Interview with Higinio Iglesias, CEO of E2K. Community of Insurance 11-01-2016 (Carlos Biurrun)
# Spanish Version #
E2K has a long tradition, experience and good work in the field of technological solutions for Insurance brokers. Can you synthetically explain to us what E2K is, what its vision and strategic lines are?
E2K is a company. In 2001 a group of insurance brokers who were already maintaining a professional partnership relation since 1993 decided to undertake and founded a company. It is good for brokers to develop entrepreneurial initiatives, invest capital, create assets, generate employment; It is very positive to produce goods and services to improve the professional and business capabilities of insurance distribution, and above all, it is so, if there is a deep understanding of the needs in the background of the initiative.
In 2001, we perceived the need to invest in business development and technology. Possibly investing in business development was somewhat understandable, even when pioneering then, but embarking on an adventure in the technology industry was undoubtedly a courageous and brave business venture.
Today E2K is a solid, solvent and well capitalized commercial entity (Corporation) which develops two lines of business around two brands and independent operational structures.
On one hand, DNAS (Development of the Insurance Business and Services), based in Albacete, a division of business development for brokers providing value services in terms of distribution agreements with insurers, legal customer service, marketing to support distribution, support in social media, publications for final consumers, legal support…; which comprises more than 130 brokers under the brand #E2KBROKERNET, National Broker Network.
On the other hand, ebroker, based in Pravia (Asturias). ebroker is a software for the comprehensive management of insurance brokers which is set within the context of a powerful technology platform for the connectivity with insurers and provision of related-services such as cloud infrastructure, information management and data processing (Q-Data), Business Intelligence, Call Center…
Strategically, it is clear to us that the insurance industry is undergoing a stage of omnicanality and ambitious customer loyalty processes and, in this context, it will provide different channels, products and distribution conditions in which the differential factor will be increasingly smaller and hard to convert into a competitive advantage.
The vision of E2K is to play an important role as provider of value added services (business – DNAS-, technology – ebroker-) which provide competitive advantage to the insurance product and make a difference to the consumer, since the current challenge for the broker is to show the customer that the insurance product is best when it is accompanied by professional services, and that these services are an independent variable of the insurance company.
We’d like to see some consolidated figures of E2K and its shareholders, as Insurance brokers, intermediated premiums, number of brokers, number of employees, total revenues…
Currently in the field of business development (DNAS), Albacete, we have a professional team of 10 people dedicated exclusively to the more than 130 brokers who form the #E2KBROKERNET Network representing some intermediated premiums of more than 350 million euros. In the field of technology (ebroker), Pravia, we have a team of 32 people covering all operational areas (sales-marketing, engineering and after-sale services) to serve more than 500 brokerages customers of the system and over 3,000 users both in the national and international market.
The turnover of E2K as society by 2015 has reached a figure close to the 3 million euro with a pre-tax profit of 350,000 euros.
The separation of a good number of Brokerages who were part of the brand E2000 and which have become E2000 Asociación, how has it influenced on the review of the technological strategy of E2K, in case it has influenced?
From the outset in 2001 ebroker has been an independent product, open to the market and with a highly professional management model. ebroker’s relationship with its brokers users is a relation client/supplier. Currently ebroker customers are both brokers included in important professional/business groups, and brokers who are not attached to any organization. ebroker’s relationship and its service commitment with the brokers placed in the field of E2000 Association will be excellent, as it has been to date and as we hope it will be in the future. Our strategy has always involved a special feeling with the broker since we think that due to our special nature «we understand the broker needs better than anyone», and everything remains the same in that regard.
E2K has been a pioneer in the technology and innovative challenge designed by and for the broker, how do you value the responsiveness level of Brokers to this important challenge? Isn’ t there the danger that other competitors make better use of the digital age because they are investing more?
In general there are two fields of innovation: product innovation and process innovation; a look towards the market, another one towards the organisational environment of the company, and both create mutual synergies. In the case of the broker, product innovation is directly related to the improvement in the service provided to its customer, i.e., with the added value it brings to the insurance product (the insurance product innovation corresponds to the insurer).
Technology, in general, provides the broker with capabilities to provide added value to the insurance product in strategic areas such as connectivity (both commercial and management), B2C services…; and also skills in its business organisational environment such as dashboards, finance, human resources, quality…
It is critical for the broker to leverage on technology as a key resource for innovation. Failure to do so is to stay out because others will do it, both competitors of the broker channel, and other persons involved in distribution. And in order not to stay out, it is very important to choose a good technology partner as a companion in this race for competitiveness which necessarily involves innovation.
ebroker is located there, on the site of the technology partner of maximum confidence of the broker who is able to understand him and accompany him in this important mission towards competitiveness.
