The pandemic has underlined the importance of investing in technology and the need to re-engineer internal processes to meet client demands.
The COVID-19 pandemic has accelerated digital transformation across sectors as businesses have had to adapt in order to survive. “We have realised, now more than ever, the importance of investing in technology, and the corresponding need to re-engineer our internal processes to meet future client demands,” said Kay International AMEA managing director and CEO Walid Sidani.
“Our industry has had to deal with the impact from the lack of appropriate investment in innovation and technology. Such an investment would have enabled the reinsurance broking industry to work remotely in a seamless and uninterrupted manner,” he said, adding that the global health crisis has made it a real challenge for the sector to cope with the traditional way in how it delivers its products and services to its clients.
Mr Sidani believes that companies in the region which have made early investment in technology have fared better than others. Investing in the right teams is just as crucial, he said. “An important lesson that reinsurance brokers should have learnt is that we need to invest in the right teams and empower them with the right technology tools and KPIs to prepare them for the next crisis.”
Medium-term projection
In the next 6-12 months, Mr Sidani expects the sector to witness a rapid shift in areas such as broking interactions, self-service platforms, team dynamics and investment in FinTech enablers.
He said, “Brokers, accustomed to in-person interactions, are rapidly recalibrating to provide uninterrupted service to clients who may be facing severe health or economic challenges. Brokers have had to adopt a more flexible mindset to continue nurturing relationships with prospective and existing (re)insurance clients. The pandemic has forced us to become more comfortable around digital and remote interactions, which will probably become the new normal at least in the medium term.”
Client demand for self-service platforms in the current environment has accelerated the importance of digital adoption. The expansion and improvement of the customer journey through self-service tools will be an area of focus, he said. “Having a self-service portal is no longer enough. Both brokers and reinsurers have to do better in offering user-friendly and reliable customer service portals for the satisfaction of all stakeholders.”
When it comes to team dynamics, Mr Sidani said reinsurance brokers have now shifted to team-based achievements instead of the traditional KPI that tends to promote individualistic behaviours. This is to ensure that a diverse team with different skill sets and product expertise can better serve rapidly changing customer expectations.
Lastly, reinsurance brokers can expect to reap the benefits from investment in digital distribution, Mr Sidani said. This will increase resilience should there be a prolonged or multiwave crisis, enabling faster response to customer and agent demands, and increasing broker productivity.
He said, “Reinsurance brokers should proactively identify gaps in their distribution ecosystem, as well as potential partnerships and acquisitions that could offer avenues to new digital customers, new product types with greater emphasis on cyber, medical and life insurance – and perhaps even an extended business interruption product – focusing on geographic spread.
“I anticipate M&A dynamics to accelerate and I expect to see some deals occurring before the end of this year, particularly in the GCC. This will not be limited to reinsurance brokers, but also direct insurance companies and retail insurance brokers.” M