,30th September 2022
Jonathan Forster, SME Distribution Director for Travelers Europe, shares why it’s key to find – and be – the right partner
In a changing insurance market, it’s more important than ever for insurers and their broker partners to be able to work collaboratively to meet clients’ needs – and for those clients to know they are getting the best solution they can. Schemes partnerships can be key to this success.
Schemes are useful to brokers and insurers alike because they build a foundation for sustainable, profitable growth. They help an insurer to firstly access new markets and channels of distribution than would otherwise be possible; and secondly, to partner with brokers’ expertise about specific business segments or markets.
Brokers can use schemes partnerships to develop a superior value proposition for both existing and new clients. At a time when options for cover can be more expensive or restrictive, a scheme enables a broker to offer a differentiated proposition tailored to client needs. And partnering in a scheme also allows brokers to demonstrate deeper expertise about a sector.
Schemes can give brokers that competitive edge – providing control, reducing transactional cost to insurers and offering service differentiation. In a collaborative partnership, brokers can access the insurer’s expanded resources, including enhanced marketing and training support. Their book of business becomes less volatile than it would be if it were underwritten individually, which sets the stage for improved retention. A schemes partnership takes a long-term portfolio approach to developing both the scheme and the broker’s vision, considering aspects ranging from product to pricing. These benefits create the conditions for profitable growth.
Schemes are evolving right now. The pandemic has heightened our reliance on technology – and schemes are reflecting that in a number of ways. They are utilising third-party data more heavily to drive underwriting and sales. Brokers are using the technology to help widen their client base. We expect to see increased e-trading in the future, and schemes are a natural growth area for this because they allow brokers to focus more on clients and less on negotiating each cover point. This helps brokers and insurers minimise administrative tasks, and more easily respond to simple underwriting queries, saving time per policy.
On the product side, schemes are well suited to protecting the emerging technologies that have taken off during the pandemic. They have a history of offering bespoke options for emerging inventions: non-fossil fuel vehicles, drones, micro-tech and artificial intelligence are all technologies that may be unable to secure traditional cover and can benefit from the expertise schemes offer. Schemes allow for modular product design that offers greater flexibility across client segments and for the packaging of products in one easy-to-service offering – a trend we’re seeing across the market overall.
Of course, schemes are only as strong as the partners comprising them. To find the right match, it’s critical to do some research up front. Partners must trust each other, understand everyone’s role and have a shared long-term vision and goals to ensure the success of the business. When that happens, the client, broker and insurer all win.