How future technology will help brokers, not replace them

In a future characterized by “the trillion-sensor economy,” data will become the foundation of broker innovation, an insurtech innovator said Monday at the 2018 Top Broker Summit, hosted by Canadian Underwriter in Toronto.

To prepare, brokers need to build strategies right now for capturing and using data in their systems, speakers at the summit urged. And they need to plan for the looming interaction between humans and machines. 

In other industries, artificial intelligence (AI) is already learning from reams of data generated by sensors, said Andrew Lo, an insurtech innovator and former president and CEO of Kanetix Ltd. In the upcoming world of “hyper-connectivity,” 26 billion devices are projected to be connected to the internet by 2020. And the average home with two teenagers is anticipated to own roughly 50 internet-connected devices by 2022.

All told, the AI market is projected to be valued at $36.8 billion by 2025, said Amber Mac, a speaker, writer and national best-selling author.

With so much data available, successful insurers and brokers will be able to parse through information gleaned from sensors built into homes and cars, allowing for a better segmentation of risk. And consumers will have different expectations of their insurance brokers as a result.

“With all of these devices working together, consumers are going to start to expect personalized products and services based on the data they provide,” Lo said. “We live in a world that knows your needs before you do.”

How will brokers collect such data to provide advice? Nine out of 10 customers nowadays will not engage with a brokerage’s online contact form unless there is something in it for them, noted Top Summit speaker Daryl Keezor, founder and CEO of Candybox Marketing.

“When we take a look at where [online contact with consumers] goes right, nine out of 10 Canadians use customer value forms,” Keezor said. “If I give you my data, you give me something in return. Give me a quote, give me a callback, give me a PDF, give me an e-book, give me an enter-to-win – give me something, because I know my information is valuable for your company.”

Using this data, brokers of the future will effectively become educators. Their real-time advice will help clients cut through the information overload and provide tailor-made solutions. Customers are now doing most of the information-collecting on their own. Lo noted that 74% of consumers still want to talk to a broker, but at the end of their self-learning process.

Once the informed consumer comes to the broker to ask questions, that’s where the value of the broker will shine, said Ramona Pringle, director of Transmedia Zone, and associate professor in the RTA School of Media at Ryerson.

“Given all of the sensors that people have in their homes, [that information helps the broker] to be an advisor in real-time and use this information, not as a displacement of the person in the process, but just to enhance the way that you [as a broker] communicate with people, where you have domain expertise. Your understanding of what questions need to be asked will be the big differentiator.”

As machines start to slice and dice the data into meaningful patterns, Mac said brokers will need to start thinking strategically for “an inevitable human-machine partnership.”

But that doesn’t mean machines will displace all of the jobs in the brokerage, Lo said. “Automation that eliminates a human from a task does not necessarily eliminate a human from a job.”

Ultimately, Ramona said, the narrative about technology needs to change.

“It all ends up feeling very exclusionary, right?” she said. “The future is going to be designed by coders, programmers and engineers and that everyone else is going to be out of a job.”

Not so, Pringle countered.

“We need a massive shift in the way we talk about technology and the future, because ultimately we are the ones designing it, we are the ones buying it, we are the ones using it,” she said. “We are the ones in control, but the narrative is quite often that we are losing control; that things are spinning out of control.”