Tag Archives: peter blackmore

No, Brokers Are Not Going Away

In 1997, the CEO of a Silicon Valley company told me I should give up on being an insurance broker and look for a new job because I was about to be disintermediated. Technology would let carriers and clients connect directly, and nothing I did could stop the movement of history.

Well, I ignored his advice, and the brokerage part of the insurance supply chain has grown by a factor of 25 in the past two decades.

But many people are now warning again of disintermediation. Was my friend just too early in his prediction? Will the doomsayers be right this time?

In a word, no.

First of all, disintermediation rarely happens as rapidly or completely as the technologists tend to think, with their binary, one-zero, on-off approach to the world. There are actually many more bank tellers today than there were when ATMs were introduced decades ago and were supposed to put tellers out of business. Remember when realtors were going to disappear, as buyers and sellers connected directly? Realtors are thriving. Even travel agents are still around despite the spread of sites like Expedia. There are only about 40% as many as there were two decades ago, but they deliver more value now, because they handle more complex problems or have developed specialties, such as exotic fly-fishing vacations that few have the expertise or confidence to plan on their own.

See also: Why Aren’t Brokers Vanishing?  

Insurance is even less likely to face disintermediation than bank tellers, realtors and travel agents because, if you think finding a fishing guide in Alaska is hard, try explaining how a workers’ compensation “experience modification” is factored or how the Affordable Care Act will affect the buying public if the new administration has its way. Even though the rise of comparison sites suggests that policies are easily comparable, they are not. It takes sophistication, based on lengthy experience, to help a client evaluate his or her needs and to sort through all the carriers and policy options to find the right fit. Product, price and relationship all have to fall into the right place at the right time.

Besides, as the founder and chairman of Insurance Thought Leadership, I have a ringside seat on the startups that are providing tools that will make the broker’s role even more important than it is now. In addition to the main site, where nearly 800 thought leaders have published more than 2,500 meaty articles on innovative ideas, we recently launched the Innovator’s Edge, which is tracking the more than 725 insurtech startups. I can say with confidence that the role of the broker will broaden for the foreseeable future.

Here are just some of the companies that will help ensure that all of us brokers have a Happy New Year – and many more to come:

RiskGenius – This startup, run by Chris Cheatham, uses artificial intelligence to instantly compare and contrast policy coverage and produce a report in layman’s terms. That helps clients see what’s going on. It also helps brokers keep track of changes in policies, making back offices much more efficient — serving clients better, at lower cost.

The RiskGenius solution plays into a trend that seems to be generally missed but that will be profound, in insurance and elsewhere. While some entire jobs will be automated — look at what robots are doing to many manufacturing jobs — the broader effect is that pieces of jobs will be automated. It used to be that every senior executive had a secretary, but as typing, some answering of phones, some scheduling and so forth have disappeared from assistant jobs, the span has become one assistant for every two, four or even larger numbers of executives. The same sort of winnowing of functions will happen with brokers, because of solutions like RiskGenius’. Brokers and brokerages will take on more strategic work as they let go of the more mundane tasks that can be taken on by technology.

Refer.com, run by Thomas Gay, likewise makes brokers more efficient as we prospect for business. While social marketing and social selling have attracted so much attention, but haven’t panned out, Refer.com scours the internet 24/7 to find topics of interest to prospects and puts them in an email format. The system prompts the broker about the optimal pace at which to send the emails, providing a high-tech, high-touch approach that can build the sort of referral network that brokers crave.

Agency Revolution, whose CEO is Michael Jans, offers complementary capabilities by automating marketing campaigns — for instance, sending out emails on clients’ birthdays, as policy renewals near, etc.

Pypestream, which has the good fortune to have ITL advisory board member Donna Peeples as its chief customer officer, can greatly improve customer service for larger brokers. Pypestream’s chatbots mean that customers can text queries to brokers — a means of communication that so many prefer these days — rather than call and wait on hold, negotiate a phone tree or face some other indignity. The chatbots filter through the texts, query any and all back-office systems that have anything to contribute and answer routine questions so fast that Pypestream sometimes has to slow the response so the client isn’t tipped off that it’s really dealing with a computer. Clients are happier, and brokers offload routine questions so they can handle more substantive issues.

