Why brokers won’t be the next Blockbuster

Brokerages won’t suffer the same downfall as Blockbuster did over a decade ago, says one broker exec, because the broker channel has already begun addressing and responding to one industry blind spot — technology.

That said, there are ways that brokerages can further digitize in order to continue providing a value-add to consumers, suggests Sam Jazayeri, director of operations at PrimeService Insurance, at the Insurance Brokers Association of Ontario (IBAO) Convention in Toronto.

“Neither RedBox nor Netflix are even on the radar screen in terms of competition,” Blockbuster CEO Jim Keyes told the Motley Fool in 2008. Two years later, however, Blockbuster declared bankruptcy.

“[This is] a question I’ve asked myself many times: are we, as the broker channel, the next Blockbuster? Is there a major blind spot that we have as a broker channel that could wipe out everything we’ve worked so hard to build in a really short amount of time? And is the thing [that could wipe us out] technology?” Jazayeri questions.

“The reason I firmly believe [otherwise] is because we have a real value-add that we give to our consumers,” he says, and “technology is only going to enable us to do that.”

A tech savvy brokerage can take shape in different ways depending on your goal, says Jazayeri.

“There is no one digital broker out there, there is no one digital solution. You want to find what [role] technology plays in your business and what is your technology goal behind that. If you know your why, when you go through the difficult transition processes of adopting tech, you’ll always have that North Star.”

The upside to all of this is that all brokers are already digital in some fashion.

“Unless you use a pen and paper only, not even an Excel file, you are already digital in some way,” he says. “If you’re using email, if you’re using Excel, hopefully if you have a BMS, you’re already digital.”

However, there are tools that brokerages can add to their tech stack to take their digital efforts further. And most brokers, whether they’re aware or not, already have a tech stack in place, Jazayeri says.

Four tools all brokerages have in their tech stack include: a server where you host information, a database or BMS where you hold client policy documents, a quoting engine, and an email exchange service.

Nevertheless, process automation is one tech that brokerages can add to their stack. Brokerages should also focus on tech that reduces time wasters, like duplicate data entries. “I know most of us are probably entering the same data two or three times in our offices,” Jazayeri says.

He also cautions brokerages not to waste or overspend on their technology. “Your BMS maybe provides [a] service [that] you may be underutilizing, or there may be a really innovative new tech vendor out there that you can partner with and incorporate into your business.”

 

Feature image by iStock.com/Photon-Photos