Brokers are facing huge challenges as they contend with shifting market forces and the growing threat of digital technologies. They need to find new ways to compete in an increasingly digital economy and become “brokers of the future”.

The insurance industry is being radically disrupted by shifting market forces and the emergence of a host of powerful digital technologies.

Brokers, long-time conduits for huge volumes of insurance transactions, are bearing the brunt of this upheaval. Throughout much of the world the broking business is slowing. The renewal of property & casualty (P&C) policies is declining and prices are sliding. Average global P&C rates have dropped by as much as five percent since 2012. Furthermore, the spread of digital technologies, which have spawned disruptive business models and new-generation platform businesses, is undermining many of the brokers’ traditional activities and opening their markets to eager competitors. Brokers’ relations with customers and carriers are increasingly at risk.

It’s clear that brokers have to change. They can’t succeed, or even survive, if they stay as they are. But, how should they respond? How can they become “brokers of the future”? Old-school methods to stimulate growth are unlikely to make the grade. Significant merger and acquisition opportunities, after several years of consolidation, are scarce. Recent efforts by some major brokers to diversify have yet to yield anticipated returns. And widespread efforts to cut costs and bolster productivity, to protect operating and profit margins, are delivering diminishing returns.


Many brokers recognize that new investment, particularly in digital technologies, is essential. But they often lack a comprehensive strategy that will enable them to transform their businesses to compete successfully in a rapidly changing industry.

A few far-sighted brokers are rising to the challenge by devising new, innovative business models. Firms such as Insureon and Simply Business are using digital technologies to capitalize on niche broking opportunities. Global brokerage Marsh has expanded its digital services by acquiring insurtech firm Dovetail.

Shifting market forces, coupled with the rapid deployment of digital technologies, are impacting the whole range of broker activities. Prospecting and customer acquisition, risk identification and funding, as well as claims resolution and pay-outs are all affected. Such severe, far-reaching, changes pose a huge threat to traditional brokers.

However, this upheaval also provides brokers with an opportunity to see how they could operate differently. It gives them a chance to work out how they can harness key digital technologies to develop new services and deliver additional value to their customers. In short: it provides a valuable pointer to becoming a broker of the future.

In my next blog post, I’ll discuss some of the important technology trends that are driving change in the broking business. It’s vital that brokers understand these trends. They’ll be the source of some of their biggest challenges in the future. But they’ll also offer a host of new opportunities for brokers to successfully transform and grow their businesses.

In the meantime, take a look at these links. I think you’ll find them very useful.

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Reimagining Insurance Distribution: Accenture Distribution and Agency Management Survey

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