001: The Future of The Insurance Industry & Lessons Learned - by Peter Cullum

On today’s episode, we’re excited to be talking to  Peter Cullum, CBE, an icon of the industry whose work has significantly shaped the modern consolidator market. In this fascinating conversation with Boston Tullis’ Sarah Myerscough, he discusses the implications of digitization for the insurance industry in years to come, and how you can adapt your business to ensure that it continues to thrive and grow in spite of potential economic challenges to come.   Learning Objectives   Evaluate how your business can employ the technology which has revolutionized the industry over the past decade, and will continue to do so at a rapid pace throughout the next.   Sustaining a high retention rate: There needs to be regular, consistent contact with customers, providing useful information which maintains a strong bond. Peter provides the analogy of an announced flood alert; an insurance company could employ this as a means of strengthening that broker-customer bond by providing useful information for dealing with that situation and its potential ramifications.   However, is this problematized by the digitization of the vast majority of all the correspondence that takes place in the industry? Does this sever the relationship? Peter notes that for the most part “the relationship can be, and in most senses is [already] digital. We use text, we use LinkedIn, we use all sorts of different communication mediums to get to our clients… We are now using much more digitally-driven claims processes to give more control to the client so they can see, effectively, where that claim is in terms of the process, and making sure that we can provide a very, very, where possible, swift response to all aspects.”   Therefore, the various forms of digital communication available provide a means to sustain a consistent and mutually beneficial relationship between broker and customer. Peter emphasizes that contact must be maintained with this customer, to ensure that the relationship it creates is not diminished. A sense of locality is important, particularly in the SME market, and the provision of local contact, even if it is purely through digital means, may be profoundly useful in retaining a strong annual customer base.   Peter suggests that using the digital platforms available will soon become quintessential for a business’ survival, irrespective of its size. Engaging and interactive websites, coupled with a consistent use of social media can reaffirm a customer’s confidence in the business.   Top tips for provincial brokers: Peter emphasized the paramount importance of specializing, particularly given the competitive nature of the marketplace. Identify a niche which you excel in, and make that central to your business. By contrast, taking on the major insurance companies with a generalist approach is almost fatalistic, as ultimately, you will be competing on price.   Key Takeaway The digitization of the market is an inevitable process. In order for your business to remain competitive, it must employ the available technologies to retain regular contact with existing customers while also building solid relationships with new customers. If the business is an SME, specializing in a niche area will likely prove fruitful so as not to compete on price alone with larger companies.   Best Moments/Key Quotes   “There'll be winners and losers. And the winners will be those who actually adapt to all the changing behaviours,and embrace AI and machine learning so that they can clearly differentiate themselves from the also-rans.”   “The broker-insurer dynamic is such where there should be much more working together.”   “If you ever look at lifetime value of products that then clearly your existing customers are potentially more important than your new customers, which isn't always reflected in the pricing in our marketplace, where the, the obsession with new sometimes seems to sort of create, in my opinion, an illusion in relation to how you should be positio