In a time where brokers and insurers alike are looking towards technology to find solutions to their pain points and to remain competitive in the market, Mr Jeremy Lee Eng Huat, Director of Consumer and Market Conduct Department at Bank Negara Malaysia said that the human touch can never be replaced.
During his keynote address yesterday morning at the 6th Asia Insurance Brokers Summit, held in Kuala Lumpur, Malaysia, Mr Lee said: “Trust is not only necessary but is also the defining value proposition of the entire broking profession. The key differentiator between a good and a great insurance broker is their ability to establish long-term valuable relationships between yourselves, the insurers and their clients.”
He reminded the crowd of 130-odd brokers, insurers and reinsurers that in the financial services sector, insurance is still not as much of a norm as banking, and that brokers are critical to closing the gap in the sector and narrowing the asymmetry of information between insurers and their clients.
Accomplishing this difficult task requires the clever use of existing and future technologies. Mr Marcellus Wong, Vice Chairman of the Board of Directors of AMTD Group, said: “The key for an insurance broker to outperform its peers is to embrace the benefits of technology, recognise areas of opportunities and establish expertise, with differentiated services. However, this requires management’s commitment to a top-down and bottom-up change to create an innovative culture and balance short-term profit and long-term viability.”
He saw that the inevitable trend is for the corporate insurance brokerage industry to keep consolidating, and that players with global ambitions will look to expand their international network, in order to provide global risk solutions, achieve geographical diversification and economies of scale. “At the same time, we also consider that the small and local independent brokers will always exist. These smaller players could potentially serve small and medium-sized enterprises well and tap into new market segments and related client education. Currently in Asia, most SMEs don’t get insurance at all or only have very primitive coverage,” he said.
Mr Robert Kelly, MD and CEO of Steadfast Group Limited, Australia, said that what will reshape broking is what the insurers are doing, likening the relationship between brokers, insurers and their clients as a mutually beneficial marriage and partnership of equals. “Insurers are moving quickly on upgrading their systems, business models, their data collection and analysis, and how they handle clients in the digital world,” he said.
He added that technologies such as artificial intelligence and algorithms will not redefine insurance, but simply analyse and dictate the risk appetites of insurers, which is what brokers need to tap into for continued success in the industry.
The summit is organised by Asia Insurance Review and co-organised by AMTD Group and Steadfast Group.