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José Manuel Fonseca CEO MDS Group

Staying Relevant in an Era of Disruption

The future of the insurance broker is under threat. The danger comes from new technologies that are reinventing the insurance industry’s distribution chain, its business models, and arguably even society as a whole.

Many believe that the current shift towards a globally connected network of businesses will result in widespread disintermediation. 

However, this future is not so black and white. The change is very real. New technologies are altering business processes, and ‘disruptors’ are constantly emerging; but instead of feeling threatened, we must see these developments as an opportunity to evolve.

By changing the way we see ourselves, and modifying our approach to the business, the good brokers will survive and prosper.

Failure to acknowledge the challenges that have arrived with the digital era would be a big, possibly fatal mistake. Equally, failure to recognize and act upon the opportunities it presents would be disastrous.

We must adapt to become much more efficient and more accessible to our clients. But if we don’t identify the areas where we have to improve and advance, don’t make the right investments and learn how to become much more useful to our customers, we risk redundancy. 


The threat of disintermediation is not new. The best way to deal with this threat is to innovate.

Granted, innovation is already a high priority on the boardroom agendas of insurance companies and brokers. But while there are discussions at high levels about innovation, industry executives and market commentators have noted that the industry needs to work harder at being innovative.

Rather than discussing innovation once a month during a board meeting, we must constantly work to improve. Businesses must adopt broader approaches to stay nimble and focus on expanding their innovation strategies.


Brokers’ key roles include areas where innovation is vital such as risk management, strategic advice, and negotiation.

All of these are qualities that can hardly be replaced by codes or algorithms. They instead depend on human social qualities and cannot be replaced by technology (at least, not yet).

Brokers must alter their business models to emphasise these interpersonal and social qualities, their strategic advice, and their consultative offerings. To survive, brokers must adapt their role to act increasingly as holistic risk consultants, not just transactional market specialists.

Such a shift will pave the way to build and maintain trust between brokers and clients. Trust is essential to maintain and attract business, and is a something else that computers cannot guarantee.


Brokers can innovate by building this trust, which in turn increases business retention.

It is very important that clients trust their broker’s judgement, their risk assessment counsel, and their strategic planning. That means embodying the role of the trusted adviser and using it to build strong and positive reputations in a competitive market.

The most effective way to achieve this trust and build an unassailable reputation as an essential business partner is to constantly deliver innovative solutions that fit each client’s specific risk profile and appetite. Renewal at expiration is not the path to survival.

Published in Claims Magazine
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