Commercial insurance brokers will need to have evolved into real business advisors for their SME customers by 2028 or face extinction, warns a report from the CIIs Insurance Broking Faculty.
Since it was launched in 2017, The Future of Commercial Insurance Broking report has been updated for the new year. The report, which was produced in association with accounting consultancy PKF Littlejohn and broking start-up Konsileo – analyses the present state of the UK’s SME commercial insurance broking market and looks forward ten years to how the market, and those working within it, will need to adapt and change to be both relevant and successful in 2028.
One of the key findings of the report is that most SME customers see their relationship with their insurance broker as a transactional rather than an advisory one and would, in principle, be comfortable buying all or some of their insurance products online in the future. Over half also see their broker only once a year, yet 50% said they would be willing to spend more time with a well-informed risk adviser to discuss elements of their business and the risks they face.
The study also shows that 40% of account executive and account handlers at broking firms believe their jobs are at risk from artificial intelligence and technological developments. The report’s authors, John Warburton and John Needham, predict that whilst advances in artificial intelligence will automate processes that transfer information between the client and the underwriter, the value-added element of a broker’s role should come to the fore. They suggest that if insurance brokers can see artificial intelligence to free themselves from mundane, time-consuming tasks, focus on work where human input makes a real difference, and embrace lifelong learning, they have a positive future.
However, the report warns of a skills gap that will affect the future of broking if left unaddressed. Currently many brokers are aware of a skills gap and the report looks at how traditional broking careers have developed and how these are evolving and the challenges facing both employers and employees. Entry to, and development within, broking as a profession will move toward brokers specialising to differentiate themselves and their services.
The report can be downloaded below.