Brokerages and broker groups need to think fast about investing in digital platforms if they want to keep their customers happy, according to an insurtech specialist.
FinTechNZ member Jason Roberts says collaboration between insurance incumbents and startups will be the key to driving industry innovation in the coming years, though he admits that both parties face a myriad of issues that might prevent them from launching a partnership. These range from brand risks to differing priorities, trust issues and incompatible IT systems, but he says it is vital to bridge the gap between the two if the industry wants to keep up with customer needs.
“Thirty per cent (30%) of the participants in FinTechNZ events are coming from large insurance incumbents, so that’s a good sign that they’re engaging with the sector,” Roberts told Insurance Business.
“Some organisations are much more open than others, which reflects a mixture of different types of leadership. But if you compare the attitudes now to what they were at this time last year, there has certainly been a major improvement.”
“Most of the insurtech companies we see in New Zealand are actually comprised of people who have left large incumbent roles to address a unique issue and build their own solution,” he explained. “This means that they know the industry well, and they’re looking to support and add value to incumbents. However, startups often have short funding runways and find it hard to recruit people, so engaging with them does take a certain amount of flex and risk taking. There also needs to be a certain amount of give and support from the incumbent to start engaging with them.”
Roberts says digital platforms are especially important for the adviser channel, which is likely to be the most affected by the rise of chatbots and AI in the individual consumer space.
“There will always be a need for specialist broking services, particularly within the business world, but experiences will certainly change,” said Roberts. “The one area the adviser sector really needs to move fast on is the ability to give customers a digital platform experience. They need to be seen as a part of that process, or they’ll start losing their reason for being in the customer relationship.
“The broking groups really need to be offering platforms that enable their brokers to retain and empower their broker-customer relationships.”