AM Best published “Commercial Insurance Brokers – Disrupters Are Headed for You” written by John Rodgers, Yogesh Sheth, Andrew Solar, and Jordan Heichel looking at the role of digital in the future of the business-to-business insurance market.
“Uber shook up the transportation business and Airbnb stole market share from the lodging industry. Countless digital-first startups are entering established industries and taking over. And usually, they began with a capability and then applied it to change how a given industry operates. Uber started with an app, not a car. Airbnb started with a tenant looking for a place, not the property itself. As the digital age matures, some of the most antiquated, complex industries have been flipped upside down by players that never existed until a few years ago. Viewed from the other side, these industries were disrupted from the outside, seemingly from out of nowhere. The lesson is that legacy industries need to take a fresh look at their business models and be the ones to disrupt themselves.
This trend toward disruption will continue as the tech generation grows up. As baby boomers exit the workforce and the millennial generation develops a larger influence, there will be an exponential demand for speed, efficiency, and simplicity. Those three words have never exactly described the insurance brokerage industry. However, those insurance players that focus on this shift have a chance to emerge as the winners of a new, tech-enabled future. How should an insurer play to win in this scenario? What business model changes are required?
The commercial (business-to-business) insurance brokerage space is ripe for disruption, unless legacy brokerages can get there first. The current industry is inefficient, labor intensive, and digitally immature—but does it have to be? If you had to build a new commercial brokerage firm, would you invest in a technology platform or recruit high-paid brokers to gain market share? How valuable is the broker-client relationship? Commercial insurance brokers need to ask themselves whether they want to disrupt or be disrupted. By investing in digital transformation, incumbents can become more agile, fend off new entrants and disrupt the disruptors.”
Read the full article here.
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