Explore a co-founder’s insights on overcoming the biggest challenges faced by UK brokers today. Learn strategies for success in a competitive market.
In the midst of economic volatility, geopolitical tensions, and fast-paced technological changes, the UK insurance broking sector is grappling with a myriad of complex challenges. Yet, the most significant hurdle for many brokers is internal – winning the war for talent.
According to Matt Hicks, co-founder at Recorder, the primary concern for brokers is attracting and retaining young professionals. A significant, often overlooked reason is the industry’s reluctance to embrace modern technology, leaving staff to deal with outdated IT systems and laborious processes.
Hicks highlights that many brokerages struggle to ascertain which aspects of their operations are profitable. Brokers often juggle multiple manual and digital processes, leading to redundant efforts. This complexity makes it challenging to evaluate the profitability and customer satisfaction of each client engagement. Additionally, brokers face growing competition from digital-first competitors, such as online brokers and MGAs, who offer clients more choices.
For small businesses requiring insurance, often due to legal obligations or client demands, the need for quick and seamless policy acquisition is paramount. A traditional broking approach can be sluggish in today’s fast-paced economy, necessitating adaptation.
Hicks points out that the disparity in user experience between personal technology, like smartphones, and the cumbersome software used at work is increasingly noticeable to younger brokers. They are actively seeking improved alternatives. Externally, there’s a considerable gap between brokers’ perceptions of a great sales process and the dissatisfaction reported by customers.
Most brokers still rely on lengthy phone conversations for initial consultations, even with small clients, which contrasts with other professional services. Small to medium enterprise (SME) owners often cite the lack of digital engagement as their biggest frustration with the insurance process.
The rise of online solutions for small businesses is notable. These platforms, which initially catered to freelancers and micro-businesses, are now expanding to accommodate the complex needs of SMEs, attracting the modern, tech-savvy consumer.
The simplest and most effective solutions often involve providing customers with a client portal for policy document access and mid-term adjustments (MTAs). This step significantly enhances business efficiency while meeting customer expectations.
Hicks observes a trend of brokers partnering with tech-focused, service-oriented MGAs instead of traditional insurers, as they often streamline brokers’ workflows. The integration of AI is also emerging as a pivotal development, particularly in data extraction and process automation.
An example is Smart Renewals – by uploading a year’s proposal form to an AI, relevant data points are extracted and presented for customer updates, saving time and reducing the likelihood of clients seeking alternative quotes.
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