In December 2016, Jon Baxter was one of the panel of thought leaders at Instech2020, a conference for top insurance companies, Instechs, and innovators to explore the impact of emerging technology on the insurance industry. It was a fantastic meet up with a wide range of knowledge and expertise shared.
At Instech2020, thought leaders were asked their opinions on a range of topics including disruption, the future of insurance brokers, and how change can happen.
You can watch Jon’s answers to these questions in this video or in the transcript below.
Where is disruption happening?
I certainly think in the broker space there’s huge amount of potential for disruption to occur. Has it started to occur yet? That really does depend. If you were to look at the potential for the technology to come in and have a massive impact, it’s there, but I think the incumbent brokers have yet to take hold of that. There’s a huge amount of efficiency and productivity gains to be made in this space, but I think there’s certain issues to be overcome before that can be realised
Will brokers become redundant?
If we were to take Blockchain technology as an example, if that transpired, what would happen? I think for those brokers who deal with a lot of low value high volume transactions I see disintermediation being a critical issue. For the other types of transactions where this is high value and low volume, I think there’s going to be specialist niches where brokers can play a fundamental part. I think at the end of the day if a broker can adopt technology and become the Uber of the broker world, then it can change its strategy to consolidation to adopting technology.
What do you think are some of the problems in changing for the broker?
Some of the current issues that we find with brokers is a focus on short term revenue, a bonus mindset and that leads to a tactical approach. There’s also a lack of capacity and capability in people to think strategically and longer term, so we’re perpetually on this mill just trying to get the day done. Finally, I think there’s a conservative risk approach that these brokers adopt. There’s a mentality associated with this that needs to change.
What would be the first steps in that change?
I think you have to attract the right people firstly. People with a passion for change in the industry. People with a passion for technology as well. I think also there needs to be a significant commitment in investment. At the moment business cases are made on very short term return on investment. There needs to be a different set of decision criteria for the accepting of the more risky ventures.
We also need to start working with start-ups more. So there’s a big difference in the cultural approach for start-ups and in corporates but I think we can develop a partnership of working together
Finally it’s understanding what the value proposition is for any of these ventures. Considering what the business model is for any technology solution. It’s the package of thinking about the consumer first, then thinking about how we’re going to deliver that change and what it’s going to look like. Then looking at the technology solution, and we as a company can help deliver that.
If you had a magic wand and could change one thing about the world of insurance, what would you do?
I think it’s getting the strategy to change. What I see in the broker domain is there is a lot of consolidation occurring, they’re trying to reduce their cost base, trying to gain market share by acquiring customers. For me that’s a race to the bottom. It’s not lose/lose but it’s very short term.
I think they’re going to have to sacrifice some sacred cows, and acknowledge that sharing of information is going to become a prerequisite to continued success to get the efficiencies and productivities.
To learn more about how Jon and the team at Baxter Thompson can help your insurance company make more effective use of current IT systems and embrace emerging technologies, please have a look at our information on Insurance technology and get in touch
You can also hear the wisdom of other Instech thought leaders at http://instech2020.com/instech_replay/
The date for the next Instech2020 will be 20th June 2017 - will you be there?