Authored by Jon Walker, Executive Managing Director, AXA Commercial
Branch networks are crucial to the distribution of insurance. Industry and press comments usually focus on branch closures and branch openings. But the quality of the service you provide has nothing to do with the number of your branches. It is about striking the right balance between proximity and expertise.
Whenever an insurer or a broker closes (some) regional branches, technological explanations are quick. Customers no longer want to buy insurance over the phone or in a shop; they prefer the convenience of online purchases. To take that into account, businesses have automated their processes, improved their efficiency and reduced the need for local presence on the ground.
Symmetrically, whenever an insurer or a broker opens (some) regional branches, the value of human interaction is always put forward. Customers want personalised service and face-to-face advice. Businesses benefit from the high levels of local visibility (of high-street shops) and their local staff need to be there – physically – for customers.
Both visions are wrong. Of course, you need feet on the ground. And of course, you need some degree of automation. But what matters isn’t how vast your branch network is, it is what you do with your branches that counts.
Insurers need regional branches for many reasons, not least broker relations. You need a local presence to find the right broker partner, build the connection, maintain the relationship – and better serve the end customer. If you want to grow in the mid-market or mid-corporate segments, that is the kind of partnership you need to invest in.
In insurance as in sentiments, long-distance relationships rarely work: there’s bound to be some miscommunication, and often some mistrust. And when an insurer/broker relationship finally breaks down, policy-holders risk being left in the middle.
In the SME market, while there are many companies who prefer to buy direct and online, there are still customers (the majority by the way) who place value on broker-led advice and underwriting expertise and the local branches can support brokers with dedicated underwriting resource. That still represents distinctive advantage in this segment.
Other operations, however, can perfectly be carried out remotely. Most policy renewals and mid-terms adjustments, for instance, don’t require any geographic proximity. These operations can be assigned to one or two national centres
These centres can develop efficiencies and deliver a more consistent and responsive level of service. They can be dedicated to a particular type of business and still have effective relationships based on being an extension to a branch offering, rather than separate to it. For instance, our two SME Trading Centres will focus on broker service in that key area of the market.
That is how we’re combining proximity and expertise. Our network is composed of local branches and centres of excellence, supporting each other, with one unifying goal: enhancing broker service and delivering against customer needs. By striking that balance, we trust we’ll enhance our partners’ experience.