GAPro, where Chet Gladkowski is chief marketing officer and chief information officer, also can make brokers much more efficient by providing what it calls verification as a service. GAPro addresses the huge time sink that is certificates of insurance. These are important, because they let parties to a deal know that other parties are carrying the requisite insurance — but they’re only as good as the paper they’re printed on (or the PDFS that contain them). Just because someone can show he had insurance a month ago doesn’t mean that certificate is still in force today, when the deal is finally coming together. Brokers spend an inordinate amount of time verifying these certificates — but GAPro automates all that, so it’s possible for everyone to know in real time the insurance status of all relevant parties. Again, this means faster and better service for clients.

GroundSpeed automates loss runs and the processing of claims data, simplifying a complex, painful process and letting clients and brokers see on a dashboard all the claims they’ve made under an insurance policy.

Risk Advisor, whose founder is Peter Blackmore, helps brokers extend risk management services to small businesses. These services had previously been practical only for larger businesses, because of the expense of the work involving in identifying and mitigating an individual business’ risks. But Risk Advisor has automated the process so much that far smaller companies can enjoy the sort of attention and expertise that big clients have traditionally received. That change pushes brokers in the direction that both they and clients would like to move: The brokers will increasingly help prevent losses rather than coordinate payment after losses occur.

WeGoLook, whose founder and CEO is Robin Smith, provides arms and legs (and brains) to brokers for any sort of service. Her 30,000 “Lookers” across the U.S. are currently handling tasks such as taking photos and gathering other information after car accidents, but their work is really limited only by our imaginations, because they give us the sort of inexpensive, free-lance workforce that Uber has brought to transportation. How valuable is the sort of service that WeGoLook can provide? Well, Crawford just announced that it was buying 85% of WeGoLook in a deal that puts a $42 million valuation on this young startup.

See also: Calling all insurtech companies – Innovator’s Edge delivers marketing muscle and social connections

This list of seven companies is just the start, as a visit to the Innovator’s Edge will show you. So, my bet is that if my Silicon Valley friend and I reconvene in 20 years, we’ll see that the role of the broker has become even more strategic and has moved by leaps and bounds beyond where it is today.

Can Insurers Do More to Reduce Injuries?

The Herald Tribune in Sarasota, FL, Nov, 14, 2016 stated a number of actions that employers need to take in the light of new workers’ compensation regulations in Florida: “Effective claims advocacy, management and communication, along with robust risk management and work safety programs,” are required to follow regulations and run profitable businesses.

Regardless of jurisdiction, implementing regulations is never as simple as it sounds, and they create challenges for both employers and insurers. The primary challenges are typically cost and resources.

For Business:

Workers’ compensation is viewed as a regulatory and financial burden, with claims management being the major focus.
Actively managing workers’ compensation and the associated risk is good business practice, yet the majority of businesses (particularly small businesses) just can’t afford current risk management tools and methodologies. Internal resources are stretched, and, despite best intentions, it can be a difficult task to wade through a plethora of information to translate, implement and monitor regulatory compliance and risk management. As a result, there is often a reliance on consultants, at significant cost to businesses.

See also: Does a Safe Workplace Create Large Profits?  

For Insurers:

It is not physically possible or economically feasible to conduct risk surveys, analysis and assessments on all of the employers in your portfolio, particularly in the small- and medium-sized sector. It is also not financially feasible to offer consulting services to assist in the risk management process.

So what are your differentiators? How can you add value, ensure quality of service and further engage your clients without massive additional investment?

If a simple risk profiling tool was offered by insurers, it would significantly boost their ability to assist employers in better managing their workers’ compensation costs and impacts. RiskAdvisor has developed such a tool, which allows a business to:

  • Assess the current status of health and safety risk;
  • Benchmark performance within its industry using global A.M. Best data;
  • Identify gaps in health and safety business processes;
  • Prioritize resources;
  • Offer specific solutions to better manage health and safety risk; and
  • Facilitate continuous improvement.

