Kylie Stephens (pictured above) is a broker with agricultural and horticultural clients across regional South Australia and remote NSW. When Insurance Business asked the insurance account manager with Nutrien Ag Solutions if hard-to-place risks in the rural sector are getting harder to place, she agreed.
“Yes, I am witness to this at my workplace,” she said. “The underwriters who we have built relationships with over many years can only get us so far.”
By way of illustration, Stephens sketched a couple of case studies from her current work. Both examples suggested that an innovative approach to brokering – not to mention patience and steady nerves – are essential if brokers are to succeed in tough insurance markets.
“I recently had a client with a complex risk who I spent two months sourcing solutions for,” she said. “In the end, I was lucky enough to have a small number of helpful underwriters agree to offer capacity - however it was simply not enough to fully insure the risk.”
Stephens said there were moments when she thought she was on a mission impossible.
“However, by leveraging from every tool I had access to and involving specialists we put in place a strategy that got us there in the end,” she said.
However, it was a bitter-sweet victory. The client’s premium was three times what they paid the year before.
“Scenarios like this can substantially impact a business to the point of wanting to exit the industry or sell the asset,” said Stephens. “This emotionally impacts the client and broker, who has their client’s best interest at heart.”
The rural specialist broker said, despite these sometimes fraught outcomes, “it is not all doom and gloom.”
“Risks that are deemed as complex are opportunities for brokers to shine,” said Stephens. “There are many opportunities out there when a complex placement can be turned around with the broker’s help.”
She has had easier placements.
“An easier one I had was a new client who had recently let out one of their shops to a small tattoo parlour not realising this was going to compromise their insurance,” said Stephens. “We found a solution.”
However, she was “shocked” the previous broker never explained the consequences of engaging with high-risk tenant occupations.
“A simple, straight-forward conversation would have saved this client heartache and money due to the new insurance terms I had to put in place to accommodate the changes,” said Stephens. “Now each time this client wants to lease space out I am the first person they call for advice - which is a great outcome.”
Stephens said another challenge, apart from finding insurance covers for customers, can be digital platforms.
“While there are many positives they can shield a broker away from the underwriter,” she said. ”A lot of the time, even when you do have direct contacts for the underwriter there is still a process where you need to revert to the online tool, refer and wait.”
Stephens said waiting periods are already drawn out because some insurers are struggling with resources. However, in certain situations, by creating a buffer between the broker and the underwriter, the technology can extend the waiting.
“Technology plays a large part in our roles so adapting is crucial to overcome frustration and once again comes back to communicating with the client,” she said. “Be upfront so they understand the process and timelines we need to undertake to get the desired outcome.”
Stephens said she services the portfolio for each of her rural clients.
“This typically includes their farm or business insurance, fleet, crop, livestock, and professional lines right down to their weekend caravan or boat,” she said.
Stephens sees it as her responsibility to keep up to speed on current market conditions so she can prepare her clients.
“Brokers need to have an open honest conversation with their clients to help guide them in the right direction to avoid problems from popping up later on,” she said. “There are many challenges, however, I like to view these as more of an opportunity to innovate the way we transact business.”
Are you an insurance broker? How are you dealing with the hard market? Please tell us below
