2016 BPS Study

Brokerage Industry Perspectives How Best Practices agencies are leading the way

% of Total P&C Book of Business made up of accounts under $5,000

% of Total EB Book of Business made up of accounts with less than 50 lives

84.4%

73.2%

68.0%

59.2%

48.1% 44.4%

42.8%

37.2%

29.9%

23.7%

21.2%

14.4%

< $1.25M $1.25M‐ $2.5M

$2.5M‐ $5.0M

$5.0M‐ $10.0M

$10.0M‐ $25.0M

> $25.0M

< $1.25M $1.25M‐ $2.5M

$2.5M‐ $5.0M

$5.0M‐ $10.0M

$10.0M‐ $25.0M

> $25.0M

As the charts indicate, the smallest agencies have the highest concentrations of small accounts and are therefore  generally more vulnerable to technology disruption than larger agencies. A strategy that many firms are embracing is to  focus on writing larger accounts with greater complexity. These types of accounts tend to benefit more from a broker’s   involvement. But suddenly increasing an agency’s target client size is no small task – especially for agencies outside of  large metro areas. 

Embrace Technology 

A new generation of insurance buyers is going to expect that business will be done differently than in the past. They will  expect more and better access to information and will demand an ease of doing business comparable to what they’ve  come to expect in other realms of their lives. An otherwise outstanding insurance broker that relies on out‐of‐date  technology or methods will suffer significant brand damage. Thus, tomorrow’s successful brokerage will need to be  advanced in its embrace of technology.  There is no single answer to the threat posed to agents by Insurtech. BPS agencies must remain vigilant in assessing the  magnitude of the threats faced by technology upstarts. Wherever possible, agents need to find ways to match or exceed  the value proposition offered by the technology players, while retaining the all‐important client relationship and risk  management expertise that form the heart of the existing insurance brokerage industry. 

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