The Real Reason Your Brokerage NEEDS to Modernize

Steve firmly believed their brokerage’s 5-figure investment in the latest software program, now with AI integration, would lead them well past the production goals set forth by their regional office. In fact, his confidence was so high that when his lead marketer asked how this wonderful new technology was going to help, he smiled and replied, “I’m not entirely sure, but they say this is the best solution in the marketplace today!”

But nothing changed.  

Sales remained stagnant, and instead of boosting office productivity, his staff became burdened with learning new software. The expected results never materialized, and Steve now had the uncomfortable task of explaining why his office wrote a check with so many zeroes on the end. So, what could’ve our broker leader done differently? 

Begin with the End in Mind

Steven Covey’s book, The 7 Habits of Highly Effective People, was published thirty-five years ago. With over 40 million copies sold, you’d be hard-pressed to find anyone in the business world who doesn’t consider it a must-read. While it was written before the digital era, his habits ring true as loudly today as ever. 

The commercial insurance landscape is shifting toward truly digitized, integrated technologies. Increased competition, evolving client demands, and the rise of InsurTech startups are forcing traditional brokers to adapt or risk being left behind. The allure of cutting-edge technology can be strong. Yet, many brokers fall victim to "shiny object syndrome," implementing solutions without first clearly defining the problems they need to solve (just like our friend Steve).

This article challenges broker leaders to move beyond a technology-first approach. Instead, we propose a framework for modernization that prioritizes identifying core business challenges and then leveraging technology to address them effectively. In other words, when it comes to deploying technology, begin with the end in mind.

The Cost of Inertia

Most brokers inherently know that failing to modernize has significant consequences. Manual processes, rife with errors and redundancies, significantly impact efficiency and productivity. For context, a 2023 McKinsey report found that brokers with outdated technology experience 30% higher processing costs than their modernized counterparts, equating to real dollars lost in profitability. 

Beyond internal inefficiencies, the lack of digital tools leaves brokers unable to meet the ever-growing demand for a seamless client experience. Today's commercial insurance buyers expect real-time access to policy information, self-service options, and data-driven insights. Without the technology to deliver on these expectations, brokers risk losing clients to competitors who offer a more digital experience.

The financial impact of falling behind the curve can be devastating. Accenture found that brokers who fail to embrace digital transformation could face a potential revenue decline of 15% within just two years. More worrisome is the knowledge that the gap will widen exponentially as artificial intelligence takes hold, touching every corner of the industry, from underwriting to claims, marketing to customer service.  

From Problems to Solutions: A Framework for Modernization

The key to successful modernization lies in a clear understanding of your brokerage's current state and future aspirations. Before diving into specific technology solutions, broker leaders must take a step back and ask critical questions:

• How can we improve data management? Accurate and accessible data is the foundation for effective risk management and client insights. A culture of data integrity has never been more important. 
• Where are bottlenecks slowing us down? Identifying inefficiencies in areas like policy quoting, renewals, and claims processing can highlight areas ripe for automation and potential cost savings. 
• What benefits can data analytics provide? Analyzing historical data can help brokers identify trends, predict risks, and tailor solutions for specific client needs. For more brokers, however, proper analysis is difficult with data locked up in monolithic software systems. 
• What does an ideal client experience look like? Imagine a seamless journey for clients, from quote requests to claims resolution.
• What do our clients dislike about the current experience? The importance of renewal business can never be overstated. Conducting client surveys and feedback sessions can reveal pain points and areas for improvement.
• How will a modern approach change our business model? The insurance industry has a habit of doing what it has always done. Modernization may open doors to new service offerings and revenue streams. 
• What processes can be streamlined for greater efficiency? Finding repetitive tasks that can be automated frees brokers to focus on more strategic activities.
• How can we improve relationships with insurers and carriers? Streamlining communication and data exchange with insurance brokers, companies, and carriers can save time, reduce errors, and improve service levels.

By answering these questions, broker leaders gain a clear understanding of their company's needs and opportunities. This allows you to develop a targeted modernization strategy that leverages technology to address specific challenges and, more importantly, deliver tangible benefits.

Modernization for a Superior Client Experience

When implemented strategically, technology can revolutionize the broker-client relationship. Avoiding shiny object syndrome and identifying the outcomes you wish to see allows brokers to evaluate digital solutions objectively. 

As we know, there are a myriad of technological solutions available to us, and new solutions appear seemingly every day. With so many options available, along with so many newly identified opportunities from our framework for modernization, it can be difficult to choose where to begin. 

While brokers must select the most appropriate path for their organization when it comes to digitizing, the following three technology improvements have proved to provide the largest payoff with the least amount of risk. 

1. Online portals provide clients with 24/7 access to policy information, certificates of insurance, and claims filing capabilities.
2. Data analytics can be used to identify potential risks within a client's business and develop proactive risk management strategies.
3. Automation of repetitive tasks like data entry and policy renewal processes can free up brokers' time to focus on providing personalized client service and strategic advice.

Of course, brokers who truly have a sense of where they see their firm in the next 5 to 10 years should be exploring the latest cutting-edge technologies that align best with their objectives. 

Now is the Time

Modernization is not simply about acquiring the latest technology. It's a strategic approach that prioritizes solving real business problems and enhancing client value. Ask the right questions, develop a clear vision, and leverage the power of technology to secure a competitive advantage and ensure the long-term success of your brokerage.

If you’d like to learn more about how Highwing helps brokers and carriers leverage the power of technology, connect with us today. We would love to chat with you.