Moody’s Investors Service has reported a stable 2018 sector outlook for re/insurance brokers, citing technological integration and investment as a contributing factor due to its capacity for promoting effectiveness and efficiency, and for reducing administrative and management costs.
Although technology is already widely integrated in the sector, Moody’s predicts leading brokers will continue to update legacy systems, expand shared service platforms to reduce processing times and error rates, and develop more sophisticated analytics to aggregate and organize information.
Moody’s also expects brokers to adopt robotic process automation for all repetitive, rules-based tasks, such as synthesising data and filling out forms, which will increase accuracy and efficiency, and allow broker employees to focus on customer interaction and tasks that require human judgement.
As blockchain technology becomes more widely adopted, this will also increase the operational efficiency of brokers by providing a shared view of policy data and documentation in real time, reducing administrative and management strain.
Additionally, technology like the Internet of Things – a network of physical devices like online cameras, meters, and wearable sensors – will reduce some risks for re/insurers by alerting insured parties to problems and reducing workplace injuries and property damage.
Gradually, such technology may lead to lower premium costs, although brokers will need to collaborate with re/insurers to provide clients with these kinds of innovative, risk-reducing, and cost-saving solutions.
Furthermore, Moody’s notes that although brokers will remain integral to larger, complex accounts, emerging technologies may increasingly make their role obsolete in small commercial and personal accounts, as established and start-up insurers will more easily be able to offer solutions directly.
