Tuesday, March 8, 2016.
TSX Webinar: The Future
of The Insurance Broker
TSX Webinar Presenter
Ellen Carney Principal Analyst, Insurance eBusiness & Channel Strategy
The Future Of The Insurance
Broker: How Digital Is Reshaping
What And How They Sell
Ellen Carney
Principal Analyst, Insurance eBusiness & Channel
Strategy
A Webinar With the Centre for Study of Insurance Operations
Tuesday, March 8, 2016 2:00 pm – 3:00 pm ET
© 2015 Forrester Research, Inc. Reproduction Prohibited 5
We work with business and technology leaders to develop customer-obsessed strategies that drive growth.
© 2015 Forrester Research, Inc. Reproduction Prohibited 6
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In the digital age, is
the broker still
relevant?
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And if they are now,
will they remain so?
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To find out, we . . .
› Interviewed a group of 40 broker principals, carriers,
online brokers, industry association reps, consultants,
and technologists in North America and APAC.
› Surveyed 5,000 Canadians and 10,000 Americans about
perceptions of broker value, trust, and satisfaction in Q1
and Q2 (will be ongoing research) .
› Developed a first-ever Forrester Research independent
broker online survey panel covering the US (n=302,
depending on role; will be ongoing research).
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What did we learn?
Digitally-enabled distribution is
changing, not eliminating, the job of the
insurance broker.
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Agenda
› How is digital changing the job of the broker?
› What digital best practices should brokers watch?
› What does the future hold for the broker?
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Agenda
› How is digital changing the job of the broker?
› What digital best practices should brokers watch?
› What does the future hold for the broker?
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The broker is a key element in insurer omnichannel strategies
Broker
CRM
Online
Mobile
Social
Analytics
12.7
12.3
15.9
8.0
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“Thinking about your insurance policies, how likely
would you be to consider switching companies if:”
My broker recommended a different company
A family member or friend recommended another company
26%
19%
38%
30%
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31%
What percentage of brokers believe that their
customers trust the broker more than the insurer(s)
the that they represent?1
…but there’s an interesting perception gap
92%
How many consumers agree with the statement
that they trust their broker more than the insurer(s)
their broker works for?2
Sources: 1Forrester Research Independent Agent Panel Q3 2015; Base: 207 Independent Agency Professionals 2 Source: North American Consumer Technographics Financial Services Online Benchmark Recontact Survey, 2015: Base Online American 18-
88 with insurance
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Source: North American Consumer Technographics Financial Services Survey, 2015 (Canada)
Base: Canadian online adults 18+ (online weekly or more) who are insurance owners (~4,500)
15%
17%
21%
25%
38%
39%
44%
40%
46%
51%
56%
25%
27%
28%
30%
44%
45%
48%
48%
51%
57%
64%
I prefer online financial advice to in-person financial advice
The range of services offered through an insurer's mobile app or…
I am interested in being able to pay for goods and services with…
I feel secure making payments using my mobile phone
I tend to put my money with firms that make it easier to manage…
I always try to shop around for financial products
I am comfortable using digital channels to interact with my…
I always seek advice from experts before making investment…
I rely on financial advice from professionals
I am less reliant on bank branches today than in the past
I like to do my own research before making financial decisions
How strongly you agree or disagree with the following statements? (% agreeing or highly agreeing)
Use A Broker Don't Use Broker
Canadian who buy through brokers are more likely to want digital, too
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68%
58%
50% 52%
27% 24%
21%
69%
54% 54%
49%
26% 26% 22%
46%
54%
38% 40%
25% 21%
19%
Over thephone with alive person
By mail Online In person On a tablet Over thephone using
an automatedservice
On a mobilephone
How satisfied are you with each channel you use to interact with your insurance company(s)?
% Indicating satisfied
Home
Auto
Life
…and which may explain this
Source: North American Consumer Technographics Financial Services Online Benchmark Recontact Survey, 2015
Base: Online Adults 18+ (Online Weekly or More) Who Have Insurance
62%
70%
45%
% Working
With A
Broker
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When choosing an insurance provider, how important is it that the firm
you choose offer the following services? (% saying important or very important)
24 hour call center
Dedicated agent
Online access to my policies/accounts
A local agent in my community
Location near my home/work
Mobile access to my policies/accounts
60% 66%
65% 55%
39% 47%
58% 47%
45% 37%
14% 26%
And are we leaving business on the table?
Source: North American Consumer Technographics Financial Services Survey, 2015 (Canada)
Base: Canadian online adults 18+ (online weekly or more) who are insurance owners (~4,500)
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Meanwhile, online aggregators, comparison sites, and brokers are picking up steam…
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…because the hurdles for distribution are falling…fast
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Have you heard of Google Compare for
insurance?
…so, what about Google?
Yes, I have heard of it, and used it
3%
Yes, I have heard of it, but haven't used it
8%
No, I have not heard of it but I would consider using it
39%
Source: North American Financial Services Online Benchmark Recontact Survey, 2015
Base: Online Adults 18+ (Online Weekly or More) Who Have Insurance
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"Frequent small failures, building
an agile business, we’re in that
world now. It [Google] may come
back with an experience for
consumers that’s actually more
classic broker-like."
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“Google had people taking action.
If they don’t come back, at least it
[Google] made people think
differently and generated new
ideas in insurance."
