What Skills Are Most in Demand at Brokerages?

Traditional skills like customer service, communication and business development remain the priorities, according to the Insurance Institute’s latest demographic research study

Brokerages are not immune to the two key forces that currently have an impact on Canada’s P&C insurance industry: technology-driven change and consumer-driven change.

Customer experience is becoming the key brand differentiator in a customer-service world where there is little differentiation in product or price. Consumers expect businesses to anticipate their needs and solve their problems, by providing an experience that includes:

  • simplicity (e.g., one-click shopping);
  • speed (e.g., 24-hour access and quick delivery);
  • transparency (e.g., clear, relevant information about a product’s features);
  • customization (e.g., tailored services designed for the digital age);
  • price (on top of that, the price must still be right)

Online price aggregators, increasingly, are enabling consumers to bypass traditional brokers in favour of web-based product and price comparisons, and robo-advisors are expected to automate insurance advice.

Brokers around the world are concerned that direct-to-consumer channels are eroding, or will erode, the value proposition of traditional brokers. Half of the Canadian insurance executives surveyed for the Insurance Institute of Canada’s 2017 executive survey envision a high degree of disruption in distribution/brokering over the coming five years. Interestingly, C-suite respondents were more likely to envision disruption in distribution/brokering than other respondents: they ranked distribution/brokering second only to information technology (IT) among the areas that would experience the most disruption going forward.

Brokers will need to reposition customers at the core of their business models to preserve their relevance and not be perceived as redundant. In the Insurance Institute’s emerging issues research report, Sharing Economy: Implications for the Insurance Industry in Canada, Rachel Botsman, a sharing economy expert, identifies “four characteristics of industries ripe for disruption: complex experiences, broken trusts, redundant intermediaries, and limited access.”

“It is unlikely that brokers will completely disappear,” writes Michael Burt, executive director, economics, at the Conference Board of Canada in the Insurance Institute’s forthcoming report, A Changing Workforce: Implications of Technological Disruption for the P&C insurance industry in Canada. “Instead, brokers will need to reassess their value proposition within the industry’s evolving value-chain. The extent of disruption facing brokers will depend on how they adapt to change.”

Adapting to consumer-driven change

Given their direct-to-consumer relationship, the broker of the future will need to simplify the insurance-buying experience for, and build relationships with, their clients.

Connecting with customers more frequently than has been the prevailing practice will be necessary. Connecting only when the policy is due for renewal or when a claim is made will, generally, not add value or build loyalty. These kinds of limited interactions with clients are a key reason why price shopping is so prevalent.

The key ingredient to greater customer centricity and the increasing digital engagement of consumers is customer service skills.

If traditional brokers can leverage their customer relationships to draw insights from customer data, they would be better positioned to implement strategies to improve service and product development, such as:

  • delivering customer service in an omni-channel environment,
  • tailoring products and customizing service to the unique needs of the customer, and
  • communicating the benefits of the service offerings to cultivate brand loyalty.

Superior customer service skills will be key to meeting these objectives. Not surprisingly, customer service skills are in high demand:

  • 70% of independent brokers in the Institute’s survey ranked customer service skills as most important;
  • 60% of executives anticipate a high rate of disruption in the customer service function, placing customer service only slightly behind IT on the disruption radar; and
  • 60% of organizations plan on hiring customer service representatives over the next two years (an increase over the 45% of organizations who hired customer service representatives over the past two years);
  • In addition, the top three skills and capabilities HR professionals expect to be the most important when recruiting in the future include business development and sales skills, customer service skills and communication skills;
  • independent brokers also highly valued industry-specific knowledge and experience.

“As the industry’s distribution model becomes more oriented toward direct insurance, brokers must evolve to preserve their relevance within the industry’s value chain,” writes Burt. “For them, superior customer service skills will be central to achieving that objective.”

Brokerages will not only need to become more targeted in skills acquisition, but also foster lifelong learning opportunities to ensure the continuous skill development of their workforces.

These findings on in-demand skills for tomorrow’s workforce represent just some of the many findings to come from the Insurance Institute of Canada’s decade of demographic research study on the industry’s workforce. Two Institute reports, written by the Conference Board of Canada, are to be published in September 2018: Demographics of the P&C Insurance Industry in Canada and A Changing Workforce: Implications of Technological Disruption in the P&C Insurance Industry in Canada. More information is available at: www.insuranceinstitute.ca/research.

What Do Customer Service Reps Look Like Today?

From the Institute’s report on the demographics of the P&C insurance industry in Canada, we know that the typical personal lines customer service representative:

  • is female (72%);
  • is 35 years of age; 30% are under 30
  • has worked for 2.8 years; 40% have a tenure between 1 to 5 years;
  • may work remotely at least some of the time (58%);
  • may contribute to the 12.3% voluntary turnover rate or the 4.2% involuntary turnover rate for brokerages;
  • will likely work to the median age of 65, but – given the median age profile of customer service representatives – only 14% will likely retire by 2027;
  • as a female worker, is more interested in flexible work arrangements, adequate paid time off and opportunities for part-time work than her male colleagues;
  • as a millennial, is less interested in good pension benefits and job autonomy, but more interested in full-time, permanent employment, with adequate paid time off, access to training/education, and opportunities for promotion and access to mentoring than her Gen X and boomer colleagues.

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Copyright © 2018 Transcontinental Media G.P. This article first appeared in the August edition of Canadian Insurance Top Broker magazine

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