The simple-to-use system highlights known industry hazards, good work/health/safety/injury management practice and what risk management controls are (or could be) in place. It delivers performance benchmarks and the ability for employers to provide their own risk ratings.

Employers seeking to understand their broader risks can even use the RiskAdvisor system to profile industry-specific insurable and business risks.

See also: Avoiding Workplace Disaster And Workers’ Compensation Costs  

This type of tool will help an employer prioritize its activities and means insurers can drive increased client engagement and deploy support more cost-effectively. Even more importantly, the tool shifts the focus away from purely reducing claims costs to actively minimizing injuries — a win/win for insurers, employers and employees.

Here’s a sample of a checklist from the RiskAdvisor system:

Screen Shot 2016-11-28 at 2.25.03 PM

Risk Management: Too Hard for Small Firms?

Surveys suggest that less than 25% of small business has any form of risk management plan beyond the purchase of insurance.

A considerable percentage of business risks aren’t insured, and, even for those that are, lack of appropriate cover and underinsurance remain a perennial issue. Most small businesses have shallow pockets, meaning the cost of a loss can often be business-ending, especially where there isn’t enough insurance or risk contingency planning in place.

Cost and complexity are cited as primary reasons for businesses not developing a risk management plan. This is hardly surprising given the range of risks an average business can be exposed to, not to mention the myriad of other operational activities necessary to run a successful business. The problem for businesses is made even more complex as some risk areas, particularly emerging risks such as cyber, may or may not be covered by a variety of different insurance policies.

See also: Risk Management, in Plain English  

Insurance carriers have vast amounts of business risk management expertise, but typically this is targeted at the larger or more complex risks that an insurer covers.

But this risk management expertise can be mobilized to customers in a cost-effective and efficient way through digital risk profiling, enhancing both the ability of a business to manage risk and of insurers to recognize active risk management in their pricing.

Until now, most of the technology supporting risk has been designed, and priced, to only appeal to larger organisations. RiskAdvisor has built a platform to enable insurers to cost-effectively mobilize their risk expertise to both enhance business best practice and form deeper relationships between a business, its intermediary and its insurer to reduce the cost of risk and boost the resilience of organizations.

Specific benefits to insurers include:

  • Risk assessment – ability to analyze business- and industry-specific risks, producing a risk profile to support better decision making.
  • Optimal insurance coverage – enabling the more intelligent matching of risk and insurance to reduce the risk of being underinsured.
  • Much greater resilience for insureds to recover from loss events.
  • Improved governance and compliance outcomes.
  • Confidence to key stakeholders such as financiers and equity providers.
  • Collaboration with intermediaries to help them become trusted risk advisers, building strong relationships with their customers and providing value-added services.
  • Ability for business partners to enrich partnerships with key stakeholders such as customers, suppliers and financial institutions.

See also: Key Misunderstanding on Risk Management  

To see how RiskAdvisor works, you can find a video here.

Here is a sample of industry- and risk-area-specific exposure and control checklist from RiskAdvisor system:

Screen Shot 2016-11-11 at 11.31.10 AM

Easier Approach to Risk Profiling

The absence of risk profiling at the point of purchase in most commercial insurance transactions globally leads to uncertainty about how much insurance is appropriate and how to structure coverage. This uncertainty greatly magnifies the extent of under-insurance and or non-insurance, which undermines the value and reputation of the insurance industry and its advisers.

Without the certainty provided by a risk profile, the divergence of interests for insureds and the insurance industry can determine whether clients are under-insured or even not insured at all. The divergent interests include:

  1. Insureds will logically try and keep premium costs down, which often affects the levels of insurance and whether to even insure. This can often result in under-insurance or non-insurance in the event of a claim.
  2. Insurance advisers and underwriters will often encourage higher limits and more coverage to give their clients (insureds) the best protection in the event of a claim, which is their primary purpose.

Digital risk profiling can greatly reduce the extent of under-insurance and non insurance, particularly for higher risks, by providing independent, industry-specific risk exposure, control and benchmarking guidance for insureds and their advisers.

