According to figures from the National Insurance Brokers Association (NIBA), there are about 15,000 brokers and authorised representatives (ARs) in Australia. The majority of these insurance professionals are generalists who work with a diverse range of business sectors to cater for their insurance and risk management demands.
In a recent interview with Insurance Business, Sam Weaver, general manager for Coalition, a cyber-focused specialist underwriting agency, made an interesting observation.
“I moved here last year from the US where brokers have really generally moved to a specialty model,” said Sydney-based Weaver. In Australia, he said, the majority of brokers are generalists and he’s noticed that it can be “a real challenge” for them.
IB asked Steadfast Group CEO Robert Kelly (pictured above) about this observation by Weaver. Kelly runs the largest brokerage network in Australia and his firm recently expanded into the US.
“We're definitely a market of generalist brokers and most of the brokers that I deal with in North America are generalists as well,” he said.
Kelly said, from London to Sydney, there are specialist brokers in a number of fields including employee benefits and professional indemnity (PI). However, he estimated that out of more than 400 brokerages in his network, about 15 would be regarded as specialist brokerages.
“But for the most part, the insurance brokers around the world that are true insurance brokers have got a wide client base and service different rigors of insurance advice and are generalists,” he said.
Kelly said he doesn’t see this as a drawback. He said one reason why his firm has so many generalist brokers is because of the support his operation can provide them with.
“We offer a lot of help around training, regulations and marketing skills - we're the secret sauce for them in many ways, which allows them to develop into the generalist area,” he said.
IB asked if the profession of the generalist broker today is more pressured and difficult compared to when Kelly started his career more than 50 years ago?
“When I started you had to be a generalist,” he said.
Kelly observed that one of the first specialist brokerages that emerged in Australia when he was starting his career was National Credit Insurance (Brokers). Steadfast now owns this firm.
He said this company started because its founders observed that no generalist brokers were involved in the trade credit space and they saw it as potentially an expanding source of clients.
Kelly said that, in Australia, the specialists tend to be the underwriting agencies. He said this also supports brokers remaining as generalists.
“If they [brokers] want to do a specific form of insurance, they could go and seek a specialist [agency],” he said. “They’ll help a generalist broker with all the nuances of a complex risk and help them tailor a policy to it.”
NIBA’s CEO Richard Klipin said differentiating too rigidly between generalist and specialist brokers is not the best way to understand the current insurance market.
He pointed to other ways of looking at the different skills of brokers across the profession that together form a “complex portrait.”
“There is also remarkable breadth and diversity in the clientele between brokers that work in metropolitan cities vs those working in the regions,” said Klipin. “The role of a broker – generalist or otherwise – is to be seen as a trusted partner who helps Australian families, businesses, and the community to thrive.”
Klipin said another approach to differences in the roles of more generalist versus specialist brokers is through the variety of customers they serve.
For generalist brokers that can include SMEs, multinational corporations, government agencies and families.
“On the other hand, a specialist broker’s clients are determined by the specialised sector, segment, industry, business type and client need that requires that kind of expertise,” he said.
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