What is a broker co-op?
Broker networks are usually the domain of big companies like Steadfast and AUB Group. However, Charles Gow-Gates, director of Barrack Broking is the founder of an alternative option for brokers. Gow-Gates’ Broker Co-op is a member owned business and a cluster group that provides brokers with support including placement solutions, technology services and networking. Gow-Gates arrived at his model with help from the Business Council of Co-operatives and Mutuals (BCCM). He also discusses technology challenges and suggests how to help ease the talent gap in the insurance industry.
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Danny: [00:00:13] Hello and welcome to Insurance Business Television. I'm Danny Wood, editor of Insurance Business Australia. And when it comes to forming a broker network, it's the big broker networks we think of. Steadfast group, but there are alternatives out there and I'm joined by a guest who can talk about the alternative. It's a broker co-op, and it's run by Charles Gow Gates. He's also director of Barrackk Broking and he's joining us from Brisbane. Hi, Charles.
Charles: [00:00:41] Hi, Danny. Good morning.
Danny: [00:00:43] Good morning. So tell us a bit more about your broker co-op. What does it involve exactly?
Charles: [00:00:49] Broker Co-op is a member owned cluster group. We provide the usual cluster services effectively. We're a buying group offering a range of services from placement, placement, solution services, technology services for online placements, support, and a networking opportunity for for brokers.
Danny: [00:01:10] And what prompted you to start this this broker co-op?
Charles: [00:01:14] I've got a background working with mutuals and member owned entities, so a co-op to me was just the perfect structure for a cluster group, which is effectively a buying group. And when when we formed Barrack Broking about almost three years ago now, we wanted to join a cluster group and we just didn't didn't see one in the market that really suited our values. And so we, we joined together with a few independent brokers and, and thought a co-operative would be the perfect structure.
Danny: [00:01:46] And how did you learn how to do this? Was there a model you were thinking of or did you just get this out of your own brain?
Charles: [00:01:53] I've been working with the Business Council of Cooperatives and Mutuals for some time. They are a great association that supports member owned entities, whether that's cooperatives or mutuals, and they have some terrific tools available to help anyone who is interested in setting up a cooperative.
Danny: [00:02:11] And what sorts of broker issues and problems do you see at helping brokers to solve?
Charles: [00:02:18] I see great value in cluster services and that's why we really wanted to join one that was aligned to our values. And it's been a great add value add for for Barrack broking, particularly being a new broker in a market where regulatory challenges are changing quite often. Market conditions are changing quite often. So one, just providing that support network for independent brokers to be able to share information, be able to access suppliers, whether that be for compliance services or technology for online placements or online or for placement services, for international placements or hard to place placements. There's really a great range of of value add and services. And initially before Broker Cult was formed as an independent broker, we were sourcing all of those suppliers ourselves. And so it's been a much more efficient, cost effective way for us to be able to access those services. And I'm really proud to say that broker, cult, the co-operative funds, all of those services fought for our members without any additional fees.
Danny: [00:03:26] And just stepping back and looking at the industry more widely, what do you see as some of the big challenges facing brokers at the moment?
Charles: [00:03:36] So I think there are a lot of challenges for I think there are a lot of challenges for brokers at the moment. We're in a risk is always dynamic and changing, but particularly at the moment with the conditions that we have with COVID, I think there are technology changes, regulatory changes, logistical changes. The risk for our clients is changing quite rapidly. And for us as brokers to be across that and aware of that, is it extra hard at the moment or always? Risk is dynamic, but especially at the moment. I think we need to be abreast of those changes which are happening rapidly. Also with the market, there are challenges with the market, obviously with insurers being more particular on which risks they take on capacity challenges in the market. Scrutinising submissions more closely. It is taking longer and it's harder to get risk transferred properly and that's a challenge. And I guess the third challenge is just operationally, we do have a shortage of qualified people in in the sector. And so compounded with the additional time that it's taking for, for placements for us to understand the risk and to get those properly placed. There are some some real operational challenges as well.
Danny: [00:05:02] I mean, there are big fundamental problems. Let's just have a quick look at that one you mentioned at the end there. Just a lack of talent in the industry. How do you see that changing or what needs to be done, do you think?
Charles: [00:05:14] We need to attract new talent to to the sector. I think there are people out there that that want that want a good career. And I definitely believe insurance can offer that for for young people. There's a lot of young, qualified people. And perhaps over the last two years, they haven't been taking on those the graduate type roles because there's been a freeze on on hiring. And and now now is the time to really make sure we're appealing to those qualified young people who are who are looking to choose a career. And and I feel we can do more there. I know there's a lot of other people in the insurance industry that have the same view. And and I feel we're getting there with a coordinated approach to really make make it known to those young people that insurance offers a great a great career, but very broken. We're doing our part and we've got graduates involved and trying to help train them up and bring new people into the industry. And I think it just falls on everybody to do the same.
Danny: [00:06:16] What about the whole digital issue, which when I talk to some brokers, they're often very not quite angry, but certainly frustrated at how insurance companies, some of them just aren't really showing much sign of successfully transferring legacy systems into newer technologies that will help everybody. Is that an experience you have and what do you see happening there?
Charles: [00:06:42] Technologies is a is a hurdle. I know it's always plagued insurance and not not just in Australia. I know Lloyd's spent a lot of money transferring to it to a new IT system that wasn't as successful as it planned to be. And I think it's one that we struggle with on the broking side. Yes, there are. In our role where we do a lot of repetition, there is great opportunity for technology to be able to help reduce some of that workload. So I'm waiting for all of all of the work that the tech industry is doing to flow through into systems. Now, I don't know too much on the insurance side, but when I hear stories about some of the some of the systems behind some of these large insurers, it does surprise me.
Danny: [00:07:36] Let's talk about you a bit before I let you get back to your more serious work. I mean, how did you get into the insurance industry in the first place?
Charles: [00:07:45] Well, I chose a career in insurance. I was also born into insurance. My dad's got a brokerage. And so from an early age in my school holidays, I was helping out with files and doing doing odd jobs so I, I could see early on the benefits of a career in insurance. But I certainly chose chose the profession. And it's been great, great for me. I've worked in Sydney, Perth, Brisbane, London in legal roles and broking roles. And yeah, I think we've got a really great industry with a lot of opportunity for, for young people to grab hold of and really have a terrific, terrific life.
Danny: [00:08:24] But what do you find so exciting about your work? What do you enjoy most?
Charles: [00:08:29] I think as a broker, we really get to see a lot of the world. We get to pop the hood on all sorts of businesses. See what? See what makes them work. See what. See how they see how they operate. Get to learn a lot. Definitely need a lot of general knowledge in what we do, whether that's geographic knowledge or business knowledge. It has everything. It's got the personal soft skills. But really it's I guess all of that. It's the diversity that it offers, which is most appealing.
Danny: [00:09:05] Charles Gow Gates, Director of Barrack Broking and the founder of a Broker co-op. Thanks very much for talking with insurance business TV.
Charles: [00:09:13] Thanks very much for having me.
Danny: [00:09:16] And thank you. Bye for now.