Adoption of new technology and the use of data are crucial to the future of insurance, according to executives at the Council of Insurance Agents and Brokers (CIAB) Industry Leadership Forum (ILF).
Carriers and brokers are engaging in various initiatives to capture and apply risk and exposure data to their negotiations, and also to modernize the insurance transaction process to eliminate friction.
These projects are essential for the future health of the industry, according to Chris Treanor, president, Programs and Specialty Products at HUB International.
“As intermediaries, it is our job to stay ahead of our customer’s needs, so we can serve them better and approach carriers to build better solutions for them,” Treanor said. “Those that can capture, harness and understand data will ultimately be the winners and those that can’t will be the losers, in the long run.”
AJ Gallagher regional EVP Dan Tropp described the use of data as an “offensive weapon” for a broker to win business. “Using data, brokers can help clients drive a lower cost of coverage by giving the carrier a fact-based reason to price their risk competitively,” he said.
Commenting on the quest for efficiency in the insurance transaction process, Aon Benfield CEO Eric Andersen said: “There has long been a tug of war over the ‘cost of transportation or risk,’ from risk origination to risk assumption,” he said. “But now we are weaving the insurance technology angle and this is accelerating.”
From a reinsurer perspective, Swiss Re North America CEO Keith Wolfe said reinsurers could act as a “bridge” between new technology from outside the industry and the market itself—thus accelerating efficiency gains.
“Tech entrepreneurs bring some good ideas to the industry, but often they don’t know how to execute those ideas in our market” he said. “Swiss Re will act as a partner to help address the age-old problem of industry efficiency. Ultimately, a more efficient industry is better for everyone. Consumers want the best product at the best price and are conditioned to seek out the party that can offer that.”
However, in embracing this brave, new world of data and technology, brokers and carriers should not forget the power of relationships in insurance, executives have told Advisen.
“There is huge power in the data and the technology available to the market today, and the industry is ripe for modernization and streamlining. However, at the end of the day, an insurance contract is an act of faith—you need confidence in the person on the other side of the deal from you,” Zurich North America CEO Mike Foley told Advisen.
Aon’s co-head of broking, Rob Stein, concurred: “Technology is creating some great opportunities to transact peer-to-peer insurance, but the ‘trusted advisor’ relationship with your broker never goes away—particularly in the large risk space.”
“Large risk clients want to know that there is someone advocating for them and building relationships on their behalf in the marketplace. The CIAB ILF conference is a great example of this phenomenon,” Stein said.
Brokers and carriers are “rising on the tide” of data and technology partnerships, to the benefit of their clients, according to Mike Rice, JLT US Specialty CEO.
“Carriers are having responsible conversations around rates, to ensure products are viable for the long term. They have a better understanding of their portfolios, thanks to investments in data, and are able to make decisions faster,” Rice told Advisen. “When all parties use the data they have and work together to interpret it, the result is truly beneficial to the entire ecosystem.”
Rebecca Bole can be reached at rbole@advisen.com
