What`s the point of brokers in a world of (dis)aggregation?

What’s the Point of Brokers in a
World of (Dis) Aggregation
Some comments on the value add, the power and the
profits from the players in the UK Personal Lines
Insurance marketplace
Martyn Green, BGL
10th June 2014
Introduction
16 June 2014
Who am I?
16 June 2014
3
Who is BGL?
Intermediated
Businesses
Legal Services
CTM
Brand-led
Businesses
Group
Support
Functions
and Coral
Services
16 June 2014
4
16 June 2014
5
Questions
Comments
Expressions of individual views by members of the Institute and Faculty
of Actuaries and its staff are encouraged.
The views expressed in this presentation are those of the presenter.
While graphs and numbers shown are designed to be directionally
correct they have been loosely drawn from a range of sources, and
cannot necessarily be relied upon for any purpose whatsoever.
16 June 2014
6
The Industry Model
A way to view the competitive landscape
16 June 2014
The Wheel-making industry in 4000bc
Source: www.cavemenworld.com
16 June 2014
8
Snapshot of the Wheel making
Industry of Mesopotamia in 2724bc
• Trees are plentiful
and pretty well
anyone can go and
help themselves
• Wheel making was
the hot place to be
20 years ago and
hundreds of
teenagers had
trained up to be
wheel-makers
• Cart makers have
been the poor
relations for a long
time now, but with all
the talent going into
wheel making for so
long, there is now a
shortage.
• There’s big
demand as carts
are being used for
transport as well
as by the military.
Guess who makes most money?
Images Source: http://www.thelivingmoon.com/43ancients/01archives/Ezekiels_Story01_files/fig5.jpg http://www.israel-a-history-of.com/images/sumerianwheel-and-ancient-egyptian-four-lobe-pinion-pulley-21605682.jpg
16 June 2014
9
Snapshot of the Wheel-making
Industry of Mesopotamia in 2724bc
Images Source: http://www.thelivingmoon.com/43ancients/01archives/Ezekiels_Story01_files/fig5.jpg http://www.israela-history-of.com/images/sumerian-wheel-and-ancient-egyptian-four-lobe-pinion-pulley-21605682.jpg
16 June 2014
10
Snapshot of the Wheel-making
Industry of Mesopotamia in 2723bc
Images Source: http://www.thelivingmoon.com/43ancients/01archives/Ezekiels_Story01_files/fig5.jpg http://www.israela-history-of.com/images/sumerian-wheel-and-ancient-egyptian-four-lobe-pinion-pulley-21605682.jpg
16 June 2014
11
The UK Personal lines marketplace
Who are the key players in the UK
Insurance market?
16 June 2014
The key players in the UK Insurance
market?
•
•
•
•
Re-Insurance
Companies
•
•
Day to day insurance risk taking
Admin
Claims Management
Distribution
Insurance
Companies
Extreme insurance risk
taking
Capital provision
16 June 2014
Brokers
•
•
•
Distribution
Persistency Risk
Relationships
•
•
Marketing (Marketing risk
taking)
Distribution
Customers
Aggregators
•
•
•
Buying
Renewing
Claiming
13
Re-Insurance
Companies
Insurance
Companies
Brokers
Aggregators
Customers
Who else makes money from
insurance?
• Data Suppliers
• Claims handlers
• Media Suppliers
• Legal services
And who else
has power?
• The Regulator
• Customers
• Distribution Owners
• Toy/Pen makers
• Body shops and their suppliers
16 June 2014
14
The model
Re-Insurance
Companies
Insurance
Companies
Brokers
Aggregators
Customers
Retailers /
Brand owners
Claims
Handlers
Media
Suppliers
Body Shops
etc
Regulators
Data Suppliers
Legal Services
Toy/Pen
Makers
16 June 2014
15
It’s a jungle out there!
16 June 2014
16
An analysis of the history
16 June 2014
Snapshot in 1990
ReInsurance
Companies
Insurance
Companies
Customers
Brokers
Claims
Handlers
Body
Shops etc
Retailers /
Brand
owners
Legal
Services
Data
Suppliers
Media
Suppliers
Regulators
Toy/Pen
Makers
16 June 2014
18
Snapshot in 2000
ReInsurance
Companies
Insurance
Companies
Customers
Brokers
Retailers /
Brand
owners
Claims
Handlers
Body Shops
etc
Regulators
Legal
Services
Data
Suppliers
Media
Suppliers
Toy/Pen
Makers
16 June 2014
19
And today
ReInsurance
Companies
Insurance
Companies
Brokers
Customers
Aggregators
Retailers /
Brand
owners
Claims
Handlers
Media
Suppliers
Body Shops etc
Data
Suppliers
Regulators
Legal
Services
Toy/Pen
Makers
16 June 2014
20
What’s the Point of Brokers in a World
of (Dis) Aggregation
• Working in partnerships across the industry
• Enabling specialisation to create a more efficient end to end
business model
• Closer to the customer
• Better customer service
• Deeper customer choice
• Best Data partners in the market
• Unique insight and data
• Most capable of working with a brand that wants a broad
footprint
16 June 2014
21
What next?
ReInsurance
Companies
Insurance
Companies
Brokers
Customers
Aggregators
Retailers /
Brand
owners
Claims
Handlers
Media
Suppliers
Body Shops etc
Data
Suppliers
Regulators
Legal
Services
Toy/Pen
Makers
16 June 2014
22
The self driving car
?
16 June 2014
23