In the 11 years since PSC Network Insurance Partners was established, we have seen the role of the insurance broker become more challenging. Brokers have to navigate regulatory changes, hardening markets, remarketing and insurer appetite changes – many would agree that brokers have never worked this hard!
Remarketing every renewal has become the norm. Premiums are increasing for good-quality, claim-free risks, and brokers are having to approach all markets to ensure they are providing the best cover at the most competitive rate. Adding to this challenge is the reduced appetite and capacity of many major insurers, along with the requirement to provide more detailed information.
Filling this gap in capacity are the underwriting agencies, which continue to grow their position in the market through improved responsiveness, access to decision-makers and a hunger to write business that we are just not seeing from many of the major insurers.
COVID-19 has also increased the pressure on brokers being able to access underwriters and present risks face-to-face. And regulatory changes such as TMD, PDDO and advice models have added complexity for both insurers and brokers.
The ability of clients to afford insurance has become more of a challenge, too. Clients have limited options to reduce costs, and the worrying trend we are seeing is clients requesting to reduce cover – for example, to insure the assets but not the loss of income. Brokers are now tasked with convincing clients not to reduce covers every day, and this challenge is not going anywhere. COVID will continue to impact small businesses in the months and even years to come, and it’s our role as insurance advisers to do all we can to ensure these clients are adequately covered.
Despite all the challenges brokers face in the current landscape, we are still seeing a signiﬁ cant rise in the importance of authorised representatives in the industry. More and more brokers are opting to become an AR, where they receive a reward for the eff ort they put in and the service they provide their clients.
For brokers, navigating this type of market alone would be quite a feat. Being part of a supportive AR network like PSC Network allows ARs to build an asset with independence and control, but with the support of a quality licence holder.
Whether you are an AR or an employed broker, there are some key things you can do to get ahead in this tough market.
- Focus on your customer. Understand their business and add value outside of the standard renewal cycle. Educate your customers on the challenges in the industry. Support them with risk management strategies and continually remind them how you can add value to their business.
- Start the process early. Work strategically with insurers, be prepared, and have all the risk information available to present formally to markets. Use the leverage of your licence holder to get positive outcomes for clients. Remember, good brokers stand out in a hard market.
- Create eﬃciencies. Invest back into your business with resources and process efficiencies so you can focus on servicing your clients. Follow best-practice guidelines to ensure compliant processes – no one wants to have ASIC at their door.
- Create a clear but simple business plan. This plan should focus on the four pillars to success: specialisation, lead generation, networking and marketing.
- Never stop learning. Allocate time to it each week – continuous improvement is the key.
If you are already an AR or are looking to take the leap to become one, partnering with a collaborative and supportive licence holder dedicated to assisting you in growing your business and navigating this challenging environment can make all the difference.
Tony Walker is the CEO of PSC Network Insurance Partners, one of Australia’s leading AR and equity partner networks, which off ers a range of support services designed to grow AR businesses.