The recent swathe of year-end results announced by insurance companies throughout the sector has highlighted how business growth is a chief concern for insurance brokers throughout the UK and beyond. For Owen Thomas (pictured), chief sales officer at Premium Credit, his experience across the sector working for RSA and Aviva before joining Premium Credit in 2019, has given him a birds-eye view of the practical steps that brokers can take to increase sales and tackle the core challenges and opportunities that the broking sector is facing.
Looking at changes within the sector, Thomas noted that the profile of insurance brokerages is no longer the same. Consolidation of the personal lines market is one significant trend impacting brokers and their clients, he said, and increasing mergers and acquisitions can be seen, with smaller broker firms being swallowed up by larger entities as they review the scale and efficiencies of their businesses.
“Will broker customers have less choice as a result?” he asked. “Will they have access to appropriate cover when they need it; will the cost of cover increase with less competition?”
The situation within commercial lines is different, he said, and he believes that the greatest challenge here will be the contraction of insurance risk appetite. There has already been a hardening of the market, he said, and the availability of insurance cover is dwindling as prices are going up, making this a sellers’ market.
The above examples, as well as a host of other economic factors, all point to increasing insurance premiums in the year ahead, he said, and the effects will be significant.
“One example immediately springs to mind,” Thomas said, “how will SMEs overstretched by Brexit preparations, stockpiling and the like pay for vital insurance cover, never mind increased premiums?”
For brokers looking to achieve business growth and to reach the sales target they have been set for 2020 amid this uncertain external environment, Thomas has 10 top tips which have worked for him throughout his career. The first of these, he outlined, is the essential nature of planning. Create a formal plan illustrating how your client’s insurance needs will be met over the next 12 months, he said, as, without an agreed plan, there is no road map for the year ahead.
Secondly, he advised that brokers get to know their client’s budget cycle and become aware of when monies are available. He said: “This sounds obvious but can be overlooked. Like many things in life, ‘timing’ is everything and no more so than when it comes to selling insurance or risk management products.”
Thomas’s next tip was to provide payment options to the client. With increased insurance premiums commonplace at the point of renewal, particularly in some classes of business at the moment, he said, he recommends brokers have alternative payment solutions to offer their clients. Cover needs to be obtainable, he stated, even if the renewal quote seems initially out of reach. Premium financing is a strong option for brokers to present to their clients as it can be offered on all or even part of the insurance premium, he said. This option is a win for the client, he said, as it gives them access to insurance cover when they need it at a level and a payment choice that is viable for them and also provides the broker with additional commission and a valuable, alternative income source.
His fourth tip is for brokers to be clear with their clients about where revenue and profit will come from. Existing clients, he noted, are sometimes overlooked as a priority option for repeat and expanded business, but this should always be the first port of call for a broker. New clients are vital for business growth both in the current year and in subsequent years, he said, and also give an indication of the ongoing health and attractiveness of your business.
“We live in unprecedented times where no one month is like the next whether it’s due to political, economic or environmental factors,” Thomas said. “What risks are applicable to your client base, what cover do they need? It is highly likely they will be facing more risk now than this time last year.”
Knowing what success looks like was his fifth recommendation and Thomas highlighted that good communication is at the centre of every successful client account. Agree in advance what the client is looking for with regards to insurance cover, he said, and closely monitor the sales process to manage, report and agree on what success looks like. He outlined how flourishing relationships rely on free-flowing, honest, two-way communication.
Thomas’s sixth tip is that brokers should avoid thinking in a traditional way about the renewal cycle. He said: “We should be journeying with the client outlining ‘Moments of truth’ that affect them on an ongoing basis – what products are most relevant, and which give wider scope for increased sales.”
Another key recommendation is the importance of building capability, he said, and examining the skills needed to drive a successful sales plan. He highlighted the national capability team at Premium Credit, whose sole aim is to provide bespoke training (much of it CPD accredited) to their broker partners.
“The team has had a significant and positive impact on client experience, revenues and brokers’ commission,” he said. “Our support ensures that front line insurance broker staff are properly equipped to best serve the needs of their clients.”
Brokers engagement with their sales team is also an essential consideration, he said, and the best sales managers engage effectively with their teams and involve them in the client journey from planning through to execution and evaluation. His ninth suggestion is that brokers must think differently if they want to see results in 2020.
“Doing the same things with the same people is going to get the same results,” he said. “Standing still is not an option. We constantly need to innovate, evolve and develop our value proposition. We also need to reflect. What’s working, what’s not, have we got the right people in the right job within our teams, do we have ‘best in class’ products to sell, what is being achieved?”
Finally, but perhaps most essentially of all, Thomas said, is the importance of listening and asking questions. He always advises his sales teams to listen before they pitch for new business, he said, as it is too easy to assume that you know what clients want. Before presenting a proposition, he said, it is vital to know what the client’s insurance needs are and how they intend to pay for cover.