“Provided that brokers continue looking after their greatest asset, which is quite simply taking on clients’ problems as their own, they will take the right steps forward”
Plunged into a whirlwind of constant changes stemming from the digital transformation, brokerages are adjusting their services to current needs. We analyzed with ADECOSE Chairman Martín Navaz the keys that have helped intermediaries position themselves as expert consultants who meet the market’s progressively greater demands.
1. The role of a broker is changing. In recent years, brokers have been transitioning from being an intermediary/insurance provider to becoming an important business partner capable of covering much more. How would you describe the task they are undertaking?
We have considered this task to be a bellwether of brokers’ capacity for adaptation, which has been demonstrated beyond a doubt. Mediation is a special business and we cannot allow clients to be just a figure in the equation. Clients are our raison d’être. We must place them at the focal point of our concerns, and we must have the capacity to meet all their ever-growing needs. However, it is true that this contractual relationship can lead to new business diversification opportunities that some have already detected and are taking advantage of.
2. How have brokers become essential agents who provide expert knowledge? What has caused this change?
Our progression as experts is due to the market’s ever increasing requirements. We live at a time when needs arise very quickly and we have to find solutions to meet those needs. Consumers also have more and more access to resources and information. So we need to meet their expectations with solvency and agility, and, most importantly, continuity.
3. How important is it to have expert consulting in the large-risk field?
“You shouldn’t try to cover everything if there isn’t a large-scale business structure and/or you lack the knowledge necessary to properly advise your client.”
Extremely important. For risks of this type, what clients value most is an intermediary’s professionalism and quality of service and brokers are the ones with in-depth knowledge of the market, not only in terms of education but also experience. It is also their responsibility to be completely familiar with their clients, to give them the best insurance solutions from the sector’s leading companies.
4. Clients are demanding more all the time. Is it necessary to meet every need? Are brokerages ready to provide full analyses?
Brokerages must be ready to provide full analyses in the fields in which they specialize. It is what is expected of them. However, you shouldn’t try to cover everything if there is not a large-scale business structure and/or you lack the knowledge necessary to properly advise your client.
5. What work do you believe is being done on client satisfaction? Does providing support go a step further in the services of current brokers to stand out from the competition?
For ADECOSE brokerages, client satisfaction must be one of their priorities, because, as we mentioned before, consumers are increasingly demanding and value first and foremost the service quality. It is not enough just to find the best solution to cover the risk. We must provide support, anticipating future needs and adequately managing problems that can arise. This is what raises our level of customer loyalty when compared to other intermediaries.
“At present, the challenges that we face are the new regulatory requirements from the European Union, which bring greater obligations and responsibilities, as well as fierce bancassurance competition”
6. What impact does new analysis technology have on opening the international market in this process? What other factors are affecting this change?
Globalization and technology have not only changed clients’ needs, but they have also been a wake-up call in the purchasing process. We are in the middle of a generational change. In the insurance world, there are now consumers who want to purchase quickly, easily, and securely without leaving their seat. But there are also still clients who prefer more personal, one-on-one interactions. So as intermediaries, we must adapt to these two, covering both profiles. The problem is that this requires extensive resources. It is not always accessible to everyone.
7. How important is innovation?
Innovation is vital in developing new technology and reaching new users. But it is also important when designing products for the market’s new needs. There are certain products that have already become established, particularly the products that are simple and easy to manage. But there is still a long road ahead. Innovation and digitalization can also improve processes, both in the intermediary-client relationship and in brokerages’ internal management.
8. Additionally, expert knowledge –having specialist teams in every field– is becoming essential in business development. How are brokerages facing this challenge?
That’s right. As clients are better informed and more demanding, brokers’ level of knowledge must be higher. That is why large brokerages have specific departments for each risk with experts in the field. Small and mid-sized brokerages do not have that capacity. So the smart approach in this case is to “cover little and cover it well”, and specialize in specific fields.
9. What significance does education have in all of this?
Education is a key component in the insurance world, as many things come into play. In our case, as brokers, we cannot stop at standard education. We must continually educate ourselves, just like many other liberal professions, particularly when the world we know today could be different tomorrow.
“In a distant future –though not too distant– digitalization will need to be incorporated into our DNA. If not, there will be no future to speak of”
10. What is your opinion on the acquisitions/mergers of new lines of business that are underway to expand the scope of your activity? What do they bring to the sector
The new actions are the result of the new market challenges we mentioned before. These mergers/acquisitions are often due to the desire to reach a segment that they previously had no access to; for some segments, it was due to a lack of specialization, for others it was because of the difficulty in reaching them. On other occasions, the aim is simply to expand geographically and/or grow business volume.
These agreements intensify competition and make it significantly more difficult for a small brokerage to survive. Regardless, the brokerage field continues to be divided into considerably small parts.
11. How do you think the role of a broker will evolve in the coming years? What challenges are being faced?
Provided that brokers continue looking after their greatest asset, which is quite simply taking on clients’ problems as their own, they will take the right steps forward. Consulting, professionalization, efficiency, independence, and the capacity to adapt to new times make us, and will always make us, the most attractive option.
At present, the challenges we face are the new regulatory requirements from the European Union, which bring greater obligations and responsibilities, as well as fierce bancassurance competition.
12. And in a more distant future?
In a distant future –though not too distant– ,digitalization will need to be incorporated into our DNA. If not, there will be no future to speak of.
Martín Navaz is an industrial engineer with a degree from ETSEI Barcelona. He completed the IESE Executive Management Program at IESE, and he is a licensed insurance broker. After holding the position of Director for Catalonia at La Estrella Seguros, in 1990, he became a founding member of Grupo CONFIDE and Chairman & CEO of Confide Correduría de Seguros y Reaseguros SA. In 2005, he was appointed chairman of ADECOSE (Spanish Association of Insurance Brokerages), a position he accepted again in April. And he is a BIPAR member. Since 2018, he has been a Member of the Insurance Advisory Council of the DGSFyP.