The importance of mediation is growing in the insurance sector

Companies in the insurance sector highlight the weight of the mediation channel which, in a context of digitalization, has become an even more relevant aspect for organizations.

The pandemic has given a strong impetus to digitalization in the insurance sector, which has seen how transformation has accelerated in recent years with the entry of new agents such as insurtech. For this reason, companies have focused their efforts on using technology to be more efficient and meet the digital needs of their customers. These changes have an obvious impact on users, but also on traditional insurance players such as brokers.

These professionals, responsible for providing consumers with all the necessary information and advice on guarantees, play a key role in the insurance industry. Its role remains decisive in this context of transformation, as underlined by the experts who participated in the first Observatory of Insurance Mediation, organized by EXPANSIN and the Ecofin Forum after nine years of collaboration, and carried out at the request of Madrid Capital FinTech cluster (MAD FinTech) and the Ibrico InsurTech Forum.

Decor

“The digitization of the sector has always been seen as a threat to mediation, as it was thought that it would have the same impact as the disintermediation experienced in other areas such as travel or real estate, but the result has been the otherwise,” Salvador said. Molina, president of the Ecofin Forum and MAD FinTech, as well as editor-in-chief of the magazine Seguros of the College of Insurance Mediators of Madrid.

Thus, Molina pointed out that “the complexity of policies and the need for advice have made mediators go digital. Now they are essential for insurers, but also for real estate or travel agencies”.

Along the same lines, Ricardo Sánchez, of Hiscox Spain Partnerships and Affinities, highlighted the role of “mediators as a link between the company and customers”. At the same time, digitalization has had effects that affect customers and brokers, forcing companies to completely transform. Thus, they must be prepared to provide an optimal user experience across all channels. As Sánchez pointed out, “we need to serve customers in a personalized way through the channel they prefer”.

Pedro Zabaleta, director of the Mediators channel of Aegon Spain, agreed that “the weight of mediation is very important because the business of insurance is very complicated. Mediators offer customers security and knowledge”. Regarding the digitization following the pandemic, the boss of Aegon explained that “it helped us to promote two elements: we digitized all the formalization and the selection of the risks of the policies, and we also designed new products fully digital”.

These advances in innovation will have a great influence on the future of the sector. For the moment, “we are focusing on customization according to the specific needs of each client; it is not worth offering the same thing for everyone”, assured Cristina Llorens, director of strategic affairs and communication to the Insurance Development Institute. The experts underlined the relevance of the relationship with the insured. Llorens pointed out that “in our sector, the value is given precisely by the advice. Without it, the customer is lost”.

cyber security

The transformation caused by Covid-19 has counterparts, such as the exponential increase in potential security vulnerabilities. “Cyber ​​risk has become the main cause of death for companies and SMEs: there is an urgent need to raise awareness and offer these companies cybersecurity policies adapted to their capacities and purchasing needs”, warned Salvador Molina. The president of Foro Ecofin pointed out that each SME suffers 270 cyberattacks a year and defended the importance of “ensuring its viability”.

While large companies have prepared to face these risks, “small companies are more vulnerable to any attack”, warned Ricardo Sánchez. The Hiscox representative asserted that prevention is not enough: “In addition, containment is necessary to reduce the impact of the incident and avoid business interruption, heal reputation and, finally, repair the damage. “.

Due to these factors, the demand for cyber insurance has exploded as a solution that provides peace of mind and guarantees to any business. This was highlighted by Cristina Llorens, who underlined the importance of raising awareness and explained that “cyber insurance is based on four pillars: assistance and advice in the event of a computer incident, coverage of damage due to business interruption and reputation, civil liability and the cybersecurity part. It is not an insurance to be used, but rather a service”.

In short, Pedro Zabaleta pointed out that “digitalization has accelerated, multiplying the risks of cyberattacks”. However, these covers are not easy for SMEs. The director of the Mediators chain of Aegon Spain affirmed that “advice is necessary because the SME does not simply acquire a policy, but it is necessary to carry out risk management and carry out an overall analysis”.

In conclusion, “mediation is the most important channel for insurance in Spain and Portugal”, underlined Allison Castillo, head of the Madrid Capital FinTech cluster. On the occasion of this culture shared by the two Iberian countries, Castillo alluded to the birth last April “of an alliance between the main insurers, insurtech and technology companies called Foro Ibrico InsurTech, which aims to stimulate the birth and the growth of innovation in both markets”.