How Insurance Brokers Create Value - a Functional Approach

Fundamental changes in the market environment force insurance intermediaries to redefinetheir roles. This article focuses on the future functions of brokers, which areanalyzed from a functional as well as a customer-oriented perspective. To cope withthe limitations of current intermediation research, the customer-value approach is appliedas an alternative framework. This approach suggests that brokers must createbenefit and customer value to be successful in the future. After a review of existingliterature concerning insurance intermediation, this article presents the results of 20in-depth interviews with leading managers of multinational companies from differentindustries, representing important current and potential customers of insurance brokers.The findings highlight four main functions insurance brokers are expected to fulfilfor their customers: supplier, transformer, partner, and problem solver. The articleconcludes with a discussion of the growing demand for innovative and individualizedservices and further essential requirements for brokers that will enable them to meetthe future needs of their clients in the most optimal manner.