See also: Improve Reputations by Digital Risk Profiling  

An extract from a sample risk profile (from the RiskAdvisor digital library) is  shown below. In this example, the client risk assessment is shown in the light blue for insurable risks and green for business risks. Independent industry and risk area specific risk benchmarks are shown ( in purple) to help provide guidance for clients and their insurance advisers to better assess potential risk exposures for their industry sector, to help reduce the potential for under-insurance or non insurance.

Once a client-specific risk profile is created, then the more intelligent matching of insurance with risk can occur as a result of:

  1. Higher risks being identified in a risk profile, which are usually the ones that are more likely to be considered for insurance. Without the identification of these higher risks and their consequence, under-insurance or non insurance is more likely to occur.
  2. Higher risks that can be insured can be shown as distinct from uninsurable business risk, creating much clarity on under-insurance and non-insurance before any claims.
  3. The inclusion in a risk profile of some form of risk consequence rating assessment creates the opportunity to better quantify the amount of coverage that is required, which again reduces the risk of under-insurance or non-insurance.

Benchmark screenshot

See also: Digital Risk Profiling Transforms Insurance  

With low-cost online digital risk profiling now available for business insurance, there is a wonderful opportunity for the insurance industry and advisers to better match insurance coverages with actual client risk through documented risk profiles, reducing the instances of under-insurance or non-insurance and the potential for negligent advice claims.

Improve Reputations by Digital Risk Profiling

Perceptions about conflicts of interest in the insurance industry frequently damage reputations. Profiling clients’ risks before recommending insurance reduces conflict-of-interest perceptions surrounding issues like sales commissions, over-/under-insurance and inappropriate/inadequate insurance. Risk profiling can improve the insurance industry’s reputation, letting insurance professionals:

    • Engage with clients as trusted risk advisers rather than insurance product sellers.
    • Demonstrate more intelligent matching of risks and insurance.
    • Tailor the insurance product to specifically identified risks.
    • Provide greater clarity on both uninsured and insured risks.
    • Reduce under- (and non-) insurance through greater focus on higher risks.
    • Ensure that insurance products are offered for the highest risks and that premiums are spent on areas of highest risk accordingly.
    • Eliminate perceptions of over-insurance by using risk matching.
    • Identify client risk management controls, thereby assisting insurance underwriting.

The inclusion in risk profiles of independent risk benchmarking for specific industries and multiple risk areas also assists in ameliorating perceptions of conflict of interest. Independent benchmarking provides quantifiable and empirical guidance that is not aligned to an insurance adviser’s commercial self-interest.

See also: Digital Risk Profiling Transforms Insurance

Until now, in the absence of conveniently accessible  benchmarking, hundreds of thousands of advisers have typically found risk profiling to be a time-consuming manual process. For this reason primarily, the use of risk profiling for commercial insurance buyers globally has been very limited and sporadic.

The Risk Advisor digital risk library of 160,000 exposures and controls and 6,000 benchmarks, for 600 industries and 60 risk areas has been built to make risk profiling easy for insurance advisers and their clients.

Risk profiling can improve insurance adviser reputations, and it can reduce compliance breaches and negligence. All of the outcomes from risk profiling contribute to enhanced reputations and help achieve regulatory compliance. An Economist survey highlighted that these are the greatest areas of concern across many industries, not just the insurance industry.


LRN  (lrn.com ), which has E&C (reputation risk) training for more than 25 million employees of organizations globally, does annual surveys that suggest that conflicts of interest are a major area of reputation risk concern across a  wide range of predominantly U.S. companies, industries and business sectors, as shown below.


The digital technology era presents a wonderful opportunity for the insurance industry to elevate its reputation, which has heretofore been hurt, often unfairly. The insurance industry pays billions of claims every year, and insurance advisers play an invaluable role in the sustainability of business through risk protection.

See also: Customers’ Digital Expectations

As longtime practitioners in the international risk and insurance sector, the Risk Advisor team members are excited about the opportunity for digital risk profiling to support the insurance industry and its dedicated professionals in getting the great reputations they deserve.