How will insurance brokers utilise real-time data to differentiate themselves in the future? Connected policies will undoubtedly play a role in risk placement as well as client consultation.
The potential of connected policies, powered by real-time data, gives a strong insight into the direction of a digitised insurance industry. The value in a connected policy is dependent on the insight derived from data received. Therefore, there will always be the possibility of further benefits from improved asset monitoring. Within the marine sector, detailed information around vessel variables can feed directly into policy structure and ongoing risk management. Timely access to data can not only change the structure of policies, but also alter established practices within the insurance market.
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Dynamic data aggregation and analysis platforms operate on the same principles. The more information one can aggregate from a fleet and associated variables, the better the insight it can provide. Adopting such well-served software at a brokerage gives Brokers a more detailed view of client risk. They can therefore advise Clients on how to improve their risk profile and deepen their relationships, improving retention rates.
With the market becoming increasingly competitive, risk consultation services are a sustainable method of differentiation. On-going relationships will result in Brokers giving the Insured an insight into market performance and allow them to be placed with Insurers that best suit their needs. Brokers will also have visibility of an individual Client’s risk mitigation efforts over time. At portfolio level, such information can be used to segment between those under and over performing. Increased detail in Client efforts can support negotiations with Underwriters. A view of risk over time can also lead to products which follow a roadmap. Connected policies can be structured so that terms change when agreed milestones are hit, including benefits such as rebates. Whilst benefits are currently part of specific policy frameworks, improved visibility will provide better justification for awarding them.
Data platforms allow Brokers to work with their Clients and reduce risk over time. Doing so at scale will create a shared trend across the Brokers’ portfolio. Brokers will also be able to segment specific areas of a policy based on risk profile. Such segments can be written by select Underwriters. A Broker can therefore better cater for both Client and market needs. Taking better risk to market will be noted by Underwriters, improving relationships whilst increasing the volume of business written.
A digitised brokerage will find a more stable, long-term income stream via improved consultation. In the short-term, a higher policy turnover will increase commission frequency. The efforts of the Broker will also drive efficiencies throughout the value chain, ensuring an ever-improving outlook for the industry.
“The other factor that benefits both clients and insurers is that the use of data will allow brokers to create more precise products. Cargo aggregation at ports for example will be simple to ascertain; Ships trading into war risk areas will be easy to monitor with a preciseness that hasn’t been available since Lloyds started and the opportunity to build policies that have specific time limitations on them or that are flexible in terms of limits will be taken as read. It is also expected that there will be less challenge over claims settlements many of which should be capable of being settled within hours and not days (or even months) as is the case at the moment.” – Marcus Baker, Global Head of Marine and Cargo at Marsh JLT Speciality