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“We have to convince people that our relationship is very good for them and that our advice is appropriate.”
“They understand actuarial triangulation of claims to produce a pricing structure which you put into the market and you hope sells. We are the complete reverse. “We have to convince people that our relationship is very good for them and that our advice is appropriate. “So advice is crucial for what we do. If it’s just price, we’ll die.” The challenge for brokers will be to assimilate the messages coming from the research and decide on collective and individual action. The greatest risk will be doing nothing. While some brokers have found success by embracing the internet and assimilating it into their service, Macquarie Bank’s latest Insurance Broking Benchmarking Report warns there are risks in pushing business online. “By prioritising the online channel, you risk diminishing the value of the broker relationship and commoditising your service offering,” it says. “It’s important to ensure your increased online presence compliments your role as a trusted personal adviser, rather than detracting from it.” Suncorp Commercial Insurance Executive General Manager Andrew Mair, says that “despite – or perhaps because of 12
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– the plethora of information available on the internet about insurance, there are still plenty of opportunities in this digital world for brokers”. “The main factor limiting broker use is that some SMEs simply do not understand the benefits a broker can bring.” He says brokers can demonstrate their capability when a business makes a claim. The index shows that brokers’ clients are more likely to be satisfied with their claims experience and less likely to be dissatisfied than direct clients. That finding backs up the conclusion of a report by US insurer Hanover last year, which says 60% of customers “who are lured away from independent agents by direct insurers promising lower prices will ultimately return to an independent agent because they want more value”. The challenge for Australian brokers – as it is for brokers in the small business field anywhere – is in breaking through consumer ignorance and prejudice to * highlight the value of what they do.
See also: Brokers gain from horror claims, page 54 Challenging times for brokers, page 58
April/May 2014
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