Insurance is a funny old business. For years now everyone has been saying that insurance brokers are a total waste of space and that they’ll soon be consigned to the anals of history. And yet even the most exhaustive trawl of said anals yields not a single mention of ‘insurance broker’ among the ranks of extinct species.
We all know the history: first Pete Wood branded brokers middlemen and attempted to excise them by means of a new thing called direct insurance. Then something called Compare the Meerkat came along and reinvented a new kind of middleman that compared different brands of insurance using electricity or something. But all the while many people and businesses perversely insisted on flying in the face of futurity by continuing to use and value insurance brokers.
So reports of brokers’ demise have remained prone to considerable exageration. That could soon change, however, if tech-wielding disruptionist Freddy MacNamanorama, CEO of app-based insurance provider Cuvver, has his way. Speaking to leading insurance broking publication Insurance Ape, Freddy Mac said “Honestly we think that most broking operations will go away in the next decade.”
Like the proprietors of those pod-shaped plastic city-centre love cabins you can book online (you know the ones!), Fred Mac is happy to entertain those in search of a bit of cover (or perhaps we should say “cuvver”) on a by-the-hour basis.
Today Cuvver is working with reinsurer Swish Re to offer by the hour motor insurance cover to people who are using someone else’s car when that someone else’s car isn’t insured for use by unnamed drivers. Tomorrow – because Cuvver is the first insurer in the UK to sell car insurance “natively on mobile” – it will probably dominate the entire market.
“Behind the scenes,” Freddy Mac brags cryptically, “we have cut out the middle-men and built a platform that lets us go directly to underwriters for pricing, with direct integrations to third parties. Our competitors go through a myriad of middle men from price comparison websites to software houses to re-brokers before the premium sees the underwriter.”
When you look at it that way, it’s plain enough to see that the competition is effectively finished.
Mr Mac has no qualms over nailing his colours to the Cuvver mast, pledging to do to brokers what Uber is doing to black cab drivers and mini cab dispatch offices. “The future,” he says “doesn’t look great for insurance brokers.”
Will he have his evil way? Only time will tell. But if insurance brokers do wish to survive a little longer, Fred-Mac says they need to wake up, smell the coffee and leverage what’s left of their “unique and influential position in the supply chain” to help “push through these new disruptive models”.
If you don’t even know what that means, you’d better get hip to the new groove pronto, Daddy-O, or pack up shop right now.
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