Australia’s insurance brokers now believe that providing the right level of customer service is a bigger challenge than finding adequate cover for natural disasters or cyber attacks, new research by insurance technology company JAVLN reveals today.
Despite the frequency and severity of natural disasters and cyber attacks increasing in Australia, intensifying customer demands comes second on the list of significant industry challenges, according to 26% of brokers in Australia, beaten only by insurance affordability at 28%.
Third and fourth on the list respectively are increasing competition (25%) and providing cyber insurance (24%). Finding adequate cover for natural disasters, measuring an evolving risk landscape and attracting and retaining talent all come out at 23% each.
The news comes off the back of recent research by insurance giant Vero, which found that client satisfaction with brokers is at record highs, suggesting that while brokers are succeeding, they’re not finding it easy.
In fact, in JAVLN’s research, brokers admit that meeting those demands is tough. Just 28% of brokers say their clients would rate their customer service levels at least 8 out of 10, while 23% say they found 2023 a tough year for customer relationships. As a result, 24% of brokers say they would specifically like to develop their customer service skills in 2024.
This is according to a new research-led report called Brokering Change by insurance tech provider JAVLN. Using global research company Censuswide, JAVLN surveyed 500 insurance brokers working in small broking firms in Australia in January 2024, uncovering the mindset and challenges facing the industry this year.
Part of the reason brokers see customer service as such a challenge is because of how much they are being pulled in different directions by menial tasks every day, the report argues. According to the research, 70% of brokers spend over three hours per day on administrative tasks like processing and data entry, while a quarter (24%) say that adhering to compliance is becoming harder and more time consuming.
Dale Smith, founder and CEO, JAVLN, said: “The insurance industry in Australia needs brokers more than ever, but if those brokers have to fight battles on multiple fronts every day, they’re naturally going to struggle to deliver the kind of customer service they’d ideally want.
“When you look at the root cause of most productivity issues in Australian brokerages, you quickly realise it’s a tech problem. Most brokers are lumbered with old clunky technology to do their jobs, which makes managing client and policy information extremely difficult, and in turn makes customer service difficult.”
JAVLN’s research backs up Dale’s claims, with 27% of brokers saying the technology they use to manage clients and policy information is too confusing, and 23% going as far as to say that the technology currently serving the insurance broking industry is “not fit for purpose any more”.
Almost a third (30%) of brokers say that having a more modern cloud-based tech setup for managing clients and policies would be a real differentiator for their business.
Smith continued: “Technology is now more important than ever in insurance, not simply just to keep up with other financial industries, but also to help broking firms in Australia take their services to the next level.
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