Australian brokers are frustrated by the service levels of insurers amid tough market conditions, according to a recent survey
Some brokers have embraced digital technologies and insurtechs to combat these problems
BizCover for Brokers had a 250% rise in brokers using its insurtech platform
Australian brokers are less satisfied with the service levels of insurers, according to an industry survey, as the fallout of the COVID-19 pandemic continues to impact the insurance sector.
The IB Brokers on Insurers 2021 survey, which interviewed more than 300 Australian brokers, identified claims turnaround time and communication, training and development as particular issues of concern.
Incidentally, both categories were among the top priorities for brokers when choosing an insurer.
While the Australian insurance market is likely to continue its three-year growth into 2022, the problems brought about by the pandemic and the hardening market are not likely to go away any time soon.
It would therefore be a fair assumption for brokers to think that reduced service levels from insurers are here to stay and will probably get worse before they get better.
Still, for brokers who embrace new technology and insurtechs that combat these inefficiencies, there are ways to tap into this continuous industry growth.
The brokers’ verdict
Perhaps the clearest insight from the Brokers on Insurers survey is that insurer service levels have gotten significantly worse since the start of the pandemic across most metrics.
Brokers awarded insurers an average score of 2.92 for communication, training and development, slightly higher than the year before but still significantly lower on average across pre-pandemic years.
Brokers also lamented slow claims turnaround time among insurers, a common gripe among brokers that has been steadily worsening throughout the survey’s nine-year history.
This year’s survey found 64% of brokers said claim turnaround time was worse than the year before – roughly the same amount as what brokers said in 2020. Similarly, 75% of brokers said the turnaround time on new business has gotten worse over the past year.
“What we are hearing is brokers are experiencing slow response times, a lack of communication and more restrictive policies as insurers battle rising premiums and adjust to hybrid work models,” says Jane Mason, Head of Product, Channels and Risk at BizCover for Brokers an insurtech that looks to streamline the oft-forgotten SME insurance sector.
Insurtechs are heating up
While the report makes for grim reading, there may be a silver lining among the wreckage brought about by COVID. The industry was already on the verge of a seismic, tech-driven shift and the pandemic may have been the watershed moment that has shaken it up.
A McKinsey & Co report identified several technological trends – such as next-gen automation – that are likely to positively impact the insurance industry in the coming years and the segments where they are most likely to thrive.
Simultaneously, insurtechs has bounced back after an initial pandemic drop-off in early 2020 to finish with a record level of funding of $7.1 billion for the year, according to a recent report.
In Australia, the interest in insurtechs is also heating up and brokers are catching on, with BizCover for Brokers experiencing more than a 250% rise in brokers utilising its platform roughly since the start of the pandemic.
“What we’ve tried to do is deliver a solution that addresses many of the archaic transactions in the broking process and increase efficiency through automation. Whilst our journey started long before covid our solution seems to have addressed many of the qualms of brokers brought on by the current market situation.,” says Mason.
“Rather than being frustrated by the continued upheaval in the service of some insurers, we urge brokers to embrace technology. Through utilising these technological tenets, we provide brokers with an automated quote, compare, bind and full policy lifecycle management solution within minutes.”
“You can get multiple products from multiple insurers and we have a full customer service team to solve any enquiries quickly and efficiently whether it be by phone, email or online.”
SME insurance was already regarded as a largely unprofitable segment even before the pandemic, often riddled with inefficient processes delaying quote and claim times and low-profit margins.
But through incorporating new technologies into the quoting and binding process, insurtechs like BizCover for Brokers allows brokers to potentially get up to 17 quotes in five minutes from six insurers and then bind five policies simultaneously – if they were inclined.
“It’s important for SME clients to get clear information and advice and to get their product quickly. Brokers can deliver this for their clients efficiently and quickly through our platform,” says Mason
While BizCover for Brokers is but one example in a specific segment of the overall insurance market, it shows the potential insurtechs can have in fostering better outcomes for brokers.
With the industry still facing issues due to COVID-19 and the market continuing to harden, brokers may need to consider new ways of dealing with the current problems they are experiencing from insurers.
Luckily, there is an unprecedented level of access to technology that can help those in the industry to mitigate instability, and a flood of new insurtechs to facilitate the transition.