The changing role of the broker

The changing role of the broker | Insurance Business

The changing role of the broker
Brokers will continue to play “a very important role” in the future of the industry but their focus may have to shift over the coming years.

Scott Guse, Asia Pacific Insurance accounting leader at KPMG, told Insurance Business that while brokers will continue to play a key role in the industry, particularly in commercial lines, disruption in distribution may force a change.

“I can still see a very important role for the broking industry,” Guse said. “Where they need to focus their attention is to provide better service for their clients.

“By better service, I mean not only shopping around to get the best price for them, but actually advising them on how they can improve their risk management practices, their own internal practices to reduce insurance costs.”

Brokers should aim to advise their clients on all manner of risk issues. Guse highlighted advice on workplace health and safety to help bring down workers compensation premiums for clients across their book.

A key role for brokers in the future will be utilising their experience with one client to help their entire book across the risk management spectrum.

“Brokers are in the best place to learn from other clients that they serve and I think their role down the track will be important for their own customers to share and leverage knowledge that they are learning from other clients,” Guse continued.

With the major broker networks continuing their consolidation push with a total risk solution focus, Guse said that these trends will continue and make sense for brokers to share back office solutions and focus on clients.

In the Australian market, Guse said that disruption remains the biggest challenge facing the industry as a whole but noted that while things may change, the industry will have a place in the future.

“We are seeing around the edges at the moment and I don’t think there is ever going to be an Armageddon day event for insurance companies that wipes them out,” Guse continued.

“There will still be a need for risk transfer and that is what insurance companies do but there will certainly be changes in the way that they sell, how they deal with customers and their clients.

“I can see those changes ramping up in the near future.”

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