Insurance Brokers: 3 reasons why it’s time to upgrade your tech
It’s a sad truth that most insurance brokers are still living in the last century when it comes to technology – and are therefore taking big risks with their businesses.
Many may have just about got their heads around the likes of email, online filing of compliance documents and IT-based accounting systems. But when it comes to using technology to help deliver tangible business benefits – for example by finding new customers, improving loyalty and customer service, or even managing regulatory compliance – they’re often just not at the races.
This is put into sharp contrast by other companies in the financial services sector who are, after a slow start, using digital tech to help them work smarter. These can range from challenger banks personalising their services based on their knowledge of individual customers and their needs, to insurance providers delivering profitable new products based on data analysis and ‘pay–per–use’ models.
And if brokers don’t soon follow them in their move into the 21st century – particularly when it comes to using technology to organise and analyse their data to make smarter business decisions –some are likely to fall by the wayside.
So, here are three major risks you could be running…
1. Becoming irrelevant to your clients
One of the great advantages brokers offer, particularly in the face of increasing competition from online comparison sites, is being able to deliver a bespoke service tailored to individual needs, based on a detailed knowledge of clients – particularly when the insurance required is not a simple ‘off the peg’ product.
Historically, you may have engaged with clients in face-to-face meetings or on the phone, and you probably still do. But as your new prospects become increasingly younger, and therefore tend to prefer managing their lives and businesses online, it becomes tougher to attract new business in the old ways – and ‘broker disintermediation’ (or, put simply, irrelevance) becomes a growing likelihood.
“By sticking to your traditional business methods, you can be increasingly sure that you’ll lose that detailed understanding of your clients, and you’ll been seen as an unnecessary – and potentially time-consuming and expensive – barrier between you and the product they need,” says Tim Chisnall, Cognition24’s Commercial Director.
“Or you could use a customer relationship management (CRM) system that gives all your sales people a detailed knowledge of your clientele’s needs and all previous contact with your company – both online and offline. This could give you a genuine competitive edge with that all-important new business pipeline.”
2. Making your customers feel unloved
Younger clients entering the market place have increasingly high expectations from the businesses they deal with, particularly when it comes to buying services – and particularly when it comes to forking out money for boring–but–necessary expenses, such as insurance.
“A surefire way to drive any potential client away is to make sure they realise you don’t know the first thing about them when you contact them,” says Tim. “Oh, and only getting in touch with existing clients when it’s time to renew their premiums.
“Or, alternatively, you could use an automated marketing system that allows you to grow loyalty – and high-value repeat business – by staying in touch with your clients after you’ve made a sale, providing them with useful information and customer service. All with minimum effort required on your part.”
3. Ensuring your data is not GDPR compliant
One of the best ways to hurt your business rapidly is to flout the new GDPR rules around how you use your customer data. You could do some serious GBH to your bottom line by landing yourself a big fine (up to 4% of your annual revenue) for failing to use and protect your data in line with the new rules. And that’s not to mention the huge reputational damage that would go with it, which can particularly harm the word-of-mouth recommendations you may traditionally rely on for new business.
“Whatever IT system you’re using, as long as you’re managing your data correctly, you’ll stay on the right side of the law,” says Branko Bjelobaba, founder of Branko Ltd, who’s been advising insurance companies on compliance issues for more than 20 years.
“The important thing is to keep your marketing lists and records up to date, and a clear record of what level of contact the client has agreed to, so you can understand whether you have a legal basis for contact with a particular person or not, and what kind of contact you can have – for example, just for customer service, or maybe for marketing new products. And then, of course, you need to stick to it.”
“It may be possible to do this using outmoded systems like spreadsheets, but it can be increasingly complex,” says Tim. “And that can be very time-consuming and risky. Or you could easily install and run a good CRM system – such as Salesforce’s – that will help you manage all your customer data securely and effectively. And legally,” says Tim.
So, if you want to future-proof your business, it’s worth avoiding the traps above and starting to think about how smart new technologies – that are now easily within the grasp of companies of any size – can help you earn and keep a competitive edge.
Find out here how we at Cognition24 can help businesses right across the financial services sector.