Wartime CEO: An Insurance leader’s perspective on an industry at risk as a result of COVID-19

More change occurred to the insurance industry in 2020 than in the previous several years combined, and the pace of change is only accelerating in 2021.

The final cost of the losses from Covid-19 continues to hang over the sector, and the effects of the pandemic will be felt by the industry and its customers well into 2021, as businesses continue to face significant economic challenges.

Businesses expect their insurance brokers to have a greater understanding of their individualised needs in light of shifting behaviours and preferences. They also insurance brokers to accelerate digitisation and strengthen engagement. 

As one industry commentator recently said when talking about digital transformation in insurance “COVID-19 pushed the need for nascent, innovative digital solutions and services to the forefront of standard insurance industry operation,”

How commercial brokers ride the wave of change and how the insurance broker business model evolves are what will matter most during 2021 and beyond. Artesian talked to Anthony Gruppo, CEO of Marsh Commercial to examine how commercial insurance broking organisations must adapt.  Here’s what we found out:

Adapting to a hybrid model and digitally mobilising the insurance workforce

According to an Artesian survey conducted in 2020, 95% of insurance brokers express a desire for increased flexibility to work from home post-COVID-19.

The industry has been plagued by the suggestion that it has been slow to adapt. However, Anthony explained that insurance organisations (even the big ones) can, despite reports to the contrary, be lightning-fast to respond when they galvanise.

Many companies, brokers included, have been using hybrid remote and flexible working models for some time.

Going into an enforced lockdown accelerated the development of this working model. Whilst brokers may have initially found enforced home working quite difficult, many have now gotten used to it and, with the right tools in place, have shown that their productivity hasn’t changed.

So, will brokers continue on this route to flexibility?

Anthony believes they can, but that to rise to the challenge of ‘working from anywhere’, brokers must be task-oriented, and insurance businesses must ensure that their mission and values remain intact. Digitising the workforce is key – brokers need a platform that enables them to grow and act with speed and efficiency.

Proactive rather than reactive client engagement must be the ‘new normal’ for insurance brokers

According to an Artesian’s poll, 45% of respondents agreed that the biggest challenge facing the insurance industry is how to help clients effectively during the current economic uncertainty.

Another 22% suggested that the biggest challenge for brokers is reacting deeper and faster to changes in coverage offered to commercial clients.

Anthony believes that brokers must prioritise their focus on how to make the industry better, that they must work together to strengthen the industry as a whole, and regain trust. When explaining exactly how insurance brokers must change, Anthony explained that their approach must shift from transactional to consultative – from proactive to reactive, as the paradigm shifts post-Coronavirus.

He says brokers must show acumen to strategically help clients and transfer their knowledge base. “New ideas don’t renew in August”, Anthony said.

Commercial insurance clients are now entering the renewals period, but they are doing so with fundamentally different exposures to those experienced the previous year, and it will be increasingly difficult for brokers to manage risk and long-term premiums.

Anthony advised that brokers must therefore replace old-world thinking, they must become strategists and tacticians, and above all else put themselves in a position to act with empathy and a deep understanding of every client’s needs.

Client intelligence will be vital to the new-world order agreed Anthony, explaining that technology leadership will open up competitive advantage and opportunity for brokers. By combining know-how with data science will allow brokers to respond to the changing needs of clients with more innovative underwriting and products, improve interactions with their client community, and provide new opportunities to redefine how they themselves operate.

Take underwriting for example.  The time has definitely come to make underwriting processes more efficient. It may be one of the best ways to build a sustainable, competitive advantage.  By combining everything an underwriter knows about its customer with the latest advances in data science they can automate and drive improvements in productivity and efficiency, whilst supercharging decision making and selecting risks more effectively.  The net result being improved customer experiences at a lower cost.

COVID-19 is shaping investment in customer experience-driven technology

56% of respondents to Artesian’s poll believe that it would take 2 plus years for the insurance industry to reach a stable ‘new normal’. They also unanimously agree that investment in technology will be key to the future of the broker model.

Insurance brokers that accelerate digitisation will be much better placed to accelerate out of the crisis and reach a stable ‘new normal’ faster than their peers.

The nature of the insurance renewal process means that traditionally brokers have had less frequent touchpoints or interactions with clients than seen in other sectors. This needs to change. Customer expectations require brokers to be continuously alive to changing needs and emerging risks throughout the lifecycle of a policy.

“The more futuristic brokers become, the more futuristic the results they will deliver to clients”, said Anthony.

It’s anticipated that insurance products will likely start to be sold through a digitally powered advice approach, echoing Anthony’s view that the industry must become more consultative.

As insurance brokers move from their initial response to a longer-term strategy, investing in tools that continuously monitor customer data and insight will lead to much greater levels of personalisation, and so change the customer experience and the broker value proposition.

About Marsh Commercial & Artesian Engage

Marsh Commercial is a leading insurance broking business with global backing and a local focus. Artesian Solutions has been supporting its proven and trusted experts with the AI-powered insights they need to deliver the flair, flexibility and personal service that Marsh’s clients expect.

Anthony Gruppo, CEO at Marsh Commercial is an author, podcast host, visionary leader, and motivational speaker with over 30 years experience of delivering organic growth. Anthony focuses on building invaluable client relationships via his ‘Six Degrees of Impact’ model. His consultative approach guides clients to uncover opportunities and create effective, profitable solutions.

Artesian ConnectTM combines leading advances in data science with a revolutionary way to harness the collective expertise which exists in an underwriting or broking team in the relation to know-how, also capturing existing business-rules, policies or regulatory requirements.

Artesian call this the Know-How Equation™.  Artesian ConnectTM combines everything an underwriter or 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 impactful insights and risk intelligence needed to deliver the ultimate in underwriting and broking acumen. Efficiency, efficacy and consistency.

Watch the interview with Anthony Gruppo below: