2018 has been another banner year in the broker M&A world, with deal numbers on par with those in 2017. This M&A activity among brokers is continuing even this late in the year. Among notable recent announcements, Marsh reportedly plans to acquire JLT while this week EPIC announced plans to purchase Integro Insurance Brokers.
As these and other brokers consolidate, large commercial and specialty carriers that distribute through retail and wholesale brokers will need to not only to gauge the impact of increased M&A activity on commissions and fees, but also the impact on automation from a technological standpoint. Will this distract from progress made this year? Or will M&A activity allow for more broker technology investments down the road as the acquisitions fold in and begin to create operational efficiencies?
Earlier this fall, I co-authored a new report on automating the broker submission transactions with large commercial/specialty carriers called Broker-Carrier Automation: Overview and Prominent Providers. Over the past few weeks, there has been great interest from large carrier/specialty CIOs I have been reviewing the research with. They have been particularly interested in the profiles of automated application intake software vendors who offer AI-based solutions that help carriers intake unstructured text on applications submitted from various sources.
There is not yet an industry-standard in mapping this data since submissions are supported by many different types of applications and forms. The biggest reason for this unique scenario in the policy processing world is that the complex and specialized products’ data requirements are not standard, nor are they static. It’s up to the insurer to intake those documents, inspect them, and input the data into their underwriting systems. This is commonly done by their offshore data entry partners. Therefore, any technology that can help insurers automate this process is well-received.
Brokers also have options for automating their end of the process; filling out new business/renewal business applications with their client CFOs or risk managers could be simplified by partnering with the digital broker platform vendors profiled in the report. With the lack of automation in the large commercial/specialty segment, both types of solutions could be the start of a much-needed movement.
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