I confess, I’m an Insurance Broker and have been since I was 18 years old.
When I started working the fax machine was reasonably new. The internet didn’t exist. Artificial Intelligence was being talked about and I used to deal with a lot of photocopying and paper.
The industry’s products haven’t changed that much since I started nor have the basics of what I do. Why I do it has, I now look forward to getting home and having some quiet time with my family, all part of growing up as my mum says. My money is now earmarked for family mostly at their insistence but that’s another story. The enjoyment of my job is derived from seeing the process through , negotiating with insurers and all the things that I look at as helping clients. This last part hasn’t changed.
The major thing I have noticed is that despite studying and spending time keeping my professional knowledge up to date, the job I love, is still constantly compared to used car sales in terms of its status as trusted trusted adviser. This job has always been a profession to me, (I go to work in a suit and I take my advisory role seriously like every other profession.) Yet after all these years I feel like I need to start a insurance discussion with “Yes I know insurance is boring but…..”
I’ve also been thinking recently about the terms frequently used on business sites now and about the need to have a profile in social media. Terms like my “brand” and “disruption” “hack” and a plethora of new words used to describe “reputation”, new idea or process or trick. All describe clever thinking and different approaches to old methods. Nothing wrong in all of that, change is the only constant.
So how do I fit in and what should people expect of me in the 21st Century? My conclusion, is that the business world still craves a number of things of insurance brokers provide and these haven’t changed nor have they been hacked or disrupted.
What? I can hear you gasp from my desk. No! Surely everything has a hack or a disruptor in the planning stages? Maybe, but let’s have look at what my clients expect.
Businesses and individuals use a broker to facilitate the process of acquiring insurance, to explain the terms, advocate for them and mediate on their behalf with insurers. In Australia, an insurance broker’s duties are set out in the laws that govern our licensing as well established in law. Most importantly, our role is about being on the client’s side unless we tell you otherwise. We are obliged to tell you as well. This all sounds very simple and straightforward right? It must be simple to do this? If you agree that this being a simple role that you can and should do yourself, please feel free to go off and read other articles about “16 important things to make you a billionaire” and thanks for your time.
What exactly are you buying?
Insurance is a grudge purchase and an extremely complex financial transaction that should, be cheaper every year, according to some people. Each policy is a contractual promise to act or to pay should an event occur. Your broker is your weapon in the fight against insurers or “the war on cost vs cover” as I like to think of it. Insurers aren’t the enemy nor are they out to get you. An insurance broker should help you understand the process and smooth the bumps for you.
Your insurance broker is expected to know and understand the cover offered to their clients, but before that understand the clients’ business or home or personal arrangements prior to seeking cover. Taking this information they then find insurers and “argue” for cover at the best possible price using all the knowledge of their clients and their particular circumstances. The arguments being designed to highlight aspects of the business or arrangement that appeal to the insurers appetite for risk in the clients arrangements. Assuming this is all acceptable to my client, cover is accepted and invoices raised. So the job is finished right? Nothing more to do, see you next year. Sometimes…..
…I get an email or phone call from my client saying something like “my daughter has just crashed my car ” or “I’m being sued by client of mine”. My client is stressed or distressed and wants me to “fix it”. So this is where a true insurance broker earns their money. From that point on I’m being asked to “look after the client” which is code for make sure all of this gets paid/fixed or otherwise sorted out! If the broker has done their job and the client has provided us all the information required the claim will sail through smoothly. Sure it does, and most of the time the policy is correct and the client has been fully truthful with their broker and, thus the insurer. I’m still surprised how often I read about clients who don’t tell their broker the full story, or worse still “brokers” who omit things when dealing with insurers.
The insurer has their own problems to deal with. Such as? I hear you ask. Good question. Everything from, “the 100 other claimants in the suburb who have been hit by the same storm as my client”, or the fact that “the insurers normal claims officer assigned to deal with this type of claim is currently lying on a beach in Thailand enjoying a well earned holiday.” The claim is left with another staff member to cover this absence and they do it to the best of their ability.
Insurers do a good job all things considered but there are times where a good insurance broker needs the patience of a saint to get past the roadblocks to progress the claim to final settlement. There’s no criticism or defence of insurers here nor are all insurers angelic in their behaviour. I’m just highlighting the facts, we’re all busy and things don’t go to plan or as they should.
Once past the practical issues, the broker needs to ensure that insurers apply the correct interpretation of the policy. This includes everything from the correct excess being applied to the manner in which the cover operates in the particular circumstances of the claim. All of which is just part of the job. My clients are generally very patient and I take the time to explain what should happen, so then they understand if I’m having difficulties or there are problems outside of my control. This is mostly received well and understood.
So after all of this the claim is settled, the house or car is repaired, or the legal action settled in my clients favour. A happy ending and we can now move on to the next renewal. The renewal, because of the claim, needs a delicate balancing act of satisfying the client, ensuring the cover is renewed and leaving the insurer feeling like they are able to apply increases or cover restrictions as they see appropriate, all without getting either side upset. I’m sure you can all see the needs of each are in contrast to say the least.
Insurers are important to me, and I need to balance the clients needs against the insurers desire to make a profit. However this should be just enough profit, so that I can achieve the same results for all of my clients, including the ones that are not desirable from the insurers point of view. The clients who have properties in bush-fire prone areas, who manufacture children’s toys, play centres and all the other less than desirable risks have to be insured and all need the services of a broker, like me.
So what does all of this mean for me? Well, sorry insurtechs and technology buffs, while some aspects of my job have been replaced by technology, until artificial intelligence can manage a relationship like this including the claim I’ll continue to come to work knowing that sometimes I’m indispensable to my clients by making their lives easier. I’ll also keep looking for anything that can smooth the process so that it is less painful.
My clients still expect all of the above not to mention sharp pricing and reasonable fees, which I’m happy to keep trying to improve where I can.
For those of you out there who have read this and thought what a load of rubbish, then feel free to continue as you were. If you’re happy with your broker, then fantastic keep calm and trade on. However, if I’ve touched a nerve about your insurance experience, feel free to get in contact. I know insurance is boring BUT…
About Derek Wickett
Derek has been an insurance long enough to have seen premiums change against the client, to have seen insurers collapse, and explained to clients why and what can be done about all of it. He believes that specialists can be measured by more than the ability to change insurers every year to save premium. He regards himself as a PI and D&O specialist having been a broker in both good and bad times, and understanding that the needs of the insurer and insured are connected, as without both sides, neither can survive.