Brokers are market experts. They live and breathe their markets and apply their unique expertise to help clients to get the best results. As modern technology revolutionizes the way humans connect – from social networks to programmatic trading – the need for their expertise navigating complex markets like reinsurance has never been greater.
The history of broking
Broking has always been about connecting the right client and counterparty. Historically, the hardest part of making a deal was finding the people who wanted to trade. Brokers starved or thrived based on their network – if you want to buy something, a good broker would quickly find a seller, while a bad one would leave you empty-handed.
As our modern economy evolved, simply finding people who wanted to trade got easier and, with choices on the table, getting the right deal gained importance. In this new world, a broker’s worth would not be measured simply by their network, but rather by the quality of the results they could attain. The ultimate fulfillment of this trend is programmatic trading – the entire market can be represented in one place, making it trivial to identify potential counterparties while dramatically increasing the breadth of trading options the client must consider.
Where broking goes in programmatic markets
Programmatic markets are not the end of the line for brokers; rather, the breadth of trading opportunities makes their expertise critical to helping clients navigate markets and get the best results. The best brokers become experts in programmatic trading who leverage modern tools to get their clients better results than ever before.
This is especially true in complex domains like reinsurance. Programmatic trading can bring a wide variety of options to the floor – real market data on how much it costs to buy more coverage, change a structure, or even replace indemnity coverage with industry loss warranties or parametric protection – that require deep market expertise to compare opportunities and get the best results.
Nowhere is the natural evolution clearer than in internet advertising. In the early days of the internet, ad space was sold through human conversations; today, internet advertising is almost exclusively transacted on programmatic exchanges. Did the brokers who sold ad space with human conversations go out of business? No! Their market know-how and custom software tools make them today’s market experts. They are more important than ever before and drive better results than anyone could have imagined in a pre-programmatic world. Variations on the “market map” below illustrated the complexity of the digital ads ecosystem as it went programmatic in the early 2000’s. To our point, the traditional ad agencies did not go away; rather, they grew to be critical front-line players with tools and expertise that advertisers needed to effectively access the programmatic markets.
The future with Tremor
Contrary to rumors, Tremor is not a broker killer. Tremor simply brings the whole market to the table, presenting more options all around so that better trade can happen. Like digital ads and other industries, the best brokers will recognize that more data is a clear win that will help them get better results for their clients. If you want to learn more about modern marketplaces and how to get the right reinsurance, we’d be happy to give you a demo or answer your questions. Reach out to us!