In order to set themselves apart from their competition, insurers need to ensure the best customer experience possible. Louis Regimbal, a partner at KPMG, believes that they must equip their distribution networks in order to do so. In turn, brokers and financial advisors should accept the support that they would not have without the insurer’s help.
In an interview with The Insurance and Investment Journal, Mr. Regimbal said that the way insurers develop their products and the additional components they add to their lineup demonstrate the need to think more carefully about the customer’s experience. He acknowledges that large firms and large distribution networks probably have the means to attempt these things on their own. Nevertheless, if intermediaries such as general insurance brokers and financial advisors wish to be successful, it is in their own best interest to work with insurers.
Implementing these kinds of measures will allow everyone to come out a winner in the end, says Mr. Regimbal. The consumer will receive the kind of service that meets his goals, since he will obtain the product he needs, at the moment he needs it. The intermediary will benefit over the long-term from the relationship he has built with the customer. As for the manufacturer, it ensures the success of its distribution network and increases its market share of products sold.
“In insurance, the relative importance of the direct channel means that insurers relying on broker networks all have a common challenge, namely to compete on a global level against another distribution mechanism, which is direct sales. We see another trend in auto insurance, where products are treated more as a standard commodity, something one might find in a department store, and with all the segmentation that implies,” he comments.
Continuing the example, Mr. Regimbal emphasizes that there are not many distinctions between the different auto insurance offerings in the market. “Like shampoo or soap, they all do the same thing. However, they are presented differently depending on their distinguishing attributes,” he notes.
For this reason, insurers are looking more and more for marketing ability in people who have worked in other industries. “The problem is the same, no matter whether you distribute directly or through brokers. Consumers are influenced by the whole experience that they have had. The challenge for insurers in the brokerage channel is to recognize the value of their network and provide them with the necessary skills and programs that will allow them to to deliver a superior customer experience, worthy of the standards that everyone wants,” says Mr. Regimbal. He says that this example also applies to the life insurance business.
The other reality is that insurers have more resources to make this move. Mr. Regimbal says there are two factors at play.
“Insurers must clearly communicate the value of the programs and the strategic thinking they can make available to brokers, as well as the reasons why it is important to work on this aspect in the coming years. What’s more, the broker must accept that insurers can help him in this area. This means that the insurer can help the broker to segment his customer base, understand who his customers are, about their attributes, their preferences, etc., and even to change the way the broker positions himself in order to bring out those elements,” he comments.
Generally speaking, insurers will find it easier to perform this exercise for the benefit of brokers rather than the brokers doing it for themselves, simply because of the size of the different groups. “We are having the same conversations on the health insurance side: how to equip their distribution networks so that they can provide a superior customer experience, not only in terms of sales but also for the policy in force? In this case, I’m talking more about individual products. In group insurance, the question is different. The whole notion of in-force products brings with it a much more important relationship between the plan sponsors and the certificate holders. With individual products, this is less clear,” he says.