Do you offer insurance for cyber risks as part of your portfolio? And do you give your customers the opportunity to take out luggage insurance on their smartphone as they enter the airport? Willem Standaert, a lecturer and postdoctoral researcher at Vlerick Business School, is an eminent source on the change that digitisation has brought about for brokers. He discusses the most important trends in the insurance world and the digital future of brokers.
Source: Vivium Digital Awards (29/04/2019)
What are interesting options for digitisation for brokers?
Willem Standaert: “Brokers find themselves in a unique position. A broker is a trusted advisor, who gives independent advice, and who has expertise in terms of risks and insurance products. As a result, he can offer any customer the best product for every specific situation.
In recent years, various InsurTech start-ups have tried to take over this unique customer relationship from brokers. But these companies have found it quite difficult to market their new products directly, as Belgian customers still prefer personal contact during certain stages of the process.
Then again, customers prefer a time-saving digital solution at other times. Customers are no longer inclined to drive to their broker for administrative matters. So brokers should consider striking the right balance between physical and digital contact, whereby the broker becomes an indispensable link in a hybrid story.
Start-ups can become a technology provider for the insurance market, e.g., by simplifying the back-office of brokers and insurers, facilitating the exchange of data or building a platform that other systems can plug into. As such, they contribute to an evolution from InsurTech to Tech for Insur.
The Vivum Digital Awards offer digital players and brokers an excellent opportunity to meet and discuss the options. We go in search of digital solutions, that provide support to the broker and can boost customer satisfaction and office efficiency.”
Which other digital trends will have an impact on brokers’ jobs in the near future?
“Insurers will become less visible in some areas. In some ways we are evolving to beyond insurance. In 1994, Bill Gates already said: ‘Banking is essential, banks are not’. He meant that while we will always need financial transactions, we will not necessarily need banks for this. We have also observed this trend in the insurance industry.
When you buy a car, certain brands offer you the option of taking out white label insurance. The customer has no idea who the insurer is. The car manufacturer partners with the cheapest insurer and will switch to an even cheaper insurer without the customer ever noticing.
Next to this, digital players have also paved the way for instant insurance. Leaving on a city trip? Now you can take out luggage insurance when you arrive at the airport. Imagine you just bought a new camera? You can then choose to insure the camera for the duration of your trip. A growing number of customers will take out insurance for certain risks on the spot.”
What impact does digital transformation have on the future of brokers?
“Digitisation has an impact on various aspects of the brokerage sector. On the one hand, brokers will radically change their approach because of new technologies. On the other hand, digitisation also creates new risks. Insurance policies are a reflection of our society. As the world becomes more complex, new and more complex insurance products will be created.
This includes insurance for cyber risks or insurance for risks associated with the sharing economy. A customer who wants to charge his electric car using power from his neighbour’s solar panels will look for an insurance policy that covers both parties if something goes wrong.
Finally, digital marketing will become part of every broker’s job, even though it is not necessarily one of his core competences. Some brokers have already voluntarily taken the step in the past few years. We have observed that a growing number of brokers have a website that is SEO-optimised and that they also have a social media presence. Others need support to make this transition.”
Imagine a broker has a good idea for digitisation but that he lacks the technical skills to develop it. What do you advise?
“Brokers shouldn’t worry about new technology. They should however ask themselves how they can embrace digitisation and continue to maintain their relevance as a broker. The combination of the physical and digital world can give rise to the best possible result, but also the worst possible one.
That is why it is vital that you actively think about the best possible outcome. Try to define your own strengths and ask yourself how you can combine them with new technology. Have a look at what others are doing in the neighbouring countries and in other industries, where the digital transformation is generally more advanced, on certain levels. That is how the best ideas come to the fore.”
What expertise does Vlerick Business School have in terms of digitisation?
“We are an academic business school. We conduct research to generate knowledge and expertise about digital innovation in all areas of business: marketing and HR, as well as the financial and the insurance sector. We put this academic knowledge into practice.
Our Masters students will, for example, develop the digital strategy of an insurer as part of a digital sprint. During a bootcamp, they can immerse themselves in such themes as digital transformation and FinTech. And we also practice what we preach: Vlerick is already digitising its own approach. Students can follow an online MBA or participate in the 'Take the lead' programme. This year we will be teaching 400 participants the ins and outs of digital transformation leadership."
Why does Vlerick Business School support the Vivium Digital Awards?
"We are stepping outside of the traditional walls of our school increasingly often. What we teach can be immediately implemented in a business environment. We also provide support for initiatives that may have an impact on businesses. The Vivum Digital Awards highlight digital innovation in the insurance industry and thus tie in with our mission. I’m curious about the inspiring ideas that brokers and tech companies will submit to improve the job of brokers as well as customer satisfaction.”