Challenges campaigns. Specialists can also improve client retention,

Challenges
faced brokers

Insurance brokers need to go on ascending to stay at
the head of their adversaries and the advancing trend of their direct competitors.
The obstacle faced by insurance brokers today are human resources; government
intervention; sustaining agency revenue growth/profit; maintaining a consistent
company strategy and tactics

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Skill shortage – Skill shortage is the major
challenge faced by Insurance Broker Industry in all over the world .Having
well-qualified employees are commercially beneficial for brokers. But there is
a need to invest in training and supporting wider industry initiatives to
increase the take-up of professional and qualifications and learning.

Uncertainty in markets – Presently, there are over 500 brokers channelising over
Rs 25,000 crore of business, or 20 to 25 per cent. A constantly changing market demands in insurance sector,
brokers need resources to understand and adapt to those unfolding demands.
Organizational change has to become part of the daily conversation for brokers
and fixing it in their culture will enable every member of the team to make a
positive input.

Stringent Rules and Regulations – In a bid to
streamline the domestic insurance broking industry, the insurance regulator
IRDAI has proposed a host of stringent measures, including the strict capital
requirements for the segment. The existing capital requirement is Rs 50 lakh,
Rs 2 crore and Rs 2.5 crore for direct, reinsurance and composite brokers. The
IRDAI has proposed raising the capital requirement of insurance brokers to Rs 1
crore, Rs 4 crore and Rs 5 crore for direct, reinsurance and composite brokers,
respectively.

Demand Specialize –
Specialization separates brokers from their competitors and sets them apart as
experts in their field. While brokers may be restricting the overall size of
their market, they can give themselves a better chance of becoming leaders in a
distinct space. Specialising can also help create competence in client procurement
through word of mouth and highly bespoke marketing campaigns. Specialists can
also improve client retention, which can provide a platform for generating
cross-selling opportunities.

Commoditization and self-service – Products are becoming more commoditized and encouraging clients
to self-serve – but at the same time SMEs are becoming more complex. Off-the-shelf
insurance solutions will not cover all the risks they face, so there is an
opportunity for brokers to educate clients about these exposures and give them
tailored insurance and risk management advice.

Rise in automation – The CII says 40pc of account executives at brokers think their
jobs are at risk from artificial intelligence (AI) and technological
developments. But technology also offers the opportunity to free up their time
and focus on risk-based client management activities.

Discussing
the CII’s findings, its president John Moore said: “Technology, particularly
AI, could displace employment across the market. The gap in technical and
commercial skills could widen.” But he added: “The way forward for any
individual or firm in the market is to relentlessly focus on clients and to
continuously develop skills and technologies to support clients even further.”

Lack of insurance awareness – Insurance penetration in India is just 3.44% .General
Insurance continue to be under –penetrated. Customers are not satisfied with
general Insurance. Awareness of home insurance is less than 40% in urban
households. The number of people who believe that life insurance compensated
for damaged or rebuilding assets has decreased.

Cyber security – As businesses rely more on IT and the risks they face increase,
there is an enormous opportunity for brokers to develop a specialist in this
market.