HUB International debuted a digital platform in June called VIU by HUB that lets clients and prospective clients see detailed quotes from six to 10 carriers for home and auto insurance on a digital platform, then speak with an agent if they are interested in purchasing a policy. The platform is available now for auto, home and life insurance buyers, with additional carriers being added as available. VIU (pronounced "view") will gradually extend into other lines of business, such as renters and small commercial. VIU is also partnering with businesses in adjacent industries to embed its platform within the home- and car-buying journey so customers can shop for and purchase insurance at the point-of-sale.
ITL recently sat down with Bryan Davis, a HUB Executive Vice President and head of VIU, to talk about the hybrid, agent/digital platform and its broader implications, including through embedded insurance.
I'm curious about the transition in terms of the business model, going to a hybrid model that includes digital. Could you tell me a bit about how that will work?
The key thing is to take an outside-in perspective. We all can anchor on, Hey, we should be doing what's right for the customer. With COVID, the world went digital overnight, so customers got introduced to a new way of interacting with brokers. And cloud computing advanced, literally in months, because it had to improve to make the world's e-commerce happen at the speed that people demanded.
Historically, we've forced the customer to accept mediocrity. But I'm very excited about what the future is, because customers told us loud and clear, Instead of me having to adapt to your world, which is pretty clunky, I would much rather you adapt to my world, like Amazon and Apple have. And technology is allowing us to do that.
There is still a need for an intermediary for complex transactions. Think retirement plans. Think employee benefits. So, VIU is complementary for HUB, not contradictory.
Some behaviors that took hold during the pandemic seem to be reversing, at least in part. For instance, some people are returning to the office. Do you think the customer behaviors you're seeing will last?
I would say the percentage who didn't ever want to interact with a person has increased because of COVID from perhaps 15% of customers to 30%. The percentage of customers who were a hybrid has gone from 45% to perhaps 55%. Those are the people who say, I want digital, but I want the option to pick up the phone and talk to someone, and I may even want the option to go in and see somebody face to face. That still leaves a lot of customers who want to transact with an intermediary, but I would say they are open to new ways of interacting; it doesn't have to be all in-person at brick and mortar.
The key is being adaptable, to interact with the customer how the customer wants. I don't need to call you between the hours of eight and five to talk about a simple endorsement to my policy. But if I'm talking about my second home, with a premium of $50,000 a year, or about my Ferrari or fine art, I might need to talk to you in person.
The model I've had in my head for a while about the future of work is a centaur, just with jobs becoming part-technology and part-person, rather than half-person and half-horse. First, do you agree with that thesis? Second, if you do, what kinds of things are being taken off the plates of agents and brokers so they can do the more important stuff?
I think your thesis is spot on. If keying in information to get a quote was your value as an agent, I hate to inform you, but those days are gone. Data prefill sources can pull information—we know how old the roof is.
So, the value of the agent now is providing neutral advice. One carrier may be saying, Hey, I'm 30% less, but the broker will point out that the policy is only paying for actual cash value of your roof while another covers full replacement cost.
The agent finds, I'm freed up on data entry and getting all the forms in place, so I can really give my client advice and counsel about their risk needs and their gaps. Most of our producers are so tied up with back office that they don't have much time to give advice and to really go after new prospects. But transactional insurance will be more like 75% to 80% digital, and now with an advice component at checkout and after a new-business sale. That's what I see playing out over the next five to six years.
What else do you plan for the next three to five years?
Research shows that a massive amount of business will be coming through embedded insurance, so there is a strong value proposition for a broker to be able to offer choice and neutrality at the point of sale and beyond. That's a huge growth opportunity.
If you ask my daughters, who are 15 and 13, where they bought their insurance in the future, I think the decision will be based on where they bought whatever is being insured, whether that's a home, a car or something on Amazon. So, if a broker can combine neutrality with a digital channel, that’s a very interesting value proposition that will play out.
How would that look? One of your daughters is now 25 years old, and she's buying a car. She goes into the dealership and they say, Well, you need some auto insurance. How does that get referred to a broker? What part of the commission goes to the car dealer as the finder's fee?
Let's say she'll have the choice of 10 to 20 A-rated insurers. The decision will most likely come down to ease and price. Those advancements in cloud computing I talked about will mean the insurance transaction can happen right there in the car or right as the vehicle rolls off the Carvana truck. No more of this, you call a broker, and the broker has to call the carrier, and the broker has to get back to the customer, and so on. It’s all seamless.
As for the commission, everybody is different on partnerships. If the partner gets licensed, they can get commissions. If they don't, it's a referral marketing fee. Partnerships are not new. It used to be, Hey, I got a guy, go call him. Now, I don't have to make that call.
Imagine Ford says, here are all my cars. Now, here's my insurance marketplace, with all the carriers. You pick which one you want. That's the future.
I assume the advice component will be some combination of AI, maybe provided via text, and of interaction with a person via chat or phone call, if needed?
Exactly. The question is, who's in position to be neutral and to have your best interests at heart? It's not the carrier. It's the broker.
Of course the carrier will say, You should buy me because I'm the cheapest, when you might be the cheapest because you don’t pay claims or because you reduce the amount of coverage I have. Right now, customers are finding out about issues at a claim. That's not a good thing.
Digital brokers provide a fresh perspective. You don't have to sacrifice ease to get neutral advice from a broker. You can have both. And we think that's a strong value proposition.
Thanks so much.