Digitalization is a massive opportunity for insurance brokers and also a massive threat. Those who use the right digital tools will outsmart their competitors and quickly gain market share.
Digitization will change the insurance industry, not only for insurance firms but especially for brokers. According to a study by the initiative D21 and Kantar, 88 percent of all Germans use the internet, and 94 percent of those make online purchases, according to Bitkom.
And that’s not just people ordering their socks online. 43 percent have already signed an insurance contract digitally. Still, insurance brokers have not yet picked up on the trend, according to Stephan Bruckner from Liechtenstein Life & Prosperity Brokershome. While some brokers still believe digitization will not impact their sales business, others are afraid of its negative consequences. But that’s the wrong approach.
Clients will still need brokers
Digitalization is a massive chance for insurance brokers and also for their clients. Brokers can use digital channels to widen their audience and reach out to more clients. Like eCommerce has increased early adopters’ sales, going digital will also increase the broker’s bottom-line if they can outsmart their competitors.
On the other hand, those who can’t keep up with the trend may very well be right in their fear. Not offering digital channels and solutions is a recipe for disaster in an increasingly digital world. Brokers will still be needed; they provide expertise and consulting. They also own the client relationship and trust. But in a few years, nobody will want to travel to a broker’s office anymore to fill in contracts and paperwork. It’s all going to be online; in fact, it already is, clients just haven’t noticed it yet, but that’s just a matter of time.
Brokers will have to lead the change
Some brokers might have more time than others, depending on what they sell. A study by Bitkom shows that 34 percent of Germans have already signed travel insurance online, 32 percent car insurance. But just 5 percent decided to sign a life insurance policy online.
Bruckner explains that for some types of insurance, customers don’t need a broker. That’s especially true when the risks are low, and there isn’t that much money involved. It’s different when insurance policies become more complex and more critical, such as life insurance. That’s when the broker is important because clients need proper consulting.
In the future, however, that consulting will also happen online. Take software like PATHADVICE, for example. Insurance brokers can implement it on their website and offer a video-consulting interface to their clients. They can directly speak with them via video chat, co-browse insurance policies explaining the key points, and directly sign a policy through a qualified digital signature. It’s easy, cost-effective, and convenient for both the broker and the client.
Brokers will have to lead this process. According to the Bitkom study, 30% of those survey respondents that have already signed a policy online say it was complicated and time-consuming. So it’s not enough to just put all information online and dump it on the client. Brokers will have to accompany this process with the right digital tools. If they do, they will have an excellent chance to significantly increase their bottom line.