Written by Shepherd Compello Chief Executive, John Shepherd
Have you noticed how Amazon is getting everywhere? From humble origins as an online bookseller in the garage of Jeff Bezos in the 90s it has grown to a $177 billion business now.
Their latest move is to take on the firms who are distributing their products, by doing it themselves. You can understand why Amazon would, by controlling more of the supply chain, they can add value and control costs. If you want them to, Amazon’s Smartlock can even unlock your front door to deliver your parcel. Of course, their suppliers, such as Maersk and FedEx are worried, and their share prices have taken a plunge on the back of the news.
Amazon is a threat if we don’t do a good job for them. If we don’t do our job well, then there’s no doubt that big, strong companies like Amazon will look into whether they can do better themselves.
Soren Skou, CEO, Maersk
Next delivery, insurance
Not that any of this matters to us in the insurance arena. Big players like Amazon have no interest in our world – or do they? Reports have been circulating over the last few months about Amazon’s imminent entry into insurance. So, it is our turn to sit up and take notice too.
Is bigger better?
It is pretty safe to expect that a firm like Amazon is assessing the insurance distribution model and finding ways to improve it.
If we are to fend off the Amazons, the venture capitalists and others who are circling we need to get smarter before we get bigger. Capacity is increasingly being spread around the world, with hubs in the Middle and Far East. It is neither realistic nor cost effective for all firms – my own included – to set up broking houses around the world. It is time for us to challenge our supply chain and the services we offer. After all, if we don’t, others will.
How others are getting it right
Hiscox is a good model for the insurance world to consider. A strong brand with proud origins, starting in one small office they are now a global player. Yet, as their CEO, Bronek Masojada, stated in a recent BBC interview, they have concentrated on specialisms, such as terrorism, cyber and K & R. Hiscox’s niche approach has proved, so far, that it is possible to take on global behemoths and succeed.
Also, as I discussed in an earlier blog, by adding real value MotorEasy is quite literally making life easier for their clients by providing a one-stop-shop for motor services. Offering; MOT, GAP, Warranty, finance, breakdown and car servicing options in one place is perfect for the time poor. Crucially, MotorEasy created a tight online, phone and live chat-based distribution model suited to the client. Their hub is wherever suits the client.
At Shepherd Compello our clients will always be able to talk to us
Amazon, Hiscox and MotorEasy, are innovating to satisfy client needs, using a mix of technology and the human touch. So it is interesting to read the latest BIBA report on innovation in the broking market and concerning to see that 40% of the sector has not embraced innovation. Sitting and waiting for business is not an option, neither is a complete reliance on technology. There is a balance, we need to innovate to find smart ways to manage distribution whilst retaining the personal touch. This is why at Shepherd Compello our clients will always be able to talk to us, regardless of the distribution model.
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