Meeting consumer demand online blurs broker, insurer roles

As the property and casualty insurance industry works hard to keep pace with consumer demands in the online world, the line between insurers and independent brokers may be unintentionally blurred, one broker suggests.

“We are in fact on opposite sides of the same ravine,” Brenda Rose, a vice-president with Toronto-based FCA Insurance Brokers told a crowd at an event held by the Property and Casualty Underwriters Club on Thursday.

“We have different – not incompatible – objectives.”

However, as consumer behaviour changes and the demand for more information at a faster pace increases, even well-intentioned insurers may be crossing that ravine into broker territory.

“…There are very few people of the up and coming generation that aren’t whipping out their iPhones…to get information instantly,” Peter Silk, vice president of commercial lines underwriting at Aviva Canada, said during his own presentation Thursday.

Insurers need to be able to respond to that trend by offering information in new ways, such as through mobile apps, he said.

Still, meeting that trend in consumer behaviour can have unintended consequences for independent brokers.

“There’s an alarming increase in the number of broker distribution insurers seeking to communicate directly with clients online,” Rose said.

The Internet is just another form of communication (albeit faster), she said, and when insurers reach out directly to clients, they’re blurring what she calls a “previously clear delineation of customer, broker and insurer roles.”

It’s not helpful to the consumer if advice is offered by an insurer who is partisan and provides information that competes with an independent broker’s advice, Rose added. “Adding confusion to the already complex marketplace hurts all of us.”

But it’s not all up to the insurer.

“Brokers have to step up to the challenge,” she said. “We have to ensure that when a consumer wants to obtain information or communicate in an electronic form, that we deliver on the ability.”

It’s critically important that brokers and insurers try to stick to their roles to keep their delicate balance, but also discuss the challenges openly, including at industry events, Rose noted.

“When brokers and insurers get the balance right, the result benefits everyone.”