How brokers can harness data-driven know-how to minimise the impact of a hard insurance market

Covid-19 accelerated the hardening of the UK (and global) insurance market, a trend that was already emerging pre-pandemic. Insurer capacity is tougher to come by, competition is limited, premium rates are increasing, coverage is contracting, and insurers are being more selective with risks, and disinclined to negotiate terms. Similarly, underwriting standards have tightened significantly. It is estimated the combination of Covid-19 insurance claims, reduction in business, and investment losses will cost the worldwide industry in excess of £200 billion, making it the most expensive insurance event ever.

A perfect storm for commercial insurance brokers. Speaking of which, fires, floods and storms have also played their part in creating a market whereby demand for insurance is exceeding supply for the first time in 20 years.

What is a hard insurance market?

In the words of Artesian customer Marsh Commercial, a hard insurance market is characterised by a high demand for insurance coverage, and a reduced supply. A hard market will only soften when new capital is injected into the market ‒ this is usually done by new market entrants. However, these days it’s rare for new insurance companies to start up and get past all the regulation and security ratings, therefore don’t expect to see new capital entering for a long period of time.

Intelligent investment for hard market success

To maintain a competitive advantage during these challenging times, insurance brokers need to harness data and insight more than ever. It may seem counterintuitive to spend on new tools and technologies when business is tough, but think again…

It could be harnessing AI and machine learning automation to free up time for customer-facing activities whilst simultaneously improving accuracy and efficiency, improving prospecting, or surfacing unique insights for tailored service provision and relationship building. Or how about layering structured and unstructured data over customer and market know-how for improved risk selection and advanced underwriting submissions. Leveraging modern data and analytics tools and technologies is the best way for commercial insurance brokers to win in a hard market, and ensure they stay ahead when better days (soft market conditions) return.

Five ways insurance brokers can harness the know-how to succeed against hard insurance market conditions

New business development

Most businesses will have faced some of the biggest challenges ever experienced over the last 18 months, so they’ll be out there shopping for insurance. In a hard market, the differentiating factor isn’t just price, it’s also what brokers have to offer their clients – that all-important value proposition stuff. Harnessing structured and unstructured insights provides new opportunities to engage, establish credibility, and create new leads with well-timed, contextually relevant outreach that differentiates the broker from their competitors and increases their chances of securing that next meeting.

Engaging with purpose

Insurance brokers are always consultative, not transactional, but this is more important during a hard market. It’s about building stronger relationships, being purpose-led in interactions with clients, and being proactive in caring for, and ideally one step ahead of, their needs. Vitally, brokers must harness intelligence to ensure they are always relevant to the client landscape, aligned to needs, and deliver on that all-important long-term value factor.

Retention

Trust and credibility are king for insurance brokers operating in a hard market. It has never been more important for insurance brokers to establish themselves as a trusted advisor to their clients. A deep understanding of a customer’s businesses will ensure a broker is better able to help them navigate the impact of market conditions, anticipate their needs, evaluate their risk exposures and therefore present better submissions to underwriters.

Securing coverage

During hard insurance market conditions, it’s essential for brokers to prepare and present high-quality insurance submissions to an underwriter. It really is a case of the more information the better. Leveraging data-driven customer intelligence will make sure there are no knowledge gaps, and that the submission process is aligned to customer needs as well as the requirements of tougher risk-averse underwriting conditions.

Cultivate existing book of business

Operating in a hard market means being more efficient and keeping costs under control – doing more with less. The key to achieving this is for insurance brokers to generate more value from their existing book of business. Likewise, in a hard market clients will be expecting more from their broker. Upselling and cross-selling means that not only are policies per account more profitable, but it fosters a stronger sense of trust, establishing the broker as an advisor rather than simply a service provider. This in turn increases customer satisfaction and retention.

Harness Artesian’s advanced Know-How for hard market success

Artesian Connect™ combines leading advances in data science with a revolutionary way to harness the plethora of internal data, insight and experience that sits within a broker business and supercharge it with external data enrichment.

Artesian call this the Know-How Equation™. Artesian Connect™ combines everything an insurance broker knows about its customers, business and market, and leverages an advanced rules-engine that ingests millions of structured and unstructured data points to layer on top of that know-how, quickly delivering the impactful data and actionable insights needed to remain competitive in a hard insurance market.

Get in touch with one of our experts today.