%24FILE/ey-the-insurance-agent-of-the-future-australia.pdf

https://www.elinext.com/industries/insurance/trends/how-does-insurtech-affect-insurance-brokers/

https://www.mckinsey.com/industries/financial-services/our-insights/time-for-insurance-companies-to-face-digital-reality

https://www.mckinsey.com/industries/financial-services/our-insights/the-growth-engine-superior-customer-experience-in-insurance

References:

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Neutrinos is a Multi-experience Development company that offers aplatform to ideate, transform, and build complex enterpriseapplications within days – or sometimes hours. Neutrinos isheadquartered in Singapore and has operations across South Africa,South East Asia, India, and the USA.

comms@neutrinos.co

www.neutrinos.co