Digital Innovation Is an Insurance Necessity. Here’s What Brokers and Agents Need to Know
Insurance is an age-old industry, both a benefit and a necessity for the clients it serves. Its longevity has given insurance carriers the dedication, knowledge and deep roots to find solutions for the risks present today. But in order to keep up with changing times, insurance must continue to find ways to improve and adapt.
In today’s world, that means digital innovation.
Personal auto and home are already ahead of the curve, adopting digital tools that are designed for use at the swipe of an app. In recent years, commercial lines carriers have been developing similar tools; primarily focused on leveraging innovation in digital to deliver real time decision making into the hands of brokers and agents.
“When we start thinking about the commercial insurance landscape, what we see is that the majority of commercial insurance is still processed and transacted in a manner that has not changed or been disrupted for the past 80 years,” said Prateek Sangal, head of digital strategy at AmTrust Financial Services.
With the advent of Insurtech, he added, “this outside-in force has shown us that we really need to disrupt the way we manufacture, underwrite, and bring these products to market with the goal of creating efficiencies throughout the commercial insurance value chain.”
The industry is moving towards this efficiency, he posits, and it won’t be long before commercial carriers have a firm grasp on the digital age. The industry has an acute understanding and knows it needs to evolve and adopt these digital tools. Commercial carriers, however, are at different stages of the digital information journey.
AmTrust leads the way with innovative digital experiences that allow our partners and broker community to quote, bind and manage policies in real-time. Our data-driven approach and digital intelligence help create a full suite of digital capabilities supporting the entire life cycle of workers’ comp customers.
Here’s a deeper look at how digital innovation is impacting the industry and how partnering with a carrier well versed in digital innovation can go a long way in creating seamless insurance experiences.
What’s Driving Digital Innovation
The advent of digital platforms, mobile apps and big data has significantly impacted the way we consume products and services in our personal lives. Brokers and agents want one click shopping experiences that they can offer to their customers for insurance. They want clear, relevant information about product features and pricing, and they want it to be served up in a digital format i.e. apps, webpages, etc.
“From a broker standpoint, their expectations are moving towards this digital interaction, not only because of what’s happening in personal lines but also because of what’s happening outside the industry, like Amazon. Like Netflix,” Sangal said.
To bring it back to the commercial insurance space, brokers and agents who embrace digital functionalities will lead the pack in growing their business and be better positioned to address the evolving needs of their customers. Adoption of these digital tools will help agents focus on what they do best — advise their clients.
Digital Tools Making All the Difference
While consumers may drive the digital push, the need to hone the digital tools used is just as important. AmTrust, as an example, began reviewing its digital approach three years ago to keep up with broker expectations when it came to workers’ compensation insurance.
Sangal relayed that the team asked itself, “How do we make our products and services available for our brokers and agents to increase the ease of doing business? We wanted to eliminate busy non-value add work for our brokers – such that they are better positioned to be trusted advisors for their clients.”
The answer: Making AmTrusts’ products and experiences available via an API, or application programming interface, and microservices.
“When you think about submission flow, typically what happens is when someone starts entering information onto a platform, as soon as they’ve entered four to five pieces of information, we make a decision to say whether we like that risk or we don’t like that risk,” Sangal explained. “We can also decide what subsequent questions we are going to ask. Eligibility could be one part of the transaction. As a function of us building APIs, we are supporting those microtransactions or decisions within that submission flow.”
The API and microservices allow brokers to architect the user experience and not be tied into the processes tied to a carrier.
“In the traditional method, a user would log into a singular portal and be beholden to how that one portal designed its customer journey. But by exposing our services via APIs and microservices, agents and brokers can articulate that workflow or user journey to how they see fit,” Sangal said.
Brokers and Carriers Reap the Rewards
Digital innovation isn’t just a craze; these tools may be driven by consumer demand, but their addition to the insurance process reaps many rewards for broker and carrier alike.
Brokers would no longer need to submit risks to their carriers via multiple carrier portals, essentially allowing them to focus on advising their clients and not spend time waiting on carrier decisions. Brokers can then transact more business in the same amount of time because the process is automated. The lead gen tools can help agents with digital marketing and ultimately, lead generation.
“It positions the broker better, because they’ve gotten a decision that they are confident in. They can turn to the end consumer and say ‘This is the product. Here’s the price. It’s ready for you to buy, and all I need is a yes from you.’ Those are all very big advantages for the broker.”
Then, from a carrier standpoint, it comes down to underwriting profit and expenses: How much underwriting profit is being made based on the insurance product being sold? And what’s the expense associated with selling that insurance product?
“We have seen that the carrier can have underwriting savings, because they’re going to write this business at a better loss ratio or a better loss performance,” Sangal explained. “Automating some of the decisions allows consistency of underwriting. With consistency, we believe we will see a better loss performing business as well.”
That isn’t to say that the human element to underwriting is lost, either. Eliminating a human from the earlier stages of the process frees up underwriters for more meaningful interactions when they are required — yet another benefit for broker and carrier alike, because the underwriter has the data already collected by the digital tools and the time to review the more complex issues that could arise.
Finding a Carrier Partner with the Right Tools
Because AmTrust took the time to review and assess its digital tools, the company is already making waves in digital transformation for its broker and agent clients.
“As things stand, for workers’ compensation, AmTrust is a market leader on digital distribution. We have 30-plus live integrations with agents and brokers of all shapes and sizes,” Sangal said. “For the past two years, we have been developing and building out our core line, which is our workers’ compensation line, and have made that product and the decisions for that product available to the market via an API integration.”
But that isn’t all. Because AmTrust has the framework built, the team is thinking about other lines where digital innovation can be a standout.
“AmTrust is actively working to digitalize other commercial products including BOP, Package, Cyber and other specialty lines.”
AmTrust is positioning itself to be the most innovative carrier in the business to meet the needs of their agents and brokers to build other lines of business.
“No matter if you’re a broker, agent, wholesaler or a national agent, we are building toward being your most efficient carrier with industry leading products and services,” said Sangal. “AmTrust has the products and tools to make your portfolio grow profitability. We are the agents’ carrier of choice for small and mid-sized commercial P&C businesses, not only based on our robust products and services, but also by having the ability to bring those products to market in an innovative matter.”
To learn more, visit: https://amtrustfinancial.com.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with AmTrust Financial. The editorial staff of Risk & Insurance had no role in its preparation.