COVID-19 is Making the Business Case for Brokers to Embrace Change
The question as to how the role of the broker will look in the future is not a new one.
For many years, this has been on the agenda at conferences across the industry and the answer has more than often simply been that it ‘needs to change’. The issue that has not been addressed is what that change will look like.
The impact of the COVID-19 pandemic has been a catalyst for that change and has provided the answer that has been staring the industry in the face for some time: brokers need to have the ability to do their job wherever they are in the world, anywhere and anytime.
For brokers, on the whole, the need to work remotely due to the COVID-19 restrictions was handled well in the run up to the 1 April renewals, starting with Lloyd’s ‘dry run’ to stress-test the market on 13 March ahead of it closing on 19 March for the duration of the crisis.
Lloyd’s Chief Executive, John Neal, said the test of its emergency trading protocols had been successful and “should provide confidence in our collective ability to trade electronically.”
Brokers were able to use systems such as Citrix to access documents and then place risks into the market via PPL, where placement numbers and users showed a strong uptake. Most brokers were quick to adapt, including expansive risk solutions specialists McGill who were recently reported in the press to have placed the most complex risk yet to be transacted on Whitespace.
Not a Smooth Process
However, problems have been seen on the back-end processing side. When speaking to those who process the business, I was told that they have experienced multiple challenges especially in back office functions handled by broker technicians and claims staff, as current systems have simply not been designed for such intense remote working use.
While there has been much talk around the impact of COVID-19, it is not, however, the fundamental issue here. The real discussion is around the use of technology, cloud computing, and the ability for brokers to work on the move in ways they have not been able to before.
Many brokers have already put their document management systems and e-mail (e.g. Outlook 360) onto the cloud, but few have done the same with their broking platforms. This has meant that these brokers simply aren’t able to perform their tasks efficiently or have easy access to client and management reporting and analytics when away from their offices.
Reticent to Change
The London market has always prided itself on its ability to innovate, but when it comes to how it operates and processes business, that innovation has always been somewhat lacking. This is evidenced by the various hugely expensive failed projects over the last 20 years or so.
Here, cloud-based systems have the potential to make a significant difference, not only in the way in which the industry will operate, but also how individual businesses are organised. Our industry is notoriously slow to adopt new practices, and these ideas will lead to fundamental changes that some will welcome, and others will find hard to swallow. For example, given the ability for brokers to fully operate closer to their clients, will there still be a need for all staff to be based in one expensive central London office? It is likely that the current situation will lead to welcome cost savings as many brokers move to hot desking.
A Game Changer
On a positive note, some brokers have been quicker to adopt new technologies than others, including cloud-based systems, and these brokers will have definitely had an edge over the competition during the last few weeks.
The focus has now shifted to how brokers can access their data and manage their client relationships remotely with complete access to everything they need. In these turbulent times, these are the sorts of issues the industry needs to consider seriously.
In my opinion, cloud-based platforms will be key for brokers to stay a step ahead and deliver a service their clients now expect. I have spoken to many brokers who say they have met with clients in the past and have been faced with questions they did not have the information at hand to answer. A move to a system where they can instantly call up data on a client right there and then on a tablet or phone, including all of their risks and their claims, will be a game changer.
Of course, speed of response will be crucial, and a broker will only be as good as the quality of the data they have available. However, there is no reason why these cannot be managed properly, and being able to access every detail and document on a client will significantly empower brokers.
More Service. Less Cost.
While we have seen some hardening in the market for clients, there has also been pressure on both broker remuneration and service levels from clients used to immediate online answers elsewhere. As such, many brokers are now looking at how they can do things more efficiently to reduce their costs.
Again, cloud-based solutions can provide the answer. Brokers who have the ability to access data where and when they need it will be able to make better decisions, offer superior advice, and deliver a faster response to their clients. However you look at it, this adds up to a far better level of client service.
Performance Based on Productivity
Looking ahead, we are bound to see a cultural change to home working. After all, the last few weeks has proved that it can work. In fact, we are already seeing an expectation of home working in other industries where cloud-based technology is more widely used. In my opinion, the insurance industry will be next.
There is even a view that when working from home, staff are more productive because you have removed the two hours or so they have taken to get to and from the office. Of course, home working requires a greater degree of trust from management, but current events show that working in this way is possible. I believe this will drive a cultural shift whereby staff performance is measured within broking platforms not in time but in productivity.
In this regard, if brokers have the right cloud-based systems in place that measure workflow and productivity, management can also use it to optimise staff output. This will also help to facilitate more robust governance and compliant systems.
This is the Future of Broking
In today’s ‘always on’ world, brokers need to provide clients with an enhanced service that is not time or location dependent. For instance, if a client from New Zealand calls a broker out of normal office hours and they can work remotely, they can pick up the call and access all of the client’s data, whether on the train, waiting for a plane or at home if need be.
Also, the ability for cloud-based solutions to remove the silos that so many broker systems operate under at present will generate a degree of actionable intelligence that will be incredibly valuable. This will create opportunities for brokers to act as trusted advisors and cross-sell additional products to clients given the data they already have on them.
Other industries are already working in this way. And doing rather well. With the right platforms in place, I believe this is also the future for our sector.
By Ben Potts, MD Novidea UK