Insurance brokers: role, benefits, and cooperation in the Swiss market

Our co-managing director Kathrin Neumüller interviewed Thargye Gangshontsang, Head of Broker & Key Accounts at Allianz Suisse. The interview focuses on the role of insurance brokers in the Swiss market, cooperation between insurers and brokers, and why structured feedback is important for both sides. Brokers, and thus the broker channel, are an important customer interface and play a very important role in Allianz Suisse's multi-channel strategy, which takes into account different approaches for different customer needs.

Role of brokers in the Swiss insurance market

Kathrin Neumüller: What exactly do insurance brokers do, and what role do they play in the Swiss insurance market today?

Thargye Gangshontsang: Brokers, i.e., independent insurance intermediaries, play an important role in the Swiss insurance industry. Their share is growing year on year, particularly in corporate business. But they can also be relevant in the retail sector, depending on what a broker specializes in.

In terms of volume, our own sales are stronger than the broker channel. If I look at the figures for Allianz Suisse, for example, slightly more than half of the premium volume in corporate business is generated through the broker channel, with the other half coming from the general agency channel, i.e., our own sales.

Brokers are legally obliged to act in the interests of the policyholder. They examine the market and are required to find and recommend the best possible solution for the customer.

Kathrin Neumüller: Does that mean they are always neutral?

Thargye Gangshontsang: The value proposition of a broker is to find the best and most suitable solution on the market for the end customer and to recommend it accordingly.

Why customers choose a broker

Kathrin Neumüller: You have already mentioned the advantages for end customers. Why do companies or private customers choose a broker rather than contacting an insurance company directly?

Thargye Gangshontsang: There can be various reasons for this. On the one hand, an entrepreneur or customer may simply say: I don't want to deal with this issue myself, I'd rather bring in a professional who can advise me and recommend a suitable solution.

The broker has access to the entire market and is not limited to a single company. This allows them to compare different offers and suggest the best solution for the customer.

Corporate customers often say: I don't want to manage my insurance portfolio myself; I'd rather hand it over to someone who has the professionalism and expertise to do so. Customers then benefit directly from this service.

Kathrin Neumüller: My hypothesis would be that this is particularly relevant for corporate customers, whereas private customers tend to have standard insurance policies.

Thargye Gangshontsang: You have to differentiate. In retail, it's often a matter of standardized mass solutions. Processes need to be as simple as possible, and self-service solutions play a major role.

As soon as situations become more complex, more expertise and often a network are required. Support is then useful so that the customer does not have to work through everything themselves.

When is it advisable to use a broker, and what role does trust play?

Kathrin Neumüller: Are there situations in which a broker is more or less useful, or is it always useful?

Thargye Gangshontsang: That depends very much on the individual situation. Ultimately, it is up to the customer to decide who they want to seek advice from. Insurance is not usually the customer's main concern, but it is very important because it involves risk coverage, asset protection, and retirement planning, and trust plays a crucial role in this.

Trust is crucial. Where do I feel well advised, where do I feel safe and secure? This applies to private customers as well as corporate customers. The insurance industry is a people business.

However, experience shows that corporate insurance is significantly more complex. In addition to mandatory issues such as accident insurance and pension funds, there is also the responsibility of the employer towards its employees.

What insurers expect from brokers

Kathrin Neumüller: As an insurance company, what specific expectations do you have of professional brokers?

Thargye Gangshontsang: Professionalism, technical expertise, methodological competence, and a good network are key.

This starts with tenders. These must be conducted at a level that leads to good solutions and does not result in constant inquiries or quality defects.

This applies not only to the placement process, but also during the contract phase. Once the contract is in place and the broker is needed, the relevant expertise is required.

We operate within a triangular relationship between policyholders, brokers, and insurers. All parties involved must have the necessary skills to ensure that our mutual customers receive the best possible service tailored to their needs.

Common misunderstandings between brokers and insurers

Kathrin Neumüller: What misunderstandings arise in everyday life between brokers and insurance companies?

Thargye Gangshontsang: It often comes down to conflicts of interest, for example, when it comes to the necessary insurance solution or a risk-adjusted price. The broker represents the client's interests and might say, for example, that the premium is too high. The insurer, on the other hand, needs this premium to remain profitable. This naturally creates tension.

Misunderstandings also arise when mistakes are made. This can happen on either side. It is important that the mutual customer does not suffer as a result.

If, for example, coverage is incorrectly advertised, responsibility cannot simply be passed on. Such situations must be clarified and corrected as quickly as possible.

Digitalization in the collaboration between insurers and brokers

Kathrin Neumüller: How has digitalization changed the way insurers and brokers work together in recent years?

Thargye Gangshontsang: A lot has happened over the past ten years. At the same time, we are not yet where we would like to be. We don't yet have truly smooth, digital processes in everyday life everywhere.

Broker portals already work well in mass business today. There, a broker can, for example, process offers and applications largely end-to-end.

In corporate business, however, there is still room for improvement and potential for further development. There are industry platforms (EcoHub) and IT providers (e.g., Sobrado) that promote cooperation between brokers and insurers and are very valuable for digitalization in the brokerage business, but we still have room for optimization, and standardization plays an important role in this. Without standardization, digitalization can only work to a limited extent.

The future of brokers: automation and personal advice

Kathrin Neumüller: Will brokers become more important or less important in the future?

Thargye Gangshontsang: In corporate business, I am convinced that brokers will continue to play an important role. How this will develop in private customer business remains to be seen.

Kathrin Neumüller: Which tasks will be automated, and where will consulting remain central?

Thargye Gangshontsang: The insurance business remains a people business, especially when it comes to complex issues.

Let's take a simple example: if you're going on vacation for two weeks, you can take out travel insurance relatively easily. You won't do a lot of analysis. You just want to make sure that you'll be brought home in an emergency or that cancellation costs are covered. This is typical mass business and will increasingly be done digitally.

As risks become more complex, advice remains crucial. The future lies in a good mix of digitalization and personal support.

Digital processes can simplify many things, such as contract changes or data collection. AI will also help eliminate the need to ask certain questions because the information is already available. This facilitates interaction between customers, brokers, and insurers.