What brokers should consider when looking at insurtech offerings

Brokers looking for a relatively cheap way of upping their game online should check some of the hundreds of insurtechs on the market, but it’s important to know what those insurtechs do and do not provide.

If you are a broker shopping for technology offered by insurtechs, you have something on the order of 1,000 options on the market, suggested David Kerr, Kitchener, Ont.-based technology consulting partner for Deloitte Canada.

“A number of these solutions [available] right now are appealing because of the low cost of acquisition, and the fact that they have functionality that is relatively inexpensive to implement,” Kerr said in an interview.

Online quoting is just one example of a function offered by some insurtechs.

‘The challenge is on a number of fronts,” said Kerr. First off, it’s not so much understanding what the insurtech solution might provide, but more what it doesn’t provide, compared to a traditional broker management system.

“If I am doing quote and bind, with an insurtech as an example, can I do the billing part or not?” Kerr said. “What kind of client management is included in that? In what form is the data, such that I can get it to the insurer? A number of questions around integration and scope of functionality are important to consider as they go down this path.”

Some brokers might want to use technology from two or more insurtechs offering different pieces. “That might be okay, but the more integrations that you are doing, and the more that you are trying to put things together, the more the problem becomes beyond what a typical [managing general agent] or brokerage can do,” said Kerr.

“The opportunities are marvelous for brokers to consider how to increase the amount of capabilities they have in-house through the use of discrete insurtech solutions, and they shouldn’t have to shy away from that. But they do have to do their due diligence around the scope, the functionality, and the benefits they get from that.”

Canadian Underwriter asked Kerr whether he has noticed a trend in brokerages either buying – or thinking about buying – companies that develop their own software and services for insurance.

“There is a lot of activity going on right now in the brokerage community as it relates to insurtechs,” but much of this activity comes from using what insurtechs offer rather than acquiring insurtechs outright, said Kerr.