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Looking to the future: the changing role of the insurance broker

November 2018

We are celebrating our 50th anniversary! That’s 50 years of service, 50 years of evolving offers, 50 years of growing a dynamic team. In 2018, digital transformations in artificial intelligence and blockchain are revolutionizing the industry. The role of the insurance broker is changing too. Anne Martel, an expert in damage insurance, and Richard Martel, an expert in group insurance, analyze this period of important change and new integrations of technology.

Regard vers le futur: évolution du rôle du courtier en assurance

The big challenges insurance brokers face
The obstacles and challenges of the insurance brokerage industry are many, be it the necessary transition to digital, artificial intelligence or blockchain. It is necessary to make the right moves to be able to continue to support clients and actively respond to their needs and deliver financial security to their businesses.

The number one reason to seek out the services of a broker is the complexity of the various products available on the market. As long as insurers retain a diverse product range, the broker will remain a relevant player in the procurement of insurance policies by business owners because the customer has too much to lose.

The goal of insurers in the short and medium term is to offer insurance products online to individual clients. Nearly 40% of consumers say they are ready to take the leap and buy insurance online. However, many consumers do not fully understand what they are buying, or the risks involved. This reality has become the norm, as the challenges related to digital and risk management are not simple.

Without the guidance provided by a broker, business owners face a difficulties as they often can choose products that do not fully suit their business needs.

One might think that for SMEs or startups, choosing the appropriate coverage is a minor detail, assuming they have a lot less to lose. However, it is much too risky for a business owner not to be properly insured. No business owner should see their dreams and financial success go up in smoke for having chosen the wrong insurance policy. This is THE reason why they absolutely need to be supported by an expert.

Tech automation: an ally or a threat?
Technological automation must not be seen as a threat, but rather as an ally. It is important to keep in mind that insurance products are only part of an overall coverage solution. A professional is required to take charge of needs evaluation and risk management (analyzing the workings of cybersecurity and other important functions). This is the real key to success. Companies have processes that do not allow "easy" activation without the proper support. In fact, it is more relevant than ever to have an insurance broker. Moreover, business owners are looking for personalized services with a human element and a close B2B relationship.

As of June 2019, the enabling technological tools will become fully operational. The consumer may obtain any type of insurance they wish without needing to consult a qualified broker. “Since January 2018, we have been working on the creation of a digital platform on which we wish to provide consumers with the possibility of making transactions online without our intervention,” explains Anne Martel. “We will, therefore, acquire these technologies to improve our services as experts and be able to evolve the customer experience.”

The future, risk management and cybersecurity
The main challenge of the future is cybersecurity. Business owners will have to be extra careful and invest in prevention products to avoid any potential halts in their operations that could result in heavy losses of income.

"Recently, we have been working with Cyberswat, a company doing diagnostics for websites and computer systems, to deliver a report that explains where the client needs to focus their efforts to fix flaws. This is a way of providing businesses with an effective toolbox to choose the right insurance product for their financial security needs,” adds Ms. Martel.

In addition to running website and computer system diagnostics, the collaboration with Cyberswat gives clients access to webinars so they are always connected to the latest cybersecurity news. Cyberswat can also provide support and guidance to experts in the event of a cyberattack.

The future challenges of group insurance
Quebec's market for group insurance plans is relatively conservative, but lately customer needs have changed significantly. For example:

  • new technologies and systems must be integrated to create added product value;
  • companies must be allowed more autonomy to manage plans and control costs (financial risk management);
  • for health coverage, it is necessary to allow clients to manage their own budget, with, for example, a base pricing guide with an added option for the individual to select specific areas to which they wish to add supplementary funds (glasses, psychology, dental services or other);
  • demands for increased flexibility, data analysis and plan evaluation must be met.

Business owners want to understand their own insurance plans. Self-management is an interesting solution that allows clients to better understand and manage their assets. When there is a basic understanding of what is included in the group insurance, it is no longer necessary to constantly shop around. Rather, the business owner seeks to work with the best account manager to manage their claims. In the United States and English Canada, self-management is already well established. Here in Quebec, the market has been slow to adopt this approach.

Innovations that transform group insurance
Several new factors are driving the transformation of the industry :

  • mobile applications (for example, access to health services);
  • transparency and the ability to compare drug prices;
  • rapid claims;
  • service and professional evaluations, to reduce claim costs;
  • virtual medicine as an advantage and a solution to reduce absenteeism and presenteeism;
  • customized plans for the company and individuals in the company.

"Today, the problem is not so much the difference in drug costs between different pharmacies, but rather the very high cost of exceptional drugs,” says Richard Martel. “We have always welcomed in-depth analysis of our insurance plans. Our more than 15 years of self-management expertise allows companies to better evaluate, manage and reinvest in their insurance plan. There is an incentive to reduce claims. It takes a high level of skill, and this market is late to develop although cost-management solutions already exist.”

Why the Martel & Martel One-Stop-Shop?
Creating a one-stop-shop was a focal point in the partnership between Richard and Anne and allows Martel & Martel to offer multiple services under one roof. Many companies deal with two firms for their corporate and group insurance. Two firms, two philosophies, two different approaches. Integrating multiple services lets the customer benefit from different areas of expertise and personalized supports under one roof. This is rooted in the foundation of the Martel & Martel mission.

In addition, the firm works with partners in innovation to stay abreast of new trends and remain relevant in this ever-changing environment. Partners also help co-create insurance products tailored to new businesses. Anne Martel explains: "Our risk management training requires us to always be on the lookout for potential needs. We prefer to prevent rather than cure. When a new need arises, it is imperative that we leverage creative and qualified partners who are able to offer top-quality products to our customers. The future goal is not to offer everything but to offer what clients need with a personalized and collaborative approach. We believe that it is better to be surrounded by the best rather than spread ourselves thin by trying to be experts in everything. This also allows us to learn something new every day and maintain our leadership as risk managers and brokers.”