How do you make it as a wholesaler insurance brokerage in 2019? The big guys are BIG, and they’ve been around for a long time. Maybe you can undercut them on commission, but who wants to compete on price? You’re not going to “out-process” them; they’ve been honing their process for decades. And you’re certainly not going to have access to more markets. They have access to all the markets.
Smaller wholesalers aren’t without options for survival, but going head to head with the big guys is going to be tough. You need to find a secret weapon through differentiation. Here are three ways that have worked time and again to help companies succeed.
1. Leverage technology to streamline operations and communications.
At the core of every good wholesale operation is an efficient workflow that delivers results. Established wholesalers nailed this years ago, but guess what? Technology moves fast, and new solutions have come to market faster than old companies can adapt.
Workflow and communications technologies for the insurance industry have arrived to serve carriers and retail agencies, but there are few new options for wholesalers beyond the legacy management systems. Interestingly, both carrier and brokerage software platforms are starting to build connectivity solutions that extend out to the wholesaler. Agent Portal from Duck Creek and Broker Buddha’s new Submission platform are great examples. These platforms help streamline interactions with carriers and retail agencies, respectively. The time saved can be reinvested into quoting and finding markets for the risk.
To survive and thrive, price is no longer the determining factor, so owners must be constantly innovating and keeping a pulse on the latest technology. In an industry plagued by administrative friction, having a technology solution that accelerates quote times is a huge differentiator.
2. Don’t deliver a five-star experience; deliver a 10-star experience and differentiate through service.
The insurance industry operates on relationships, and relationships are built on high-quality service. It’s not hard to deliver “good” service, but it’s hard to be great. The more you understand a client’s business goals and personal motivators, the better situated you’ll be to over-deliver on expectations. To be great, though, you need to have time to invest in getting to know your clients, and few things can save you time outside of technology.
The best services in practice today use a unique combination of technology-enabled self-service, layered with a personal touch. There’s no better service than one that proactively delivers exactly what you want, just before you need it (e.g., reminder services, recommendations). Technologies like that are gold because they do the thinking for you and your clients. Second best are technologies that make information available on request (e.g., portals, chat bots, knowledge bases). These self-service technologies allow your clients to get exactly what they want, when they want it, in an efficient manner—i.e., without bothering you or waiting for you to respond. When you combine technology-enabled service solutions with first-class personal touch, you’ll create a level of brand loyalty that will retain clients forever.
3. Get laser-focused on something: geography, class of business, or line of business.
To compete in a crowded market you need to get only one thing right. Even as a wholesaler, you can’t be everything to everyone if you want to stand out. You need a way to get people’s attention.
One great way of standing out is to find a niche and then become the undisputed leader in that niche. Sear it into people’s brains and build your brand on the back of it. Never let them forget that you are the best at that one thing. Whether you crush it in one geographic area or become the best wholesaler for a particular line or class of business, people will come to you for that one thing and, over time, give you permission to expand into other areas. Brand is a powerful thing. Use it to differentiate from the big guys who “do it all.”
Now is not the time to be complacent as an insurance wholesaler. In an industry that has been notoriously slow to adopt new technologies, the current rate of consolidation guarantees that at least some of the old relationships brokers have come to rely on will disappear as acquisitions continue. So whether you’re looking to increase your multiple at exit or build tools to compete, remember three keys to getting the outcome you want: new technology, 10-star service, and laser focus.