Is all-around risk advice the future of broking?

The future of broking may be broadened beyond the traditional transactional approach to insurance as all-around risk advice becomes more important

Is all-around risk advice the future of broking?

Insurance News

By Jordan Lynn

A recent Insurance Business poll found that 65% of brokers believe that the industry should look to become an all-around risk advice channel in the future as it is an important value add for clients.

The poll followed the Vero SME Index 2016 which noted that brokers are ideally placed to branch-out from a traditional, transactional relationship with clients as 38% of those surveyed said they are interested in receiving information about general business risks from their broker.

“This suggests that brokers have a role to play as trusted advisers to their clients - they are not just an insurance sales channel. This matters because trusted adviser relationships are more loyal, more profitable and ultimately more rewarding for all involved,” the Index notes.

Mark Searles, CEO and managing director of AUB Group, told Insurance Business that brokers can look at strengthening their value proposition around physical risk, people risk and financial risk as a way build for a successful future.

“We absolutely believe the most successful brokers going forward will be the risk consultants of the future for their clients and it is going to be around these three domains,” Searles said.

“From our perspective, how we see this going is that if you think about the concept of physical, people and financial risks, brokers have traditionally been really focused around the concept of physical risk, so building, motor and that sort of thing.

“What we are aiming to do is, working with our partners, provide the capabilities so that they can assess and provide solutions across those three areas of physical, people and financial risk so that there are enough capabilities either within the group, or strategic relationships outside of the group and partnerships that we have, to be able to support that trusted advisor status.

“Remembering that the vast majority of our clients are SMEs and mid-market, we basically want to forge the insurance broker of today as the true trusted advisor around protecting the business going forward in all elements of risk.”

Peter Blackmore, managing director of RiskAdvisor, an intelligent online matching of insurance and risk, told Insurance Business that a move towards an all-around risk advice model will see brokers engage with clients on a deeper level which benefits them in a number of ways.
“Brokers will become more of a go-to person for support rather than being seen as a necessary evil,” Blackmore said.

“Importantly, this approach will improve revenues and help set the broker apart from competition, particularly from direct insurers.

“This approach will ensure deeper and longer engagements by being seen as trusted advisors, not just insurance product sellers.”

Smaller, independent brokers may struggle with the reality of an all-risk offering as it will be a difficult to attain, Searles noted.

“I think this comes back to notion of consolidation in the marketplace as I think it will be difficult for smaller, independent brokers to do this,” Searles said.

“It is really the nature of, our value proposition that we hope we can make it attractive to other brokers, independent brokers joining the group that they will gain the benefit of all these services and the products and the whole strategy but it will be difficult to do it on their own.”

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