Future-Proofing Your Insurance Brokerage? Don’t Start with Digitalization
Since we launched Surex in 2012, a rural Alberta brokerage whose book has grown from $600K to $62M in just six years, digital technology has always been at the centre of our story.
The ability to compare and customize multiple quotes in minutes, use e-signatures for client transactions, and get instant proof of insurance, all enabled by our Brix BMS software – these are the kinds of digital innovations that have driven our growth to date.
And yet when I hear the industry talk around digital transformation, or traditional brokers panicking that they’re falling behind, I can’t help thinking we’re putting the wrong message out there.
Brokers rushing to incorporate digital technology into their business without a clear strategy in place aren’t really setting themselves up for success. The goal isn’t to be digital. It’s to leverage digital to improve your business and differentiate yourself from your competitors.
Begin with the problem you’re trying to solve
At Surex, our first step in any new initiative is to define the problem we’re trying to solve.
When I started in this industry in 2005 we were a bricks-and-mortar brokerage, one of the smallest and most traditional in the country, in a small town of 2,300 people. It wasn’t long after that the banks started lobbying to get into insurance, and with branches on both sides of our office, we figured they would probably put us out of business.
It forced us to think about why people would choose to do business with the banks and how we could compete. We decided the online experience was the differentiator: fewer and fewer people were physically going into banks anymore because you could do your banking more conveniently on the web. We figured if we were going to survive we had to create the best possible digital customer experience ourselves. That’s how we came up with the idea of creating Surex.
Research what others are doing
From the start, research has been a critical part of our process. We looked at some US examples, since they were ahead of the Canadian market from an e-commerce perspective. And we looked at analogous examples in other industries, like travel.
Travel was an interesting comparable because there were similarities to the insurance model: people said it was too complicated and consumers could never figure it out on their own. That’s an argument we hear in the insurance industry all the time.
Then along came Terry Jones, who started Travelocity, and people start booking flights and making hotel reservations on the Internet. We decided to visit Terry at his home in Lake Tahoe, and spent a day picking his brain about his successes and failures, looking for clues on how we could adapt his experience to our industry.
Implement, assess, and learn
When we first started our digital business we thought we could just set up a website and people would start buying insurance online from us. But we quickly realized it wasn’t that easy: you needed background phone support, inbound and outbound calling campaigns, digital marketing tactics, and many other things to feed your funnel and keep prospects flowing through it.
Having a built-in feedback loop in our business development process, where we assess, learn and make adjustments until we’re satisfied with the results, has been critical to our ability to innovate. You do your research and plan to the best of your ability, but making mistakes and learning from them is a part of the process.
Solve one problem at a time, and reprioritize regularly
People talk about digital transformation but I think evolution is a more accurate term, because once you’re on a path to change you’ll discover more and more things you need to do to keep your competitive edge. The way to do that is to make innovation a line item in your budget: it’s not a one-and-done kind of thing.
We have a wish list a mile long coming from all areas of the business, from back-end processing to consumer-facing marketing tactics and everything in between. Lately it’s been about solving the billing problem in our industry, a problem we want to own and fix.
We’ve cycled through a few different solutions looking for the right technology and we’re not there yet, and there’s no shame in that. We’ll keep refining things until we get it right.
Manage change
My final piece of advice is about something that still keeps me up at night: managing change. It’s one of the biggest challenges for businesses these days.
You need to hire people who can deal with change; keep them informed and engaged so they understand the direction you’re heading. You need to find inclusive ways of managing them so they buy into and participate in your overall strategy.
Managing change is also about having agile, responsive processes in place and putting real dollars behind innovation. In the early days, innovation was literally 150% of our revenue. Today we’re in a more sustainable 35% range, but that’s still much higher than a traditional brokerage would be comfortable with. The point is that the old paradigm no longer applies here: investing in innovation is critical.
Summing up
Without a doubt, future-proofing your brokerage for long term success requires ongoing research and investment in new technologies. Digital will be the enabler of transformation (and disruption), in our industry like all others.
But if you set out from a position of fear, thinking you need to “go digital” without a clear sense of your most pressing needs, you could spend a lot of money on technology with little or no real benefit to your business.
So forget the industry talk about going digital: start with the specific needs of your business, then research the technologies that will help you solve them. Because going digital – successfully at least – is not a “one size fits all” proposition.
This article is the second of a three-part series on digital transformation in the Canadian insurance industry, produced by Wawanesa Insurance. Read article 1 for the insurer’s perspective by Al McLeod; and watch for Capgemini’s Alan Walker’s perspective coming soon.