Advanced technology will disrupt insurance broking, probably bringing continuous adaptation of policy terms rather than annual renewals – though experts agree “talk of broker demise” is unfounded.

CGU EM broker relationships Peg Vaghaye told the Insurance News technology seminar on Tuesday that the industry will become “unencumbered by legacy systems and traditional thinking” and characterised by “highly dynamic, usage-based and integrated products”.

Ms Vaghaye was taking part in a "debate", playing the role of a technology evangelist, and her comments do not necessarily precisely reflect her personal views. But they paint an intriguing picture of the future.

“Specific microcoverage elements will be available, giving customers better choice and more affordable pricing,” she said.

“Even the typical 12-month renewal cycle will be a thing of the past, as offerings consistently adapt with behavioural patterns. As a result, pricing and underwriting as we know it today will cease to exist.”

Ms Vaghaye says automation and machine learning models embedded into underwriting will “reduce the quality process to seconds”.

“This is especially true for most personal lines and small business products across life, property and casualty.

“Instead of relying on post-event analysis and historical actuarial views, data will be collated by many different sources, like devices, satellites and digital footprints. This will ... allow insurers to make you an offer of insurance presented to you based on the uniqueness of the way you live your life or the way you operate your business.”

This revolution will “dramatically” change the role of the insurance broker, she says.

“Those who are in the industry today will retire, and the remaining and emerging brokers will rely heavily on technology to increase productivity.

“Brokers will transition from being process facilitators and product educators to being a multifaceted portfolio manager. They can sell all types of products with a high degree of competency. Brokers will use smart personal assistants to optimise their tasks, as well as AI-enabled bots to find potential details for their clients.  

“These tools will enable brokers to support substantially larger client bases ...  It will unleash people to add value where they thrive: decision-making and empathy – 85% of jobs in 2030 haven't been invented yet.”

Executives from Cover Genius, QBE Ventures and Evari agreed AI posed no threat to demand for insurance brokers.

Cover Genius CEO Angus McDonald told the crowd of almost 150 professionals more automation will mean more opportunities, for example in helping to address “massive” underinsurance.

“Some people just find it too hard to buy some assets, or it’s not fit for purpose – it’s not personalised. So I think as we start to be able to create more automated solutions, brokers should be able to address a much bigger market,” he said.

“People have been talking about the death of brokers and agents across multiple industries ... Brokers give enhanced value to their clients, and as long as they’re giving value and advice ... you’re going to add massive value.”

Mr McDonald says currently unprofitable clients offering smaller premium will become viable with technology.

“At this point ... if it’s smaller, I can’t spend time on it. With automation, you should be able to have a broader set of customers that then get that level of service. The challenge as tech providers is that [we] make brokers as efficient as possible so they can actually help their clients with advice.”

Evari founder Daniel Fogarty recommended using a broker for personal insurance after making the switch from direct himself.  

“The debate is all about, are there going to be fewer brokers? I disagree – I think there are going to be more brokers because this is complex, the home insurance policy is very complex,” he said.

QBE Ventures global head of emerging technology Alex Taylor was also confident technology will not shrink the broking workforce.

“Brokers and underwriters are not going anywhere, and by being able to work with this technology in our industry, the people who do these roles today can do more business,” he said.

“We can do more accurate business. We can work with our customers more closely. Systems do a lot of the things that we traditionally didn’t like doing very much – this technology lets people be people and systems be systems.”