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Gallagher discusses the challenges facing regional brokers

Gallagher discusses the challenges facing regional brokers | Insurance Business

Gallagher discusses the challenges facing regional brokers

As managing director of the North for Gallagher in the UK, Peter Matthews (pictured) is responsible for everywhere from Leicester to Birmingham, from Coventry to further north up to Inverness, and over to Northern Ireland. With Gallagher being the largest regional broker in the UK, with 70 offices dotted throughout both the cities and the regions and employing approximately 3,000 people, Matthews is especially well-placed to understand the central challenges facing regional brokers at this time.

The requirements of regional brokers vary greatly to those who operate within the major cities of the UK, he detailed. When you look to the challenges they face, he said, the greatest at the moment is that the insurance market is becoming more centralised.

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“One of the challenges across all regional brokers, not just for ourselves, is that the underwriting authority of some of the insurers who we’re dealing with have been pulled back into their head office, predominately in London,” he said. “So those relationships we have with local insurers can only go so far because quite often business then gets referred down to London, as far as being signed off is concerned.”

For Matthews, dealing with this challenge has been greatly aided by the presence of Gallagher’s large London market team which has built relationships with insurers at a head-office level from a negotiation standpoint. However, he said, for a small regional broker operating from a limited number of sites, the breadth of relationships with insurers simply does not exist, and how these brokers deal with this issue varies significantly.

Traditionally, Matthews said, there has been enormous emphasis placed by regional brokers on generating business by being part of a locale and networking with the local business community. He noted that, as the demographics of local communities’ change, and particularly as more millennials become decision-makers, the needs and wants of customers and client are also developing.

“As far as insurance purchase is concerned,” he said, “they very much want more convenience, they want information on demand that much more. So, the relationship will be less important going forward from a lead generation point of view, but much more important in terms of serving the particular wants of a customer.”

This is a changing dynamic, he said, which is going to continue, and, as every year goes by, Matthews has seen it become more essential to access the new market and not rely on the traditional methods of relationship-building and networking at a local level. To take advantage of the opportunities afforded by this change, and to combat the challenges it brings, Matthews said, Gallagher has become more technology-led to help it access potential clients.  

Just bombarding customers with cold calling doesn’t work these days, he said, and brokers need to add something of value where each client is concerned. Every client now wants something a little bit more bespoke than they did five years ago, Matthews said, and he noted that Gallagher is utilising social media to broadcast its value proposition and attract customers. Using social media is something all brokers will have to embrace going forward, he said.

Another area where regional brokers are being challenged is when it comes to product innovation, he said, and this is not only in terms of how to access new customers but also how to develop new products. For small regional brokers this is quite tough, he said, as they often do not have the resources, or the skillset, or the in-house expertise to develop new products and they are reliant on insurers developing them on their behalf. The advantages of being part of a bigger group such as Gallagher, he said, is ensuring there is a team that can help with product innovation and pushing new ideas out into the marketplace.

Other core challenges Matthews noted facing regional brokers include those of increasing regulation which is detracting from the amount of time that brokers can spend speaking with the customer as opposed to carrying out administrative back-office tasks, and the issues surrounding talent attraction and retention.

Attracting talent is an issue for everyone, he said, particularly in regional areas as a lot of young people tend to want to work in the southeast. An advantage of being a global broker, he said, is that you can give these people the best of both worlds – living at home or independently within a region while still being part of a corporate entity with the international opportunities that provides.

“We try to grow our own people from the ground up,” he said. “And we’re very keen to employ younger people who we can mould into the type of individual who would like to move forward.”

Attraction of talent is absolutely critical, Matthews said, and though this goes beyond just bringing younger people into the business, the ageing population highlights the imperative of ensuring a pipeline of new talent. Developing the skillsets and technical capabilities of staff is of paramount importance, he said, and Gallagher spends a significant amount of time and effort and energy in training its people to ensure that the challenge of talent attraction is addressed head-on.

“From a succession point of view, we’ve got a huge appetite to grow,” he said. “If we continue to grow at our current rate, we need to bring in literally hundreds of additional new people over the next few years just to maintain our current growth rate, let alone replacing the people who will retire in the future as well. So, this is definitely a challenge but it’s a challenge we are well aware of and we’re doing a lot to position ourselves for that future.”