Anuj Jain is the Carriers Practice Leader at ReSource Pro. With consulting experience at Accenture and Aon Inpoint, plus insurance experience with AIG and Liberty Mutual, Anuj brings a depth of knowledge in the carrier space to the ReSource Pro team.
The big are getting bigger
The M&A phenomenon is the result of several social and economic trends, including falling investments, a rise in social inflation, and an influx of capital in the U.S. marketplace. An aging workforce and the challenge of agency perpetuation have also made owners more eager to sell. It’s telling that the largest deal in the P&C segment, that between Aon and Willis Towers Watson announced in early March, is among brokers rather than carriers. Inorganic growth is becoming a chief success strategy.
The impact of M&A on carriers and MGAs
Brokers are continuing to consolidate, and as they grow larger, they are seeking out carriers that can match their scale. They prefer to work with a select number of strategic carrier partners that are able to offer a wide range of products.
Because of this, P&C insurers may already feel squeezed by competition with larger national and global carriers. Standing out to larger brokerage houses will become a barometer of success in 2020 and beyond. In this evolving power dynamic, how can carriers and MGAs shift their strategies to appeal to today’s brokerage heavyweights?
Strategy for Differentiation
Many leaders answer the call for differentiation with add-ons to core offerings. While a strong response, this does not fully address the market movements at play. Today’s challenges require a larger, more strategic approach to standing out among other insurers.
Differentiation must be a continuous process. One way to be more responsive to market movements is to create a culture of innovation inside your organization. Implementing an internal innovation engine that takes the following steps will bolster differentiation:
- Listening to the market – Do you have and effective mechanism for gathering insights, trends, and communication from the broker and insured? Does your value proposition align with their goals?
- Adapting offerings to findings – How can you help distributors and insureds accomplish their strategic objectives? What capabilities can you improve or develop?
- Communicating this value proposition to the market – How are you communicating your unique value to the market and is it effective? Do you know what services insureds value beyond risk transfer?
Cultures of continuous improvement are a long-term investment in the sustainability of an organization. Ready to think about how to best ensure employees have the tools and time they need to execute? Let’s talk.