Tips for succeeding when the rules keep changing
In the not so distant future, your competitive landscape could look very different.
The Internet of Things, where more and more devices are connecting to the internet and collecting data, means market disruption is the new normal.
Whether it’s your smart hairbrush that analyses the health of your hair, or a digital legal assistant, technology is infiltrating every part our lives.
This capability is opening doors for a new breed of competitor who is using technology to solve friction within the customer experience, or streamline a business process to slash costs.
So how do you keep track of all this activity – and stay one step ahead? Macquarie Bank’s National Head of Insurance Broking, Eoghan Trehy, believes it’s a matter of making sure you’re well informed, open to new opportunities – and being proactive, rather than reactive.
Insurtech is the latest disrupter that is innovating the insurance industry with new, streamlined technologies that are re-shaping the established model.
“In Australia’s insurance industry, we’re not quite seeing the impact of insurtech on brokers yet. But signals from overseas risk markets and requirements in the domestic/retail sector are an indication of what is to come,” he says.
He gives an example from one of the four new local insurtech start-ups he has spoken to in just the past week.
“They are about to launch a new direct product that will allow SMEs in retail or hospitality to buy insurance on their mobile phone – targeting the emerging demographic who prefer to transact that way. To me, this indicates a big shift in the traditional model. They’re using technology to combine the skills of an underwriter and broker to deliver a better client experience, in a channel Generations X, Y and Millennials prefer.”
Trehy suggests four ways to map your evolving competitor landscape.
1. Understand your clients’ pain points
“If you lose touch with your clients’ needs, you’re already operating at a disadvantage,” he emphasises. Talk with your clients about the experiences they enjoy from other service industries.
“They may tell you about the analytics their accountant can provide in real-time, or the way their lawyer now uses artificial intelligence to get contracts completed in a day, rather than weeks,” he suggests. “Meanwhile they might be frustrated they can’t obtain their claims history or policy details easily from their insurer.”
2. Benchmark your performance
While benchmarking reports are a valuable way to understand how your business is performing compared with others in your market, it doesn’t predict where you’ll be in the future.
“It’s a look back, not a look forward,” explains Trehy. “But you can use benchmarking to check how you respond to change – are you investing enough in technology, are you willing to be an early adopter?”
These reports give you indicators for competitor pricing, staffing costs and profit margins. But to get a detailed competitive analysis, it’s a good idea to document competitor information such as:
- product details – pricing, channels, outcomes
- strengths and weaknesses – how well it helps users achieve their goals or complete tasks
- market comparison scale – budget or premium, in person or online, local or global, products or services.
Ask your staff to test their service as a ‘competitive shopper’ to get true insights, and check what clients are saying on social media about that brand.
We keep a close eye on insurtech developments in the US and use this knowledge to keep our clients informed on relevant advancements.
3. Build a library of information
Trehy says he sees it as his responsibility to be aware of the latest trends in his sector. “No one cares about the insurance broking market like we do. I’m representing my clients by staying informed, and quite honestly I’m addicted to some of the daily updates I subscribe to.”
For insurance brokers, he recommends reading:
- CB Insights – for all technology, not just insurtech
- Coverager – to track where money is being raised, for what purpose and in what markets
- Insurance Thought Leadership – to keep up to date with specific platforms.
“From CB Insights, we know over USD 1.7 billion was raised globally in 173 insurtech deals last year,” he says. “This year it’s already close to half a billion US dollars across just a handful of deals – but Australian start-ups represent just 1% of those figures.”
It’s essential to watch what is happening in the established US, UK and European markets. “We tend to follow their lead – either an Australian business will replicate their success or a global platform will enter our market.”
Building your library is as simple as keeping a folder on your desktop, so you can refer to the relevant insights or data when you need to.
4. Talk to your broader network
Once you see an interesting idea that taps into your own client needs, it’s time to get some feedback. Trehy suggests talking with your Macquarie Bank Relationship Manager, as they will already be aware of what is happening in that space.
"We keep a close eye on insurtech developments in the US and use this knowledge to keep our clients informed on relevant advancements.”
He says many firms already have the data they need to improve client processes – they just don’t know how to use it to maximise its potential.
“Brokers have phenomenal data about their clients’ assets, financials, people – but are they using it effectively to add real value for their clients? For me, that would be a basic starting point.”
And as soon as a competitor does that, you need to be prepared to respond. Once you have a clear picture of the playing field, you’ll be in a better position to compete.