tsx - the future of insurance depends on the future of the broker

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.


In the digital age, is

the broker still

relevant?


And if they are now,

will they remain so?


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).


What did we learn?

Digitally-enabled distribution is

changing, not eliminating, the job of the

insurance broker.


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?


Agenda





The broker is a key element in insurer omnichannel strategies

Broker

CRM

Online

Mobile

Social

Analytics

12.7

12.3

15.9

8.0


“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%


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


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


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


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)


Meanwhile, online aggregators, comparison sites, and brokers are picking up steam…


…because the hurdles for distribution are falling…fast


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


"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."


“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."


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

Google

Compare Source: Forrester Independent Broker Panel Q3 2015

Base: 164-166 Independent Broker Professionals


Agenda





Five forces are driving change

›Commoditization

›Economics

›Competition

›Technology

›Data


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


Source: Forrester Independent Broker Panel Q3 2015


…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


…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



Finding an broker will be like finding a date


…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


Digital is driving traditional carriers and brokers to launch new digital arms


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


And one insurer is already getting into the home repair/improvement business…


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


Agenda




The future of insurance depends on the

future of the broker.

The broker of the future will . . .


› 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


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

[email protected]

Twitter: @ellenmcarney Right-click

and “Change

picture”

mailto:[email protected]

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