How do you value the steps being taken in the sector on the convergence of processes, EIAC (Standard for the Exchange of Information between Insurance companies and Brokers), taking into account that the improvement of the efficiency ratio of Brokerages is largely conditioned by it?
The existence of a sectoral standard that normalises the exchange of information between insurance companies and brokers is a necessity and an unquestionable benefit. We are unconditionally and without reservation in favour of EIAC.
And talking about efficiency we should be clear about this: EIAC makes connectivity efficient. Connectivity makes the broker efficient.
As an experienced Insurance broker, as well as CEO of E2K, where should the 2020 model of Insurance brokerage focus? Which would be its keys to transformation?
Regardless of other business considerations, the 2020 insurance brokerage has to be capable of producing a transformation in the concepts product», «client», «compensation». Its product will not be an insurance policy, it will be a service, clearly associated in the majority of cases with the insurance element to which it has to add value as an independent variable. Its client will be the service consumer, able to recognise it as useful and appreciate it as a differential factor. Its compensation, either commission or fee, must be the fair price its «client» freely accepts as equitable compensation to the «service». Obviously this is not an easy task, but there is still time until 2020.
Do you think there will be union processes of brokerages in the coming years? How do you rate the dimension for the strategic positioning of the business model of the insurance Broker?
Obviously, size counts. The combination of size and efficiency in management provide plenty of space to create structures of company whose axis of development is the service. However, time has proved that the concentration of brokers is not an easy task. There is no other way, something different will be to interpret concepts such as concentration, fusion, co-operation; legal, operational…
From your long experience negotiating, do you think that market conditions, changes in legislation, economic recovery as well as certain deterioration of the combined ratios of some products account, may affect the hardening of the negotiations on agreements of the Associations of Brokers with Insurers? And in what specific ways?
I have said it before, the differential factor around the insurance product that institutions will offer to the different distributors and channels will be increasingly smaller and hard to convert into competitive advantage. It is time to add value.
Technology companies, such as E2K, have a sharp capacity for growth, only influenced by the absorption capacity of the natural market they address and by the action of the competition. Regarding this, what factor or factors would you say make you different and should make your potential customers choose E2K as service provider?
In particular, I would like to highlight two differential factors:
Firstly, and since E2K is an organism with DNA of insurance broker, that special feeling that makes us «understand their needs better than anyone else» and «put in their shoes»; and secondly, our innovative spirit. When we talk to the insurance broker about innovation we do it leading by example. ebroker and its operative environment are in constant innovation. As a product we have been the first ones to develop our software to web environment, to offer a real cloud model, to introduce Business Intelligence, to apply bidirectionality to connectivity, to apply video to support the user, to participate actively in social networks, to offer web services to integrate with other systems… As an organisation we have implemented agile methodologies in the engineering team like SCRUM through tools like JIRA, Testlink for test processes, Alfresco as a platform for document management, O365 as a platform for teamwork; we have a security certificate with ISO27001…
Related to the previous question, the Spanish market of insurance mediation, is not acting with the speed expected to be technologically renewed. Has this circumstance forced you to look to other markets, such as the Latin American, where you have already opened a business line with Mariátegui JLT in Peru? Has this look towards Latin America become a strategic factor of your expansion, or has it been the result of a well-used opportunity?
As a result of our innovation through an active presence in social networks and the Internet, we are receiving continued expressions of interest in ebroker from the Latin American market, and we have taken great interest to one of these business opportunities and it has materialised in getting a great client in Peru. Now our priority in Latin America focuses on the successful execution of this important project, since from the first of January MARIÁTEGUI JLT is JLT PERU and this deployment is part of our agreement with the JLT GROUP, No. 1 British broker and 5th worldwide. Everything has to do with the strategy of JLT in London for their business in LATAM and we want to be very focused on responding to the confidence that this large multinational has placed in us.
What is your position, as CEO of E2K, about the level of influence of the Mediation representative bodies on the transformation of the insurance industry? What would you propose to reinforce a heavier influence of these bodies in front of the Administration and companies?
Although it is obvious we must remember that we, brokers, represent the most professionalised channel of the insurance industry subject to regulation, now more than ever. Insurance entities and administration bodies must perceive that our role in this scenario is solid, solvent and committed; and working for this objectives is a task of the sectoral representation of the brokers. As a proposal, possibly trying to provide an environment with a more uniform representation.
Finally, can you tell us what your deep desire for the transformation of the insurance sector in Spain is?
That the broker continues to play the role of cornerstone of the most professional and qualified distribution; a professional broker and businessman able to reinvent himself according to the times through an innovative attitude to transform concepts such as «product», «client» and «compensation» for the benefit of a new business paradigm.
Higinio Iglesias
Corredor de seguros y otras aficiones
El Blog de Higinio Iglesias 
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