Jeff Pearce
Beyond the discount: brokers need to understand telematics fully to sell it | Canadian Insurance

Beyond the discount: brokers need to understand telematics fully to sell it

Insightful discussion at Toronto conference

If you’re out there, trying to hustle more business in terms of telematics—hell, if you barely can understand yourself the product you’re pushing with telematics—you couldn’t have done better than to attend some of the sessions at Insurance Telematics Canada conference yesterday in Toronto.

A relaxed and insightful Randy Carroll, former CEO of the IBAO, led a lively discussion with big brains Catherine Kargas, VP of MARCON, and Adam Mitchell, President of Mitchell Whale Insurance Brokers. Kargas, who has a knack for making complex and scary-tech understandable, was well matched with Mitchell, who showed off his blunt wit to grateful laughs in the audience.

“I think that in the UBI equation the broker continues to have an important role,” Kargas started off the discussion. “The research that I’ve done, I’ve heard things like, ‘Oh, you know, I don’t want to lose the control of the end customer to the insurer.’ And that could be valid, but the upside to getting involved in this, in the UBI selling proposition for a broker is enormous. First of all, the opportunity to engage with a customer more frequently is there. You have an opportunity to provide the customer with a solution that he or she may not have considered up until then.”

Mitchell reminded the audience that OEMs (Original Equipment Manufacturers) are already integrating telematics with vehicles rolling out of dealerships. “And all of this technology allows for the OEMs to supply those value-added services, right? So again, if the insurance value chain does not pull together in order to be able to preempt the arrival of other players, this should be expected.” Brokers and insurers as a group, he said, are “guilty of getting over their relationship with their fax machine.”

He says “the disconnect is those same people as consumers would never move to a bank that didn’t have mobile banking.”

At point point, Caroll noted, “I think when I go across the province and talk to brokers and talk to them about telematics, what I see most in the forefront on the broker buy in is the lack of understanding of what the opportunities are. So we as an industry have done a poor job of educating the front line distributor of the product on the benefits of the product.

“Because there’s more benefits to the product than just discount. And you know, we came out of the gate a number of years ago as an industry and said ‘Okay, we’re going to introduce a discount product for the consumer.’ … It’s really hard for me to have a conversation with a consumer that’s already getting a discount to say, ‘Well you might get another discount, but you have to start at this price in order to find out whether that discount is going to apply.”

“And then wait a year,” put in Mitchell.

“And then wait a year,” echoed Carroll. “The technology is there for us today that we can actually give a consumer an opportunity to get a test drive before they bought… understand what the score is, so that they can qualify for the discount before they actually enter in and get into that 365 day waiting period before they actually get that discount.”

“Look at cyber risk, cyber security for example,” observed Kargas during the discussion. “Regardless of what subject we’re talking about, anything techy is going to require training. And is going to require some openness from the broker perspective to understand and willingness to sell, right? I was speaking with somebody from Zurich a while back, and they said ‘Oh, you know, cyber’s not selling.’ I said, ‘Do they understand it?’ And that, that essentially is the key… If you’re asking the sales person to sell something they don’t understand, he or she is going to fail. So training is going to be key, providing the message, the right messaging to the broker so that the broker can provide that messaging to the end consumer is going to be important, and that’s particularly important when you’re talking in the commercial lines area.”