© 2015 Forrester Research, Inc. Reproduction Prohibited 27
31%
35%
40%
54%
62%
66%
Google Compare will be a valuable newdistribution channel for insurance
Google Compare is a threat to my business asan independent agent
Google Compare is a threat to the insuranceindustry
Google Compare will increase insurer exposureto adverse risk selection
Google Compare will drive increased agencyinvestment in digital technology
Over time, Google Compare will drive change inhow agents engage with customers
How much do you agree with each of the following list of statements?
% indicating agree or highly agree
Google perceived more as a spur than competitor…
Did you know?
63% of brokers
we surveyed
had heard of
Compare Source: Forrester Independent Broker Panel Q3 2015
Base: 164-166 Independent Broker Professionals
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Agenda
› How is digital changing the job of the broker?
› What digital best practices should brokers watch?
› What does the future hold for the broker?
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Five forces are driving change
›Commoditization
›Economics
›Competition
›Technology
›Data
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Carriers are making some effort to streamline broker interactions
Base: 2,420 non-insurance, 111 insurance North American technology and business decision-makers whose firms’
most important initiative in the next 12 months is to grow revenues; Source: Forrester’s Business Technographics®
Global Priorities And Journey Survey, 2014
24%
16%
26%
29%
57%
47%
74%
15%
18%
28%
31%
42%
44%
64%
Accelerate our time-to-market for newproduct launches
Move from products to services-basedrelationship with customers
Revise our pricing models
Improve the efficiency of channel andre-seller partner relationships
Pursue new business opportunities inemerging markets
Launch new products
Grow our customer base in existingmarkets
“You said that in the coming year, your firm wants to grow revenues. What actions is your firm taking to achieve this
objective?”
Insurance industry
Other industries
© 2015 Forrester Research, Inc. Reproduction Prohibited 31
Source: Forrester Independent Broker Panel Q3 2015
Base: 164-166 Independent Broker Professionals
…while brokers are also focused on customer experience
32%
42%
53%
61%
75%
75%
77%
79%
86%
87%
87%
91%
91%
92%
96%
97%
98%
99%
To improve the integration of acquisitions
To expand into new markets
To attract new employees
Our customers expect to engage with us using digital…
To reduce our costs
To get better insights about our business performance
To drive market share growth
To see a lift in our customer satisfaction metrics
To gain a competitive edge over new competitors
To gain a competitive edge over our traditional competitors
To gain better insights about our customers
To increase our efficiency
To streamline and improve our business processes
To improve our cross/upselling performance
To drive revenue growth
To create a better experience for our customers
To gain new customers
To retain our existing customers
How important will each of following list of priorities be for your strategy as a broker in 2015?
%indicating Important or Extremely Important
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…which is shaping agency digital priorities
23%
30%
32%
35%
37%
38%
39%
40%
45%
55%
61%
64%
73%
Implementing new enterprise applications such as…
Improving the reporting of broker or producer…
Implementing or expanding new comparative rating…
Implementing video as a means to deliver advice and…
Expanding our existing mobile capabilities to include…
Implementing or expanding a broker management…
Implementing new mobile business applications on…
Implementing or expanding business analytics
Launching a social media strategy
Increasing the usage of bridging from your broker…
Expanding our social media strategy
Implementing or expanding a digital marketing strategy
Improving lead generation
Which of the following digital initiatives are likely to be priorities as a broker over the coming 12 months?
% indicating High or Critical Priority
Source: Forrester Independent Broker Panel Q3 2015
Base: 164-166 Independent Broker Professionals
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Finding an broker will be like finding a date
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…and imagine finding a broker, based on digital character
Such as
locations that
use digital
technology in
the practice like
electronic
medical
records or
electronic
prescription
transfers
Image source: Premera Blue Cross website
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Digital is driving traditional carriers and brokers to launch new digital arms
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A service ecosystem is emerging to surround core insurance
Insurance
Enjoyable
Sustain
engagement
Crucial
Comfort
Piece of mind
Arms-length Home
Life
Auto
In the foreground Family/care monitoring
Health/wellness
Trip planning
In the background Home safety/access/security
Digital self
Driving coaching
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And one insurer is already getting into the home repair/improvement business…
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8%
12%
18%
22%
22%
23%
23%
24%
25%
32%
36%
37%
38%
38%
47%
55%
Home downsizing services
Moving, packing, and logistics services
Auto repair services
Tax and accounting services
Travel services
Home buying services
Auto buying services
Legal services
Home repair services
Financial management
Appraisal services
Estate planning
Business consulting
Home inspection services
Disaster planning services
Cyber threat monitoring services
How willing would you be to sell each of the following services?
…and at least some brokers would be willing to sell services*
Source: Forrester Independent broker Panel Q3 2015
Base: 177 Agency Professionals
**Assuming there was a network of providers which enabled an agency to offer customers and business value-added services along with an
underwritten insurance product
What would sway
non-believers?
• Bundles
• Referral leads
• Local providers
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Agenda
› How is digital changing the job of the broker?
› What digital best practices should brokers watch?
› What does the future hold for the broker?
The future of insurance depends on the
future of the broker.
The broker of the future will . . .
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› Insurance broker
Today Tomorrow
› Risk counselor
› Administrating
› Seller
› Product-led
› Desk/laptop dependent
› Many
› Client advising
› Facilitator
› Needs-led
› Mobile dependent
› Right number
› Compensation-driven › Value-driven
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How do we prepare for the future?
›Shifting from systems of record to systems of
engagement
›Digitizing the kitchen table conversation
›Changing how brokers work
›Using services to extend the customer
relationship
›Equipping brokers to be data analysts
Thank you
forrester.com
Ellen Carney
+1 617.613.6328
Twitter: @ellenmcarney Right-click
and “Change
picture”
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