How is the reinsurance broker landscape evolving? | Insurance business America
As the market consolidates, the role of the broker is changing
reinsurance
By Mia Wallace
“How is the brokerage landscape developing between tradition and innovation?”
A recent panel discussion during the Insurtech Insights Europe 2024 conference focused on understanding why and how the re/insurance broker landscape is changing. Given developments in technology, data, competition and regulation, Oriol Gaspa Rebull, head of UK real estate analysis at Aon Reinsurance Solutions, pointed out the interesting timeline of developments.
“About five or six years ago the entire brokerage landscape became extremely nervous [about] “Insurtech startups thought things would be completely different and we would all be out of work,” he said. “I think we’ve become a lot smarter and have a lot more knowledge about what’s needed.
“The interesting thing is that people from insurance companies to brokers to reinsurers to corporate customers now have a much better idea of what they need and what kind of technical solution they are looking for to solve this problem. And we had to adapt to that.”
How brokers are changing
Cecilia Sevilliano, head of strategic partnerships at Swiss Re, explained how the brokerage landscape is changing from a reinsurer’s perspective, saying there are several dynamics driving the evolution. The first theme, she said, is consolidation, where larger brokers acquire smaller brokers with significant footprints.
She said brokers are also moving into advisory services and providing analysis. Brokers not only focus on placing risks, but also significantly expand their range of services.
The third theme is the data restructuring happening across the industry. This is a fairly new development and means brokers are now buying more data, structuring that data and building their own assets.
Panel moderator David Clamp from Camelot Network played devil’s advocate and questioned whether brokers were ultimately only interested in commissions and achieving GWP. In response, Gaspa Rebull emphasized that while commissions are very important, developments in the market show that brokers are focused on finding different ways of doing business.
“Instead of just focusing on and maximizing the transaction, [it’s about] how to help my clients and grow with them as they grow,” he said. “And that is a very crucial change. This means you can make better use of your data and the way you use it [differentiate] Your data from the competition, when you all have the same numbers… That alternative view is what informs customers, and therefore customers trust you to do business with them.”
As a reinsurance broker, he said, the best value is to get closer to the reinsurer and the customer – a relationship based on transparency. Much of this work is driven by underlying data analytics and the new technologies that help reinsurance brokers maximize the use of this data.
How broker relationships are changing
With so many developments in the brokerage landscape, the relationship between the broker and the reinsurer is also evolving, said Gaspa Rebull. While the broker has traditionally been seen as a transactional vehicle, the new advisory component of its practice now means it must focus on increasing the trust of its clients. This means providing the best possible advice and understanding that it is no longer just about the transaction itself, but also about helping buyers actively manage their risks.
“Until now, you could see an agent as someone who comes to your door and tries to sell you a shovel and constantly pressures you,” he said. “As we come to the door now and say, ‘Do you have any holes you need to dig?’ Because I have the tools to help, and if you don’t have holes to dig, I’ll keep going. It’s just a different perspective.”
Sevillano emphasized that the role has become more complex. It is no longer linear, she said, and on the one hand reinsurers have a lot of data, models and platforms, but for some time they have also been offering insurance and customer advisory services and analysis to their customers.
“So it’s interesting because on the one hand we’re collaborating and on the other hand we’re competing,” she said. “And it’s fair competition because we know each other and we respect each other, and so we’re trying to find that win-win spot. Today, brokers have become customers of reinsurers. You buy our tools, our licenses, our platforms, maybe even some data.
“We are co-creation partners. So we are combining our skills, our knowledge and our financial strength to bring something truly innovative to the market. Finally, some brokers become distributors and resellers of our solutions. It’s really interesting because it’s an ecosystem with dynamics in all areas [sides]. We work well together and trust is of course the first step – but once we get to that point and identify the sweet spot, it’s powerful.”
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2024-03-28 15:48:01
www.insurancebusinessmag.com
