Companies that invest now to own and control the insurance distribution channels of the future will be the market’s winners, Arthur J Gallagher Australasia CEO Andrew Godden says.

“Insurance companies have invested a lot of money in technology, and we have the new players such as Coles and Woolworths using foot traffic to sell other kinds of products, including insurance,” he told the NIBA Convention in Adelaide last week.

During a panel discussion of broking leaders, Mr Godden said brokers “are going to have to be able to show what we can bring to the table – whether it’s a broad reach or innovative ideas or great advisory services. People are going to have to understand what we offer.”

He says brokers must show they add value to the insurance process.

“It won’t be enough to just clip the ticket any more. We are the advocates of the buyer, but we’ll have to justify why we should be paid for it.”

Aon Risk Solutions CEO Lambros Lambrou says it is “almost impossible to see what the industry will look like in 10-15 years, because fundamentally it’s being transformed by data analytics. The pace of change is very hard to get your head around, and that pace is only going to accelerate.

“What we can see is that those who invest in data analytics are going to make hay over the next 10-25 years.”

He says organisations such as Google and Facebook are becoming vast data repositories, and they can take advantage of that to build new business approaches.

“They have multiples of data more than insurers have. From a broker perspective, if you’d told me a couple of years ago that I’d have hundreds of colleagues in centres of innovation in Dublin and Singapore and that Aon would be spending $350 million a year on data analytics, I would have found that hard to believe.”

Austbrokers CEO Mark Searles says brokers should never forget that technology makes their businesses more efficient and gives customers greater information.

But from his experiences running a major UK retail insurance operation, he is aware people “go online to research a price and the cover they need, but then want to talk to someone”.

He says brokers “should never forget our relevance to the customer”.

“From a broking point of view, [the future] is going to be about the value proposition,” he said. “Let’s not forget the relevance of personal contact and relationships, because if we underplay that too much we will make ourselves irrelevant.”

Steadfast MD and CEO Robert Kelly told the convention brokers must educate insurance buyers about their role and the services they offer.

“If the consumer is not interested in advice, there is no role for the intermediary,” Mr Kelly said. “Technology is purely an enabler; it’s not sexy. We need to advise the customer of the future that there are different ways for risk to be placed, and different risks that can be underwritten, and different exposures and emerging risks.

“Otherwise, we’ll just be Google insurance brokers. If we don't get that message across soon, we’re going to find there’s a whole series of capital providers who will come into our market and invest in new ways to cover risks.

“And if that happens brokers will become irrelevant to the process.”