A new report from Boston Consulting Group (BCG) offers fresh ideas on how insurance carriers can better work with retail brokers to grow their business. Released in late June, the report focuses on personal insurance and coverage for small to midsize businesses. It highlights changes in the brokerage world like consolidation, digital shifts, and rising customer demands as key reasons carriers need to rethink their approach.
One of the main takeaways is that insurance companies should group retail brokers into tiers. This means separating them based on factors such as the volume of premiums they handle, profitability, and how well their goals match with carriers. The top-tier brokers, who often represent the biggest and most strategic clients, should get special attention—like dedicated account managers and faster service. This helps carriers focus their efforts where it matters most and avoid the pitfalls of treating every broker the same.
The report explains that bigger brokerages have more leverage and expect better, more personalized service from insurers. At the same time, smaller brokers tend to serve unique markets but face challenges with fewer resources. Trying to serve both groups with one standard approach leads to missed chances and inefficiencies.
BCG also suggests that insurers team up with brokers to create flexible, modular insurance products tailored to changing customer needs. This collaborative product development can help brokers offer unique coverage options to stand out. For example, providing expertise in cyber coverage can help brokers tap into new customer areas and keep up with industry trends.
On the technology side, the report points out that many carriers still rely on outdated systems. Brokers now want speedy, seamless interactions. Upgrading IT with real-time quoting, API integration, and automated underwriting can improve how fast and smoothly things get done. Plus, building user-friendly broker portals where brokers can manage policies, claims, and service requests on their own would make a big difference.
The report also recommends training special broker relationship managers and assigning dedicated claims managers to top brokers. It encourages performance-based pay tied to relationship growth, profitability, and retention. Regular reviews of broker segmentation, customer solutions, systems, and incentives will help insurers spot gaps that hold them back.
Finally, BCG warns against two extremes in dealing with brokers: fully customizing every request or sticking rigidly to standard processes. Both ends of the spectrum can create problems—too much customization is hard to manage, especially for smaller brokers, while too much standardization can leave key needs unmet. Instead, carriers should aim for flexible product offerings that can easily adapt without overwhelming operations.
In short, the report paints a clear picture: if insurers want to win more business from retail brokers, they need to be smarter about how they serve different broker groups, work together on products, invest in technology, and design incentives. This approach can create stronger partnerships and open the door to growth in a changing market.